Estate planning requires a person to think about a variety of circumstances that might occur when they pass away. One of these is the ever-changing legal landscape surrounding estate planning and estate taxes.
For families in Washington, SB 6347 is one of the changes that’s occurring in 2026. The state’s top estate tax rate will drop to 20% on July 1, 2026. This means that individuals who die on or after that date will pay the 20% rate instead of having to pay the 35% that’s required prior to that date.
SB 6347 raises challenges
The change in the law brings up some challenges for people who have taxable estates, such as those with real estate, farms, investment portfolios and other significant assets. While many people will focus heavily on the reduction in the tax rate, another concern is the exemption amount.
In 2025, changes increased in the amount of the estate that can be excluded. The rollback that’s coming in July raises questions about future inflation adjustments, which has some families closely watching the current threshold of $3 million. That exemption amount is frozen, so there’s no guarantee that it will increase in the near future.
Estate plan review is critical
Now is the time to check estate plans to determine how to proceed. Because Washington’s tax is separate from the federal estate tax, it’s possible to owe state estate taxes even if there isn’t a federal estate tax due. This can be a shocking situation for people who believed that no estate tax would be due as long as there wasn’t a federal estate tax liability.
Working closely with someone who can review the comprehensive estate plan and determine how to adjust for these changes may be beneficial for anyone in this position. Even though the date of the change is coming up fast, it’s best not to wait until then to check the estate plan to ensure that it still accurately reflects the creator’s wishes while taking the new law into account.