Jensen Estate Law
April 2025 Newsletter
Hi clients and friends,
April got away from us, but we’re back with timely updates and helpful insights. We’re sending this newsletter a bit later than usual—hello, May—but it’s packed with important information we didn’t want you to miss.
This month, Derek W. Jensen, JD, LLM breaks down a significant tax proposal currently awaiting the Governor’s signature. If passed, the changes would increase Washington’s estate tax exemption, restore inflation adjustments, and raise the top estate tax rate for larger estates. It also introduces a new capital gains surtax for high earners. While the increased exemption may come as a relief to many Washingtonians, others will need to consider how these higher rates could affect their long-term planning. Derek’s summary offers a clear overview of what’s included and what to expect.
We’re also sharing three articles that explain how core estate planning tools—pour-over wills and revocable living trusts—work together to keep your wishes on track. If you’ve ever wondered why both are often used or what role they play in avoiding probate, these quick reads can help bring clarity.
Whether you’re thinking about how policy changes might affect your plan or just want to better understand the structure you already have, we hope this month’s update is a helpful resource.
Tax Update: Significant Washington State Tax Changes Ahead
Engrossed Substitute Senate Bill 5813 (ESSB 5813), now awaiting Governor Bob Ferguson’s decision by May 17, 2025, introduces significant tax reforms aimed at raising $321.6 million for education funding. The key provisions include:
- Estate Tax (Effective July 1, 2025): Increases the estate tax exclusion to $3,000,000 (up from $2,193,000) and restores inflation indexing, benefiting many Washingtonians. However, it also significantly raises the top estate tax rate from 20% to 35% for estates exceeding $9,000,000. A $3,000,000 deduction for family-owned businesses will offer additional relief.
- Capital Gains Tax (Effective 2025): Adds an additional 2.9% tax on capital gains over $1,000,000, bringing the total tax to 9.9%. The existing 7% rate continues for gains above $270,000.
Although many will appreciate the higher estate tax exemption and restoration of inflation adjustments, we understand concerned raised by the top estate tax rate. Stay tuned, as our firm will soon announce creative planning strategies to assist those affected by these higher rates.
Living Trusts Explained:
Your Key to Simplifying Estate Management in Washington State
Revocable living trusts are one of the most flexible and effective tools for managing your estate. This article breaks down how they work, how they help avoid probate, and why many Washington families use them to maintain privacy and reduce delays after death.
How Revocable Trusts and Pour-Over Wills Work Together:
A Practical Estate Planning Approach in Washington State
This article outlines how these two tools complement one another: the revocable trust holds and manages your assets during life and after death, while the pour-over will acts as a safety net for anything not formally transferred. Together, they create a seamless structure that protects your wishes and simplifies administration for your loved ones.
Pour-Over Wills:
Your Estate Plan’s Essential Safety Net in Washington State
A pour-over will works hand-in-hand with your trust to ensure that anything accidentally left out of your trust is still directed where it needs to go. This article explains how pour-over wills function as a backup, helping to capture stray assets and support a more complete, probate-aware estate plan.