Washington’s estate tax landscape is shifting. Under ESB 6347, several key changes have been enacted that will impact estate planning for deaths occurring in 2026 and beyond. This legislation effectively rolls back previous high-rate increases, restoring a more familiar tax structure while adjusting the “exclusion amount” (the value of an estate that is exempt from tax).

1. Reversion to 10%–20% Tax Rates

For several years, Washington’s estate tax rates have been a point of contention. Starting July 1, 2026, the state will restore the previous rate schedule. This moves the top tax rate back down to 20% (for taxable estates over $9 million), providing significant relief compared to the higher rates briefly seen in 2025.

• Citation: ESB 6347, p. 5, lines 3–17.

2. Shifting Exclusion Amounts

The amount you can pass to heirs tax-free depends on the specific date of death in 2026:

• January 1 – June 30, 2026: The exclusion amount is $3.076 million.
• July 1, 2026 and later: The exclusion amount resets to $3.0 million.
• Citation: ESB 6347, p. 2, lines 5–8.

3. Future Inflation Adjustments

To ensure the tax keeps pace with the economy, the $3.0 million exclusion amount is not static. Beginning in 2027, this threshold will be subject to annual inflation adjustments based on the Consumer Price Index (CPI).

• Citation: ESB 6347, p. 2, lines 9–18.

The Bottom Line: ESB 6347 represents a “reset” for Washington. While the exemption threshold drops slightly mid-year in 2026, the overall tax burden for larger estates is reduced by the restoration of the 20% cap.