Collier Law assists most of our clients with basic tax planning to ensure married couples get their full exemption in Oregon, but federal estate tax has been less of a concern for many of our clients in recent years. However, unless Congress takes sudden action, federal estate and gifting taxes are due to become a more pressing concern for more of our clients. With the right planning, some of these issues can be mitigated, but it’s crucial to act sooner rather than later when it comes to getting your affairs in order.
What Does the Current Estate Tax Mean to You?
Federal estate tax currently has an exemption amount of $13.99 million for individuals or $27.98 million for married couples. This means that people who pass away in 2025 with less than that amount are not taxed any federal estate tax. Any assets above the exemption amount would be hit with up to a 40% estate tax paid to the government, reducing the overall amount your beneficiaries receive.
Oregon’s estate tax is $1 million for individuals and, unlike federally, currently requires proper estate planning to capture a deceased spouse’s exemption. This has meant ensuring Oregon’s estate tax, or at least the marital exemption, is handled has been a bigger priority for most of our clients than anything happening federally during the last few years.
However, the currently high federal exemption limits are temporary, hinging on the Tax Cuts and Jobs Act of 2017 that’s due to sunset at the end of this year and drop many tax rates back to their 2017 values. This means that your estate planning needs may change next year.
What is Happening with the Federal Estate Tax when January 1st, 2026 Hits?
Next year, the federal estate tax will drop its exemption amount to roughly $7 million for individuals and $14 million for married couples. This lowered exemption amount will put more people in the range of being taxed federally for their estate.
Many clients are surprised by how much their assets can actually add up to when it’s time to calculate their estate’s net worth. Property values rise after purchase, the little objects in our homes accumulate into decent amounts of money when totaled, and investment accounts fluctuate their way up in value over the years. Even if your estate isn’t currently in the range of immediate concern, market trends expect our investments to double in value about every decade. For clients who expect to see standard growth in their assets, it’s crucial to take advantage of this higher exemption period to get your estate plan on the right track to house your growing assets.
Will Congress Pass Another Act Raising Exemptions Levels Again So That No Advanced Planning is Needed?
It’s possible that Congress will pass another Act to keep the exemption levels raised, but not something that you should base your estate planning on. Nothing has been passed to cement the Tax Cuts and Jobs Act in the years it’s been in effect and Congress has been aware of the approaching deadline. Continuing the “wait and see approach” would mean losing crucial time that could have been used for planning if nothing gets done to extend the high exemptions.
Collier Law has long been a fan of the “belt and suspenders approach” to estate planning. While we may not have a crystal ball to predict the future, it’s our belief that the best course of action is to make sure extra protections are in place ahead of time rather than find our clients lacking necessary or helpful tools in crucial moments. Setting your estate up for success means taking the time to plan in advance.
If the Federal Exemptions Only Lower at the Beginning of 2026, Can Advanced Estate Planning be Put Off Until Later in the Year?
A solid estate plan is not one that’s rushed and complex tax planning requires a lot of consideration be put into finding the best mix of tools that suits your unique situation of assets and desires. It’s something that should be considered with your estate planning attorney and financial advisor and may require you to think about things that your foundational estate planning did not prompt.
Additionally, holidays can create gaps in scheduling openings for you and your professionals, and both financial advisors and estate planning attorneys often book well in advance for meetings. The longer you wait, the more risk you put yourself in of your professionals not having the time to meet with you and execute a solid plan before the end of the year.
The best time to start this planning was yesterday, but the second best time is today. Getting initial consultations started now can go a long way towards future planning being what you want rather than a last minute scramble.
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What Sorts of Tools Will Likely be Discussed for Advanced Estate Planning?
To get a solid plan in place, it’s important to talk to your professionals about your specific situation so that they can properly help you weigh the pros and cons. However, we can provide an introduction to some of the more commonly used concepts that might come up when you meet with your estate planning attorney and your financial advisor.
The overview of these concepts will be brief to avoid going into detail that might not be applicable to your situation or may be overly complicated. Advanced planning can be difficult to imagine when you aren’t familiar with the variety of options and the variety of ways to use those options. It is our desire that these ideas be used as a jumping off point to get you thinking about the different tools your professionals may go in depth with you about and expand your idea of advanced estate planning rather than try to replace a consultation.
Utilizing gifts above your yearly limit before the exemption amount goes down again.
Every year there is a certain amount of gifting you’re allowed to do before it starts impacting your taxes. For many individuals, gifting can be a great way to start seeing their beneficiaries make use of their estate before passing. In 2025, the gift tax exclusion is $19,000 per individual. Married couples each have their own gift tax exclusion, meaning you and your spouse can gift up to $38,000.
This doesn’t mean you can’t give above that amount though. When you want to give above the gift tax exclusion amount, the extra you’ve gifted is recorded and lowers the exemption of your estate after your passing.
This is incredibly important now when the federal estate tax exemption is so high because the IRS has clarified that gifting done while the federal estate exemption amounts are currently higher won’t penalize you once they drop again.
This means that if there is large gifting you want to do above your yearly limit, it’s best to make those gifts this year before the federal estate exemptions drop again. Discussing details with your financial advisor can help you weigh if now is the right time for you and your beneficiaries.
Creating Charitable Trusts
If charitable giving is already part of your planning, it may be worth discussing your options regarding different types of charitable trusts. Some charitable trusts can even be structured to use the same gift of assets to benefit both charities and your beneficiaries down the line, allowing you to “give twice” and take advantage of the tax benefits of charitable giving.
Discussing your goals with your estate planning attorney can help us to figure out what kind of charitable trust would best suit your situation and help you understand the full benefits and limitations of each option for you.
Creating an Intentionally Defective Grantor Trust (also called an IDGT)
An intentionally defective grantor trust is a way to keep assets out of your estate as they appreciate in value. The grantor, you, pays income taxes on behalf of the trust, but isn’t considered the owner of the assets, so when it comes time to calculate your estate’s net worth, the assets won’t be included. With many options for both funding and beneficiaries— including a spouse as beneficiary in some circumstances— IDGTs are a broad category of advanced estate planning that make an attractive option for many larger estates.
Since there are many different types of IDGTs, which one works best for your situation is something to discuss with your estate planning attorney. As IDGTs are irrevocable, it’s especially important you properly discuss your concerns in advance of the year-end deadline if you’d like to make proper use of this tool.
What to do if You Aren’t Sure Whether or Not You Need or Want Advanced Planning?
Ultimately, your estate plan is a personal decision. Your attorney at Collier Law is here to help be your expert so you can make informed decisions for your plan. If you aren’t sure whether or not advanced planning is right for you as the sunsetting of the high estate tax exemptions loom, lean on your professionals to help talk you through concerns so that you can make the best choice for your legacy.
Ryan W. Collier
Ryan W. Collier is a highly regarded estate planning and probate attorney based in Salem, Oregon, with licenses to practice in both Oregon and Washington. His practice specializes in advising clients on estate planning, probate and trust administration, and fiduciary liability, with a particular focus on helping clients minimize estate taxes and maximize the value passed on to their heirs. Ryan’s extensive background in financial planning gives him a unique advantage in providing tailored legal solutions that prioritize privacy, security, and peace of mind. His exceptional legal knowledge has earned him an AV Preeminent™ rating from Martindale-Hubbell, the highest honor available, reflecting his expertise in trusts, estates, and probate law. Ryan was also recognized by Super Lawyers Magazine as an Oregon Rising Star in 2010 and 2011, an award given to fewer than five percent of attorneys in the state.
Beyond his legal career, Ryan is deeply invested in his community, actively contributing to a variety of local organizations. He has served on the boards of the Salem Leadership Foundation and the Salem Foundation, where he currently holds the position of board chair. Ryan’s commitment to community service earned him a spot in the Statesman Journal’s “Top 20 under 40” in 2010 for his significant contributions to Salem. He is also an avid volunteer with the Boy Scouts of America, where he has received the District Award of Merit for his exceptional service to youth. Ryan’s passion for service extends to his role as an adjunct professor at Willamette University College of Law and his work as a mentor in the law school’s program. Outside of his professional and community duties, Ryan enjoys spending quality time with his wife, Holly, and their three teenage sons, appreciating the natural beauty of the Pacific Northwest and the close-knit community of Salem.