Washington’s estate and capital gains tax rules are changing — and for many families, that means their current plan may no longer be enough.
In just a few minutes, our video guide walks you through what’s changed, who’s affected, and how business owners, retirees, and legacy-focused families can reduce estate and capital gains tax exposure with proactive planning.
Not ready to watch just yet? See Understanding Washington’s 2025 Estate and Capital Gains Tax Increases for a detailed discussion of the tax law changes, and here are a few key takeaways:
1. Estate Taxes Are Changing — and Larger Estates May Pay More
- The exemption rises from $2.193M to $3M starting July 2025
- The top rate jumps from 20% to 35%, meaning estates over approximately $9M may owe more than before
- Many families cross this threshold faster than they think, especially when you count retirement accounts, real estate, and life insurance
2. Washington’s Capital Gains Tax Adds a New Layer
- First $278,000: tax-free
- Next $1M: taxed at 7%
- Above $1M: taxed at 9.9%
Key exclusions: real estate, retirement accounts, timber, and some business sales
You may also qualify for:
- $111K charitable deduction
- Exemption for qualified family-owned business sales
3. Business Owners: Timing, Structure, and Planning Are Critical
If you’re preparing to sell your business, strategies like:
- Installment sales
- Charitable Remainder Trusts (CRUTs)
- IDITs for estate planning
- Qualified Family Owned Business status
…can make a dramatic difference in what you keep and what goes to taxes.
4. Retirees and Legacy-Focused Families: You May Be Closer to the Threshold Than You Think
A sample estate with:
- $1.5M in IRAs
- $1.2M in home equity
- $800K in life insurance
= $3.5M total — over the exemption.
This is why we recommend revisiting:
- Your wills and trusts (to maximize both spouse exemptions)
- Lifetime gifting strategies
- Strategies like Irrevocable Life Insurance Trusts (ILITs) to shift value and protect your estate
5. The Right Plan = Less Tax, More Control
If you’re feeling unsure or frustrated by rising complexity—you’re not alone.
This is why we built the video: to simplify what’s changed and show clear planning options to reduce exposure and increase clarity.
Not Sure Where You Stand?
Even the best plans need updates when the rules change. We offer a no-cost, pressure-free conversation to assess how these laws may affect your wealth, family, or business transition.
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.
