Non-Oregon Residents With Oregon Real Estate Beware

By Patricia Nelson of Two Spruce Law

If you own real property in Oregon and don’t live in Oregon, and wish to avoid a probate in Oregon.. you need to know about Oregon’s Estate Tax!

You may want to know about Oregon’s Estate Tax and how to avoid it. Under Oregon law, if an out-of-state resident owns real property in Oregon AND their gross estate everywhere (everything, including the death benefit value of life insurance, fair market value of real property, retirement accounts, investment accounts – everything) is in excess of $1,000,000, a portion of their estate is subject to Oregon’s Estate Tax. If this $1,000,000 minimum doesn’t apply to you, simply transferring your OR real property into a trust may be the correct move!

Of course, if you no longer own the Oregon real property when you die, there is no Oregon Estate Tax owed.  So, selling the Oregon real property is an option.  Alternatively, if you plan to retain the Oregon real property long-term, you can “convert” it from real property to intangible personal property by placing it in an LLC.  Of course, there are business and tax reasons why you may want to or not want to do that, other than just the Oregon Estate Tax issue.  

Please confer with your accountant and let us know if you believe that you want to form an LLC.  It can be an out-of-state LLC, in which case we could prepare a deed into your LLC – but you would need an attorney from your state to prepare the LLC.  

Also confer with your accountant. Your accountant may determine that the cost of an LLC exceeds the cost of the possible Oregon Estate Tax… Have questions, give us a call to find out more!