Current Exemption: $1 Million
Oregon is one of only a handful of states that have an estate tax (sometimes referred to as an inheritance tax). It is also the lowest in the nation. The current exemption amount sits at $1 million, per person. There are efforts to raise the exemption amount in the 2026 legislative session that passed the Senate, but died in the House of Representatives. Almost every legislative session in recent history has had some murmurs of changing the exemption amount, or tax brackets but to no avail.
This exemption was set in the early 2000s and has not changed in decades, meanwhile the value of real estate in the Portland Metro area skyrocketed. Meaning, what was once a reasonable exemption that only taxed large estates now ensnares most estates.
The median home price in Portland, Oregon is $534,638.
Owning a home, having a retirement account, and one life insurance policy often means that someone is a millionaire and subject to estate tax without realizing it.
Tax Planning for Married Couples
You've spent your entire life building your nest egg, and suddenly it's taxable. Many married couples wish to provide for their spouse and it's only after their spouse passes that they'd want to provide for other family members. A common estate planning mistake is to name one spouse as the primary beneficiary on every account, or as a co-owner on every account and property. This successfully avoids probate, but it unnecessarily increases your estate taxes. Each partner has $1 million that they can pass tax free. A married couple can also pass unlimited amounts to each other without incurring any tax. This often results in the entire estate being passed to one spouse upon the first death, and fails to utilize the $1 million exemption at the first death. Instead of passing $1 million tax free and then passing the rest tax free to their spouse the couple has now failed to use their tax exemption.
At the death of the second of you then only have $1 million to pass to family members or beneficiaries.
i.e. Alex and Marty are married and their estate is $3 million ($1.5m each). At Alex's death they leave everything to Marty. That passes 100% tax free to Marty. Now Marty's estate increases from $1.5 million individually to $3 million.
At Marty's death their estate will pay ~$205,000 with no planning.
Compared to, if Alex and Marty put together a revocable living trust with estate tax planning their estate could look like this: Alex passes away, and at his death $1 million is put into a separate irrevocable trust for the benefit of Marty. Marty still has access to funds but the $1 million does not become part of Marty's estate. The other $500k is given to Marty outright, also tax free because Alex and Marty are married. At the first death no tax is due. Now Marty's estate is $2 million, and Marty has access to a $1 million irrevocable trust. At Marty's death the $1 million irrevocable trust will pass estate tax free, and Marty's own $1 million will pass tax free. Marty's estate will pay estate taxes on only $1 million, instead of $2 million.
At Marty's death their etsate will pay $101,250 with tax planning.