On Money & More – August 2025

OREGON IS a phenomenal place to live. The quality of life in Southern Oregon and the community of the people who live here are both amazing. Oregon, however, is not a great place to die! Oregon is one of just a handful of states (16 states and Washington DC) that impose a state-level death (estate) tax—and it can catch families off guard. While the federal estate tax exemption sits at a lofty $13.61 million in 2024 (and going up to $15 million with the One Big Beautiful Bill Act), Oregon’s exemption is just $1 million, and it hasn’t been adjusted for inflation since it was enacted in 2003. That means many Oregonians with relatively modest estates, particularly those who own real estate, could end up leaving their heirs with an unexpected tax bill.

How You Should Plan Ahead—When it comes to minimizing Oregon estate taxes, thoughtful lifetime planning can make a significant difference. Unlike the federal government, Oregon does not typically impose a gift tax or add prior gifts back into your estate—even those made shortly before death (assuming the gift was given without restrictions). This means that giving away assets during your lifetime can, in some cases, effectively reduce the size of your Oregon-taxable estate. However, gifting isn’t always straightforward. For example, transferring appreciated assets during life may deprive your beneficiaries of a stepped-up cost basis, potentially resulting in higher capital gains taxes if they later sell the asset. A well-balanced estate plan should consider both estate and income tax impacts, as well as your own financial needs during retirement.

The Advisor’s Role: Guiding the Discussion—This is where a financial advisor comes in. A seasoned advisor works in concert with your estate attorney—not to replace them, but to model different strategies over time and help you understand the financial ripple effects. Should you consider lifetime gifting using an irrevocable trust? Which assets are best suited for gifting? Is life insurance structured properly to cover the tax burden—or is it just inflating your taxable estate?

A financial advisor can run estate tax projections, stress-test cash flow needs, and ensure your assets are titled in ways that align with your broader goals. For blended families, business owners, or those with out-of-state property, the complexity grows—and so does the need for integrated advice.

Proactive Planning Pays—Oregon’s estate tax rates start at 10% and quickly rise to 16%. With thoughtful, proactive planning, there are tools to mitigate this tax over time, but it requires collaboration, not just a one-time legal document.

If you haven’t reviewed your estate plan in the past few years (or you don’t have one at all) now is a good time to engage and make sure your estate house is in order. Updating your estate documents is one of the best gifts you can give to the next generation!

All opinions and data included in this commentary are as of July 11, 2025 and are subject to change without notice. The opinions and views expressed herein are of Cutler Investment Counsel, LLC and are not intended to be a forecast of future events, a guarantee of future results or individual investment advice including the asset allocation provided. Nothing herein should be construed as tax advice. This article is provided for informational purposes only and should not be considered a recommendation or solicitation to purchase or sell securities. This information should not be used as the sole basis to make any investment decision. The statistics have been obtained from sources believed to be reliable, but the accuracy and completeness of this information cannot be guaranteed. Investing involves risk, including the potential loss of principle. Neither Cutler Investment Counsel, LLC nor its information providers are responsible for any damages or losses arising from any use of this information.