The demise of the estate tax

An estate tax is a tax levied for the honor of dying. There were only 17 states that levied this tax. This January there will only be 16. Jeff Roth
Effective Jan. 1, 2013, the Ohio Estate Tax is no longer. This tax was one of several reasons why Ohioans would exit the state and establish residency in a non-tax state.  Gov. Kasich vowed to repeal this tax if elected and he has followed through with his promise. This tax was 7 percent of all of a deceased individual’s assets over $338,333. This was the lowest exemption amount in the nation.
It is anticipated that the repeal will entice those couples to return to Ohio. These same couples also moved to a state that has no income tax so it will be interesting to see if the repeal will be enough to have them return.
The reason for the delay in its starting date was to give villages, townships and cities time to correct future budgets reflecting the eliminations of the funds. These entities received eighty percent (80%) of the estate tax revenue. Actually, I am not sure how the municipalities and especially the townships will replace this revenue but there has been very little complaining and it appears that the repeal will stand.

A major reason for estate planning surrounded the prevention of paying Ohio Estate tax. With the repeal, our planning goals will shift and we will be at liberty to take more aggressive action to avoid federal tax and nursing home expense.
Any one that has what is known as an A-B revocable trust will need to have their trusts reviewed. We will be able to change the language and allow more assets to go direct to children. We will be able to protect large estates from end of life costs and know that assets, farms and businesses can be passed on to grandchildren or beyond.
With the use of a partial QTIP election, we can provide for the surviving spouse while guarantying that the family property is passed on down to future generations. The use of a disclaimer trust will allow the surviving spouse to make the correct decision at the death of the first spouse. We will no longer have to play a numbers game to avoid the Ohio Estate Tax.
This does not mean that only a trust will save money. We can use “Transfer on death”, or “joint and survivorship” titling to transfer property down to kids or grandkids. This also avoids probate and is not as complicated as a revocable trust. Historically any amount transferred to a non-spouse at death over the $338,333.00 would be subject to tax. This limitation will be gone.
The repeal of the Ohio Estate Tax will open many doors to simplify planning and allow individuals to plan and protect their assets for several generations by the use of generation skipping techniques. Taking advantage of a direct transfer to the next generation upon the death of the first spouse can protect assets from the cost of a nursing home. Once we get closer to the first of the year, it should be mandatory to review your existing documents and adjust to the new freedom from tax.

Jeff Roth is a partner with David Bacon and associate Jessica Moon of the firm ROTH and BACON with offices in Port Clinton, Upper Sandusky, Marion, Ohio and Fort Myers, Florida. All members of the firm are licensed in Ohio and Florida. Mr. Roth’s practice is limited to wealth strategy planning and elder law in both states. Nothing in this article is intended for, nor should be relied upon as individual legal advice. The purpose of this article is to provide information to the public on concepts of law as they pertain to estate and business planning. Jeff Roth can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. (telephone: 419-732-9994) copyright Jeffrey P. Roth 2012.

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