Although the federal estate tax only applies to estates worth at least $11.4 million in 2019, Oregon imposes a state estate tax for estates worth more than $1 million. If you expect your estate to exceed that threshold, estate planning strategies can minimize the impact of these taxes on your descendants.
Learn more about the Oregon estate tax laws, so you can act accordingly regarding your assets.
Items in the taxable estate
Any property with tangible value that you own at the time of your death is part of your estate. This includes, but is not limited to, property you placed in a living trust, shares in businesses, life insurance policy proceeds, vehicles, investment accounts, retirement accounts, bank accounts, real estate, artwork and furniture.
Calculating the estate tax
First, estimate the value of your taxable estate, then subtract the $1 million exemption. Compare the remaining number to the 2019 Oregon tax chart, which shows the graduated tax rate:
- $1 million to 1.5 million: $50,000 base tax plus 10.25%
- $1.5 million to 2.5 million: $152,500 base tax plus 10.5%
- $2.5 million to 3.5 million: $257,500 base tax plus 11%
- $3.5 million to 4.5 million: $367,500 base tax plus 11.5%
- $4.5 million to 5.5 million: $482,500 base tax plus 12%
Each subsequent $1 million increase results in additional base tax plus an additional percentage point, with taxes capped at a base of $1.0225 and 16% for estates totaling more than $8.5 million.
Certain exceptions can help you decrease the taxable portion of your estate. For example, if you leave all your assets to your spouse or registered domestic partner, he or she will not have to pay estate tax. However, when he or she dies, the next set of heirs will be subject to this tax. You can also make estimated tax payments on your estate in anticipation of limiting the tax burden for your beneficiaries.