You may be concerned about the tax implications of your estate plan. The different types of taxes and the rules involved with each can seem confusing.
Estate tax is a tax paid by your estate before assets are distributed to heirs. An inheritance tax is a tax paid by an heir or beneficiary based after receiving an inheritance.
Federal and state estate taxes
Fortunately, Ohio does not have a state tax. This means that your estate will not be taxed by the state of Ohio no matter its value.
The federal tax in 2025 only applies if your estate is worth more than $13.99 million. Unless your estate is worth more than this number, it will not be taxed by the federal government. If your estate is higher than this number, only the amount over the exemption is taxed. Married couples can double the federal tax exemption to $27.98 million.
Inheritance tax
Ohio also does not have an inheritance tax. Your beneficiaries and heirs will not be taxed on any property or money they receive from your estate. Likewise, if you inherit money or property from someone, you will not be taxed on it.
However, if you inherit from someone in a state that does have an inheritance tax, you could potentially owe tax to that state even if you do not live there.
Minimizing your tax liability
If you are worried about whether your estate or family members may owe taxes after you pass away, there are steps you can take to reduce or avoid taxes. Setting up a trust, using a gift exclusion, making charitable gifts and keeping up to date with tax laws are some possibilities.
Learning your options to handle taxes when setting up your estate plan can help save your loved one’s time, money and stress in the future.