Does Ohio Have Estate Taxes?

If There Is No Estate Tax, Do I Still Need An Ohio Probate Attorney?

Does Ohio have an estate tax? The short answer is “No.” For anyone who is the executor of the estate of a person who died after January 1, 2013, the State of Ohio stopped assessing estate taxes. However; just because there may not be any estate taxes doesn't mean that you can forego the estate planning process, or that you should handle the Ohio probate process on your own.

Ohio Tax Exemptions Before 2013

Before 2013, the State of Ohio assessed estate taxes on the transfer of assets from anyone who died while a resident of Ohio. However, even before the outright elimination of the Ohio estate tax, many estates did not owe estate tax because of various tax exemptions. The most common was the spousal exemption which allowed the deceased person - the “decedent” – to leave everything to a surviving spouse, with no taxes assessed by the State of Ohio. Likewise, if the total value of the estate assets was less than $338,000 (the exempt amount), Ohio did not assess estate taxes.

Executors of the estates of people who died before 2013 were still required to file an Ohio state tax return, even if there was no tax due. However, for deaths occurring after 2013, no Ohio estate tax return needs to be filed.

What about federal estate taxes?

While the State of Ohio has eliminated estate taxes, federal taxes may still be owed. Federal estate taxes are levied against the estate of the person that died, not on the people inheriting property. The federal estate tax exemption, however, is $5 million. Thus, only people who die with an estate worth more than $5 million will need to pay estate tax.

To determine whether federal estate taxes are owed, an Ohio probate attorney will determine the value of the "gross estate" which means the sum of the value of the following assets:

• The decedent’s share of any real estate located in Ohio
• Bank accounts and cash
• Investment accounts
• Vehicles
• Personal property (anything that is not real estate)
• Life insurance proceeds payable to the estate
• Retirement accounts
• Any ownership interest in a small business, such as a sole proprietorship, Limited Liability Company (LLC), or small corporation
• Any gifts made during that are subject to the federal gift tax (gifts greater than $13,000 to a single recipient in one calendar year)

When calculating estate taxes, it is irrelevant whether the assets were owned in the decedent’s name or held in a revocable trust for purposes of avoiding probate. For estate tax purposes, all the assets are included. If the total of all the assets listed above is less than $5 million, the estate does not owe federal income tax.

If there are no estate taxes due, do I still need a probate attorney?

Estate taxes are just one part of the probate equation. While tax returns may not need to be filed, you should still consult with an experienced probate attorney to make sure that all the assets are accounted for and properly transferred.

If you live in the Columbus, Ohio area and have been appointed the executor of an estate, or if you have questions on how to create the smoothest possible transfer of assets upon your death through sound estate planning services, contact me today by calling (614) 263-5297, or fill out our online form. I work with families in Franklin County, Delaware County, Licking County, and throughout the greater-Columbus area.