The Oregon House and Senate have passed House Bill 2541 with Senate amendments. The Bill is on its way to the Governor, who is expected to sign it into law. The Bill modifies the existing Oregon Inheritance Tax laws, rates, and exemptions and sets forth a new tax table:
To calculate what your tax would be, determine at which level your estate would be taxed at (i.e. between $1M and $1.5M). Include all property in your determination, including life insurance. (Note: A commonly held belief is that life insurance is "not taxed." This is only true in that it is not taxed as income to the beneficiary. It is included as an estate asset and taxed as part of your estate.) Your tax is the sum of the amount in Column 3 of your row (so for the second row, $50K) PLUS the product of the difference bwtween Colums 1 and 2 times the percentage from Column 4.
To illustrate how it works, let me give you a few examples. DISCLAIMER: Keep in mind that these are very simplistic examples, and cannot substitute for an in-person meeting with an estate planning and/or tax attorney. This post is for educational purposes only and does not constitute legal advice.
1. Taxpayer dies with $800K in property. No Oregon Inheritance Tax, because Taxpayer's property is under the $1M exemption.
2. Taxpayer dies with $1.49M in real estate, bank accounts, investments, retirement accounts, and life insurance. Tax is $49,900. $1M is exempted, and there is a 10% tax on the amount between $1M and $1.5M.
3. Taxpayer dies with $1.5M in real estate, bank accounts, investments, retirement accounts, and life insurance. Tax is $50,000, according to the table.
4. Tax payer dies with $4.4M real estate, bank accounts, investments, retirement accounts, and life insurance. Tax is $356,500. The first $3.5M gets taxed $257.5K and the amount between $3.5M and $4.5M is taxed at a rate of 11%.
If your estate value is over $1M, including life insurance, you will want to meet with your estate planning attorney as soon as possible to review the options that may be available to help you to minimize or eliminate taxes for your estate. Our office has been able to help our clients to reduce and eliminate taxes for their estates, at a cost that is often less than 1% of what their tax would be!
EXISTING AISTON LAW CLIENTS: You may call us at any time to get your questions answered. We do not charge hourly fees for our consultations with you.
NON-CLIENTS: We can take a very limited number of new appointments to review your situation this summer. Please call us as soon as possible if you wish to make an appointment. Although we do not charge for initial consultations, we value our initial consultation at $750.00 for the thorough explanations that we go through during the two-hour appointment.
To your family's health & prosperity,
P.S. Want to get started on the most important planning you'll ever do for your family? Give our office a call at (503) 235-5150 to get started. You'll be glad you did.
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