The Ohio Estate Tax is Coming to an End! | Tax Tip of the Week | No. 103

Ohio Estate Tax UpdateThe recently enacted 2012-2013 budget that Gov. Kasich signed into law includes a provision that eliminates the Ohio estate tax.  Before this repeal, Ohio taxed anyone who died with assets above $338,333 at a tax rate of up to 7%.  This was the lowest exemption amount of any state in the United States.Unfortunately, the repeal is not immediate.  Anyone who dies, on or after January 1, 2013, will not face the burden of the Ohio estate tax.  Until January 1, 2013, however, the current estate tax law will continue to apply.  This means that if someone dies before that date, their estate is still subject to the current tax law.The repeal of the Ohio estate tax is great news.  It affected a large number of Ohioans, many of whom had accumulated only modest wealth.  It particularly helps Ohioans who many times are asset-rich but cash poor---such as farm families.  Once the repeal goes into effect, not only will you not owe any estate tax, you will not need to hire a professional to prepare and file the tax returns.It is important to remember that even though this is a “permanent” repeal of the Ohio estate tax, all that really means is that it does not automatically come back at some point in the future.  What one administration grants, another can take away in the future.  There is nothing that prohibits a future administration from reenacting the Ohio estate tax.Even though the Ohio estate tax is being repealed, combined with the increase of the Federal estate tax exemption, this does not mean you should ignore your estate planning needs.  Estate planning is not just about money and taxes.  We highly recommend you consult with an estate attorney to reevaluate your estate planning needs.  We can refer you to a competent estate attorney if you need an introduction.Editor’s Note:  This TTW relies heavily upon an update written by:O’Diam & Stecker Law Group, Inc.75 Harbert Dr.Dayton, OH  45440(937) 458-0574 As always, give us a call if you have any questions.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt - the guy behind TTW...until next week.