In Oregon, estates valued at over $1 million are subject to state estate taxes, so it's wise to plan ahead to reduce your taxable estate. Here are key strategies to bring your estate below the threshold.
1. Gifting During Your Lifetime
The Annual Gift Exclusion allows you to give up to $19,000 per person per year (2025 limit) without triggering federal gift taxes. This reduces your taxable estate over time. In addition, you get to see your loved ones benefit from your gift while you are living instead of leaving them assets once you decease. Commonly, individuals are more in need of funds earlier in their careers than later, so by giving these funds now you may be assisting them when it can really make an impact (i.e. fund education, help with a first-time home downpayment).
2. Setting Up a Trust
There are many types of trust and what is best for you is best discussed with an estate planning attorney. Revocable Living Trusts do not reduce estate taxes but can help with probate. Irrevocable Trusts remove assets from your estate, helping to lower taxable value. Bypass Trusts (Credit Shelter Trusts) allow married couples to double the $1M exemption effectively by splitting assets. In the state of Oregon, many couples exceed the $1M especially given the climb in home values. The median home in the Portland Metro Area now sells for $499,0001 up significantly from $242,300 in 2010 2. Home owners with any investments or savings can quickly find themselves exceeding the $1M threshold.
3. Charitable Giving
Donate to charities, establish a Charitable Giving Fund or set up a Charitable Remainder Trust (CRT) to remove assets from your taxable estate while receiving income for life. If you are 70 ½ and the owner of a Traditional IRA, you can send Qualified Charitable Donations directly from your IRA to the 501c3 charities of your choice. The charities receive the QCDs tax free, you reduce your estate and support causes that are important to you. As of 2025, you can distribute up to $108,000 a year from your Traditional IRA to 501c3 organizations.
You can also name a charity as a beneficiary of your Traditional IRA, which also acts to reduce your overall estate when you decease.
4. Life Insurance Planning
If your life insurance policy is owned by an Irrevocable Life Insurance Trust (ILIT) instead of you, the proceeds are excluded from your taxable estate. Look to enlist the assistance of an estate planning attorney and qualified trustee if an ILIT is of interest to you.
5. Spend Down Your Assets
When possible, use your wealth for travel, experiences, home improvements, or other expenses that reduce your estate size while ensuring you have enough to cover the essentials of life. By having a conversation with your financial advisor, they can help you determine how much you can safely withdraw from your investments each year so that you are reducing your estate but not overspending.
Proper estate planning ensures that more of your wealth goes to your loved ones and the causes you care about, rather than to taxes. By proactively implementing strategies like gifting, trusts, charitable giving, and smart spending, you can navigate Oregon’s $1 million estate tax threshold with confidence.
Every financial situation is unique, so working closely with your financial advisor and an estate planning attorney can help you craft a plan that aligns with your goals. Start planning today to protect your legacy and maximize the impact of your hard-earned assets.
1 Home Values in Portland, OR, Realtor.com, last modified March 4, 2025
https://www.realtor.com/realestateandhomes-search/Portland_OR/overview
2 Ryan Frank, “Portland home prices fall to $242,200 median,” Oregonian, last modified January 13, 2010
https://www.oregonlive.com/business/2010/01/portland_home_prices_fall_to_2.html
Seasons Financial Group, Inc and LPL Financial do not provide legal advice or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.