How Would You Like to Have Your Estate Pay 35% Estate Tax to Washington State?
The highest estate tax rate by far is now in Washington state, however, qualified farmers may get a big break
This will be a two-part series on how Washington State (my home state and I still own real estate) is rapidly becoming the worst state in the country to be a farmer. Today, we will review the estate tax situation in the state and later we will review a proposed income tax on higher farm earners.
For Washington farm and business owners, the estate tax landscape has undergone its most significant transformation in a generation. As of July 2025, new legislative adjustments have increased the state’s exclusion threshold while simultaneously introducing a steeper tax bracket for larger estates. Understanding these changes is critical for preserving business continuity and ensuring a seamless generational transition.
The 2026 Thresholds and Rates
Effective January 1, 2026, the Washington estate tax filing threshold and individual exclusion amount has risen to $3,076,000. This figure is now subject to an annual inflation adjustment, providing a degree of relief for moderate estates that were previously caught by the long-stagnant $2.193 million limit (primarily due to the Legislature not fixing a glitch in the inflation adjustment that they continued to ignore for several years).
However, this increase in the exclusion is paired with a significant rise in the top marginal tax rate. For taxable estates exceeding $9 million, the rate has increased from 20% to 35%. Because Washington does not recognize “portability”—the ability of a surviving spouse to utilize the unused exemption of the deceased—careful trust structuring remains essential for married couples to maximize the $6.152 million combined protection.
