Special Edition: Estate Tax Updates You Should Know About

Estate taxes may not be top of mind—but they can have a major impact on what your loved ones actually receive when you're gone. With both federal and state-level laws in flux, 2025 is a critical year to understand how these rules may affect your estate and your planning strategy.

🏛️ Federal Estate Tax: Major Changes Ahead in 2026

The current federal estate tax exemption is $13.99 million per individual in 2025. However, this is temporary. On January 1, 2026, the exemption is set to drop to $5 million, adjusted for inflation—estimated to be around $7 million.

That’s a significant reduction, especially for individuals and families who own a business, hold appreciated real estate, or have built generational wealth through investments or retirement accounts.

What this means for you:
There’s no one-size-fits-all solution. While some families may benefit from advanced estate tax strategies, others may not need them at all. The key is determining the right strategy based on your full financial picture, your goals, and your family dynamics.

🌲 State Estate Taxes: A Focus on Oregon and Washington

Even if your estate is well below the federal threshold, state-level estate taxes may still apply—and the exemptions are far lower.

📍 Washington State

• Current exemption (through June 30, 2025): $2.193 million
• New exemption (effective July 1, 2025): $3 million
• Top estate tax rate: 20%, but marginal rates will increase along with the exemption

Washington has one of the lowest exemption thresholds and highest top rates in the country. The upcoming increase in the exemption may benefit some families, but it comes with steeper marginal brackets, meaning larger estates may ultimately face higher tax burdens.

Key considerations:

• No portability: married couples must plan carefully to preserve both spouses’ exemptions
• Beneficiaries may face delays or reduced inheritances without proper structuring

📍 Oregon

• Estate tax exemption: $1 million
• Top estate tax rate: 16%
• No portability between spouses

Many Oregonians are surprised to learn how quickly their estate value can exceed this threshold—especially when you consider real estate, retirement accounts, and life insurance payouts.

Key considerations:

• Oregon counts all assets—real and intangible—toward the $1M threshold
• If you live in Oregon and own property in another state (or vice versa), your estate may be subject to tax in more than one jurisdiction

🗺️ Other States with Estate or Inheritance Taxes (2025)

📌 States with Estate Tax:

📌 States with Inheritance Tax:

✅ Conclusion: Planning Is Personal — And Timely

These are just a few of the many legal and financial considerations that go into creating a comprehensive estate plan. Every family’s situation is different. The right plan for you depends on your goals, your assets, your values, and your loved ones' needs.

That’s exactly what we explore in a Life & Legacy Planning Session—a thoughtful, customized conversation to help you understand your risks, your options, and how to secure what matters most.

📅 Ready to schedule your Life & Legacy Planning Session? Contact us to reserve your time.

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This article is a service of Dolev Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session,Ⓡ during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.