Washington Estate Tax Changes 2026: What ESB 6347 Means

What changed in Washington's estate tax law on July 1, 2026?

Washington changed its estate tax rules twice within twelve months. A 2025 law (SB 5813) pushed rates as high as 35% and raised the exemption to $3,076,000. ESB 6347, effective for deaths on or after July 1, 2026, rolls the top rate back down to 20%, resets the exemption to $3 million, and effectively freezes future increases by tying the inflation adjustment to a discontinued price index.

Key takeaways

• Washington's estate tax rates drop from a 35% top bracket back to a 10%–20% graduated schedule for deaths on or after July 1, 2026.
• The exemption resets to $3 million and is effectively frozen — its inflation index references a CPI series that no longer exists.
• Deaths in the first half of 2026 (before July 1) are still governed by the higher-rate 2025 rules.
• Washington's state estate tax is entirely separate from — and has a far lower exemption than — the $15 million federal estate tax exemption.
• ESB 6347 amends RCW 83.100.040, the core statute governing Washington's estate tax rate schedule.

What is ESB 6347 and why did Washington change the rules twice?

In 2025, Washington passed SB 5813, which raised estate tax rates to as much as 35% — then the highest state-level estate tax rate in the country — while also raising the exemption to $3,076,000 and indexing it to inflation. The higher rates drew pushback from estate planners and business owners who argued the increase was steep enough to push wealth and small-business succession planning out of the state.

Governor Bob Ferguson signed ESB 6347 on March 24, 2026, reversing course. The bill restores the pre-2025 graduated rate structure topping out at 20%, while keeping the exemption at $3 million rather than reverting to the 2025 starting point. The new schedule and exemption apply to decedents dying on or after July 1, 2026; the underlying provision is codified as an amendment to RCW 83.100.040.

What is Washington's estate tax exemption in 2026?

The exemption depends entirely on the date of death, because Washington ran two different rule sets in the same calendar year:

• January 1 – June 30, 2026: $3,076,000 exemption, rates up to 35%, under 2025's SB 5813.
• July 1, 2026 and after: $3,000,000 exemption, rates up to 20%, under ESB 6347.

That's an unusual — and confusing — situation: the exemption for the second half of the year is actually slightly lower in dollar terms than the first half, even though the top rate dropped substantially. Families settling an estate need to check which half of the year the death occurred in before assuming which rules apply.

What are Washington's 2026 estate tax rates after July 1?

Taxable estate above the exemption	Rate (July 1, 2026 onward)	Rate (Jan 1 – June 30, 2026)
$0 – $1,000,000	10%	10%
$1,000,000 – $2,000,000	14%	15%
$2,000,000 – $3,000,000	15%	17%
$3,000,000 – $4,000,000	16%	19%
$4,000,000 – $6,000,000	18%	23%
$6,000,000 – $7,000,000	19%	26%
$7,000,000 – $9,000,000	19.5%	30%
$9,000,000 and above	20%	35%

The comparison column for the first half of 2026 reflects the 2025 schedule enacted by SB 5813, which ESB 6347 rolls back for deaths from July 1, 2026 forward.

Why do people call the new exemption "frozen"?

ESB 6347 keeps the appearance of an inflation-adjusted exemption, but the fine print matters here. The statute ties the annual adjustment to the Seattle-Tacoma-Bremerton Consumer Price Index — a regional CPI series the Bureau of Labor Statistics stopped publishing years ago. With no current index value to apply, the exemption has no functioning mechanism to rise with inflation the way the 2025 version did. In practice, the $3 million figure stays put until the legislature revisits it again, rather than climbing a little each year the way the federal exemption now does.

That matters for anyone doing multi-year planning: an estate comfortably under $3 million today could grow past that threshold from ordinary asset appreciation — home equity, retirement accounts, a small business — without any change in the law itself.

A worked example

Consider a Seattle homeowner who dies in August 2026 with a $3.8 million estate — a paid-off home, a retirement account, and some investment holdings. Under the post-July 1 rules, the first $3 million is exempt. The remaining $800,000 falls into the $3,000,000–$4,000,000 bracket, taxed at 16%, producing roughly $128,000 in Washington estate tax (the state's schedule also includes a graduated base amount per bracket in the full tax tables, so an estate's exact liability should be calculated using the Department of Revenue's official worksheet, not this simplified estimate).

Had the same person died in June 2026 — six weeks earlier — the same $3.8 million estate would have used the $3,076,000 exemption and the 2025 rate schedule instead, producing a different result. The date of death, not the date the estate plan was written, controls which rules apply.

How does this interact with the federal estate tax?

Washington's estate tax is entirely separate from the federal estate tax, and the two exemptions don't line up. The One Big Beautiful Bill Act permanently set the federal exemption at $15 million per person starting in 2026. An estate well under that federal threshold can still owe Washington state estate tax, because the state exemption sits at just $3 million — a fifth of the federal figure. Washington residents (and non-residents who own Washington real estate) need to plan around both numbers, not just the federal one most national estate-planning coverage focuses on.

Who is most affected by this change?

Washington homeowners and small-business owners in the $3–9 million estate range see the biggest practical shift, since that's where the rate reductions are steepest in percentage terms. Someone with a $9 million-plus estate still faces a 20% top rate rather than 35% — a meaningful reduction on paper — but still needs planning to manage a state tax bill in the hundreds of thousands of dollars or more. Estates comfortably under $3 million aren't affected by the rate change at all, though the frozen exemption means today's under-the-threshold estate could cross it in future years purely through asset growth, with no legislative action required.

Does a will help reduce Washington estate tax?

Not by itself. A will controls who inherits, who serves as your executor or personal representative, and who raises minor children — but reducing exposure to Washington's estate tax generally requires separate planning tools: an irrevocable trust, lifetime gifting under the annual gift tax exclusion, or marital deduction planning for a surviving spouse. What a will does do is make sure that whatever your estate is worth after tax, it goes where you intend rather than through Washington's intestacy rules, which don't account for tax planning at all. If you haven't reviewed your will since the 2025 or 2026 rate changes, now is a reasonable time to check it still reflects your wishes. Washington's execution requirements are summarized on our Washington wills page, and Pactlio Wills builds a Washington-specific will you can start online in a single sitting.

Common mistakes people make with this change

• Assuming one exemption applies to the whole year. Washington ran two different rule sets in 2026 — the date of death, not the date of planning, determines which one applies.
• Confusing the state exemption with the federal exemption. A $15 million federal exemption doesn't mean nothing is owed; Washington's $3 million threshold is a fifth of that.
• Treating the "frozen" exemption as permanent. The legislature can amend RCW 83.100.040 again; a frozen index isn't a guarantee the number stays $3 million indefinitely.
• Skipping a will because "the estate tax math is handled." Rate schedules and exemptions don't choose your executor or your children's guardian — only a will or your state's default intestacy rules do that, and dying without a will hands that decision to the state.
• Assuming a living trust avoids Washington estate tax. A revocable living trust avoids probate, not estate tax — trust assets you still control at death are generally included in your taxable estate either way. See will vs. living trust for how the two actually differ.

Sources

• Washington State Legislature, ESB 6347 bill summary and history: https://app.leg.wa.gov/billsummary/?billNumber=6347&year=2026&initiative=False
• Washington State Legislature, ESB 6347 Final Bill Report: https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bill%20Reports/Senate/6347.E%20SBR%20FBR%2026.pdf
• Washington Department of Revenue, Estate tax tables: https://dor.wa.gov/taxes-rates/other-taxes/estate-tax-tables
• Washington Department of Revenue, 2026 Tax Legislation summary: https://dor.wa.gov/forms-publications/publications-subject/tax-topics/2026-tax-legislation
• Revised Code of Washington § 83.100.040, Rate of tax: https://app.leg.wa.gov/rcw/default.aspx?cite=83.100.040
• Cornell Law School, Legal Information Institute — Estate tax: https://www.law.cornell.edu/wex/estate_tax

This article is for informational purposes. Pactlio generates professional drafts for review — not legal advice.