How to Minimize Your Oregon Estate Tax

The State of Oregon assesses an Estate Tax on the assets of a resident of Oregon when they die to the extent the person’s assets are worth more than $1,000,000.  By “assets,” we mean anything the person owned, which even includes the death benefit value of life insurance on his or her life.

So, the first $1,000,000 passed to heirs or beneficiaries is Oregon Estate Tax-free.  The next $500,000 worth of assets is taxed at 10%. The percentage of tax increases as the value of the assets increase.  The top marginal Oregon Estate Tax rate is 16%.

For example, an Oregon resident dies owning $1,850,000 in all assets, the first $1,000,000 is Estate Tax free. The remaining $850,000 is subject to the Oregon Estate Tax. The first $500,000 of that $850,000 is taxed at 10%, so the resulting tax would be $50,000. The next $350,000 of the $850,000 is taxed at 10.25%, resulting in a tax liability of an additional $35,875. The total Oregon Estate Tax liability would be $85,875. Of course, this example is overly simplified, but it serves the purpose of demonstrating how the Oregon Estate Tax is calculated.

Note that the tax is assessed per person, so a married couple – planning ahead and collaborating with each other – can pass up to $2,000,000 free of the Oregon Estate Tax.  Give us a call so we can help you figure out how to minimize your Oregon Estate Tax liability.