If you feel like the rules keep shifting under you, you’re not imagining it. Between 2025 and 2026, both the federal government and Washington State made significant changes to estate tax law, and in Washington’s case, the state raised rates and then partially reversed course a few months later. If your estate plan hasn’t been reviewed recently, it may be built around assumptions that are no longer accurate.
Here’s where things stand right now.
Federal Estate Tax in 2026
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- Exemption: $15 million per individual, $30 million per married couple
- Rate: Pp to 40% on the value above the exemption
- Status: Permanent, indexed for inflation starting in 2027
This is a significant, and permanent, change. A scheduled reduction that would have cut the exemption roughly in half was eliminated by the One Big Beautiful Bill Act, signed into law in July 2025. Unlike the temporary increase it replaced, there’s no scheduled expiration this time.
Washington State Estate Tax in 2026
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- Exemption: $3 million per individual, with future inflation adjustments
- Rate: up to 20% on the value above the exemption
- Not portable: Unlike the federal exemption, Washington’s exemption cannot be transferred between spouses, making estate planning important for WA residents.
Washington’s rates briefly increased to as high as 35%, but legislation passed in 2026 restored the prior 10%–20% rate schedule but kept the higher $3 million exemption in place.
Will taxes erode the legacy you intend for your loved ones?
Why This Is Worth Revisiting
Estate plans are usually built around the tax rules in place at the time—exemption amounts, tax rates, portability rules, and more. When those rules change, a plan that was well-designed a year or two ago may no longer reflect current law. That doesn’t necessarily mean it’s wrong, but it’s worth confirming rather than assuming.
A quick review now could save a lot of surprise later. Let’s take a look!
Further Reading
Josh Whelan
CFP®, CLU®, ChFC®
Partner, Financial Advisor
About the Author
Josh sees his profession as a calling, not just a career. His motive for pursing financial planning was very personal. While working on a degree in marriage and family counseling, Josh’s father was diagnosed with multiple sclerosis. Josh decided then and there to change career paths to help his family prepare for an uncertain financial future. Financial planning became his path to serving others.
The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.
