Public Law No. 119-21 (H.R.1, 119th Cong.) § 70106 will increase the federal estate and gift tax lifetime exemption amount to $15,000,000 in 2026. While this lofty exemption may seem aspirational at best for typical families, the change is a good reminder to consider how estate taxes generally may impact your family. While the federal exemption level is out of reach for many, here in Oregon the threshold for the state-level estate tax is comparatively low at $1,000,000 (a recent effort to raise the Oregon exemption did not make it to vote before the Oregon State Legislature adjourned for 2025). The $1,000,000 threshold is much more likely to be “in play” for a typical Oregon family with a home, once all assets including real estate are considered—estates of values over $1,000,000 may be subject to Oregon estate tax of 10–16% upon death and the estate’s passing to heirs.
Moreover, while at the federal level the lifetime exemption is “portable” so that with the proper elections a surviving spouse can utilize unused portions of the decedent spouse’s exemption (thus more or less doubling the exemption for a married couple to $30,000,000 in 2026), in Oregon the exemption from the Oregon estate tax is not—so without any planning the second spouse to pass away of a married couple still only gets a $1,000,000 exemption, not $2,000,000.
However, including tax-planning in a comprehensive estate plan can potentially result in significant state-level savings for your beneficiaries. When structured to include provisions that may aid in minimizing estate tax liability, your estate plan can potentially “double” the value of assets to pass free of Oregon estate tax for a married couple to $2,000,000. Specific circumstances vary, however, so you should always consult with a lawyer to determine the options that best suit your goals. If you’d like to discuss how estate taxes may affect you and your beneficiaries and how a comprehensive estate plan may help to minimize the impact, please contact us.