Efforts to Raise Oregon’s Estate Tax Exemption

Why Oregon’s $1 Million Estate Tax Threshold is Under Growing Pressure

Oregon’s estate tax exemption has long been a point of discussion among estate planners, residents, and anyone searching for an estate planning attorney in Salem, OR. Many people are surprised to learn that Oregon has one of the lowest estate tax thresholds in the nation, at only $1 million.

Oregon’s threshold has not changed in almost 25 years and has never been adjusted for inflation. As property values and investments grow, more and more Oregon families find themselves subject to Oregon’s estate tax. In fact, the number of estates paying Oregon’s estate tax has more than doubled since 2012. These days, a taxable estate can be reached with property value and a life insurance policy alone.

So what is being done to address the estate tax conundrum? For now, the answer may come down to something simple: legislation, advocacy, and a bit of old-fashioned lobbying.

What is Oregon’s Estate Tax? 

Oregon’s estate tax is a state-level tax applied to the transfer of a person’s assets after death. If the total value of an estate exceeds $1 million, the estate is required to pay tax on the amount above that threshold. Typically, the tax is paid by the estate itself before assets are distributed to beneficiaries. Oregon’s estate tax rates are graduated, meaning they increase as the value of the taxable estate grows. Current estate tax rates range from 10% to 16%. 

Some argue that Oregon’s estate tax provides significant public benefits. According to the Oregon Center for Public Policy, Oregon’s estate tax is projected to bring in over $1.1 billion in the next budget period. As the third-largest source of revenue for Oregon’s General Fund, it helps support essential public investments, including public schools, mental health services, affordable housing, and wildfire prevention.

But how does Oregon’s estate tax compare to other estate tax structures? 

Federal Estate Tax Exemption

On the federal level, the federal estate tax exemption was recently raised to $15 million per individual, and $30 million for married couples for the 2026 tax year. Federal law also allows something called “portability.” This means that if one spouse dies without using their full exemption, the surviving spouse can use the remaining amount.

Oregon’s estate tax works differently. Without careful planificación patrimonial, Oregon follows a “use it or lose it” system, meaning each spouse has only a $1 million exemption, and the unused exemption does not transfer to the surviving spouse.

For example, if one spouse dies and leaves everything to the surviving spouse, the surviving spouse does not receive a $2 million exemption. Instead, they still have only a $1 million exemption, even though they now own all the couple’s assets.

Without proper estate planning, this can lead to significantly higher tax exposure for married couples.

Other Estate Tax Exemptions

Oregon is also an outlier when compared with other states. 

Only 13 states have an estate tax and many of them have adjusted their exemptions over time to account for inflation and rising property values. Our neighbors in Washington recently increased their estate tax exemption from $2 million to $3 million beginning in 2026. Over 30 states do not have any death taxes at all, including California, Nevada, and Idaho. 

As other states “modernize” their estate taxes, Oregon lawmakers are considering whether the state’s long-standing $1 million exemption should also be revisited.

Recent Legislative Action

There have been several attempts to address Oregon’s stagnant estate threshold. Numerous proposed bills have been presented in past legislative sessions to no avail.

During the most recent 2026 legislative session, lawmakers made what appeared to be a promising step toward addressing Oregon’s estate tax threshold. During this last session, the Senate Democrats passed SB 1511, which proposed to increase the $1 million threshold to $2.5 million, and it would rise with inflation. Many estate planners initially viewed the proposal as a step toward modernizing the state’s estate tax system.

However, the bill also included a provision that would increase the top estate tax rate from 16% to 19.9%, which led to criticism from some groups who believed the change would make the overall tax structure unfairly burdensome.  While the bill provided a $2.5 million exemption, the bill appeared to require that any estate valued over $2.5 million suffered a claw back to a $1 million exemption.

When the bill reached the House Revenue Committee, it ultimately stalled. The Committee did not vote on the proposal before the legislative session ended, and the bill died upon adjournment.

Initiative Petition 51

Though SB 1511 did not ultimately lead to a change in Oregon’s estate tax, the conversation regarding estate tax reform continues. Attention has now shifted to voters with the introduction of Initiative Petition 51, titled “End the Death Tax.”

The petition, filed by End the Death Tax PAC, aims to eliminate any death taxes altogether, including estate tax and inheritance tax, by January 2027. Supporters are currently gathering signatures to place the measure on the November 2026 ballot. Collier Law hosts as a signing location for those interested in supporting the petition. The deadline for signatures is July 1, 2026. 

If you would like additional information on the Initiative 51 or would like to financially support the effort donations can be made to the following PAC:

IP 51

End the Death Tax PAC

PO Box 12249

Salem, Oregon 97309

Conclusión

Regardless of whether Oregon’s estate tax laws change in the coming years, thoughtful estate planning remains critical. Strategic planning can help reduce potential tax exposure and ensure that assets pass to the next generation as intended. 

If you have questions about how Oregon’s estate tax may affect your estate, our team here at Collier Law would be happy to assist. 

Plan with Confidence: Estate Planning Solutions for Every Stage of Life

At Collier Law, a trusted estate planning attorney in Salem OR, comprehensive legal services are designed to protect your estate planning goals and preserve your legacy for your family members. From drafting a last will and testament, living will, and Living Trusts to guiding clients through trust administration and the probate process, their team ensures every detail is handled with care. Collier Law also assists with appointing a personal representative, structuring beneficiary designations, managing real estate interests, and preparing essential legal documents such as a power of attorney. With experience spanning business law, family law, and even planning involving a limited liability company, they take into account unique family dynamics and long-term financial affairs—helping clients in Salem, OR navigate probate court and beyond with confidence.