New Washington Tax Law
Recent Tax Legislation Could Impact Your Estate and Investments
On May 20th, 2025 Governor Bob Ferguson signed Senate Bill 5813 into law, ushering in major tax changes that may affect high-net-worth individuals – especially retirees managing significant investment portfolios or planning for legacy wealth transfers.
Capital Gains Tax: An Additional Surcharge on High Gains
Washington already imposes a 7% capital gains tax on annual profits over $270,000. Under the new law:
- An additional 2.9% tax will now apply to gains exceeding $1 million annually.
- While real estate sales and a few other categories remain exempt, this change could notably increase the tax burden for investors with large equity positions or business interests.
Estate Tax: A Bigger Break for Some, a Bigger Hit for Others
The law also overhauls the state estate tax, which could dramatically affect how affluent families structure their estates:
- The exemption amount increases from $2.19 million to $3 million.
- At the same time, the top tax rate jumps from 20% to 35% – a significant increase for larger estates.
In short: Smaller estates may benefit from the higher exemption, but larger estates could face steep new liabilities, potentially reducing what you’re able to pass on to heirs.
What This Means for You
If your estate is likely to exceed the new exemption threshold – or if you routinely realize large capital gains – now is the time to revisit your financial and estate planning strategies.
Our team can help you evaluate your options or connect you with trusted estate and tax advisors.
Contact us today to schedule a consultation and ensure your plan remains aligned with your long-term legacy goals.