Oregon has its own estate tax, separate from the federal one, and it starts at $1 million. The federal exemption runs in the millions per person and climbs with inflation every year, so most families hear "estate tax" and file it under somebody else's problem. Oregon's threshold has sat at $1 million since 2012 and it doesn't move with inflation at all.
A million dollars is not a mansion anymore. Add up the house at market value, whatever is in the 401(k) and the IRA, the checking and savings, the vehicles, a share of a family business, and any land. Then add the death benefit of any life insurance policy you own on yourself. People miss that last one. The money goes to your beneficiary with no income tax, and it still gets counted in your estate if you were the owner. A $400,000 house, $350,000 in retirement accounts, and a $500,000 policy comes to $1.25 million, and that estate files an Oregon return.
The Oregon rate starts at 10% on the amount above $1 million and climbs to 16% at the top. On $250,000 of excess, that's somewhere around $25,000 to $30,000 leaving the estate before anybody inherits anything. The return and the payment are both due nine months after the death. That means the family has to find real cash inside nine months. Usually the biggest asset in the estate is a house nobody wants to sell in a hurry.
Oregon has no portability. Portability means a surviving spouse can add the first spouse's unused exemption to their own, and the federal system allows it. Oregon does not. So a married couple that leaves everything outright to each other has one $1 million exemption to work with when the second spouse dies instead of two. Couples who plan around this usually split ownership of assets between them. Then they use a credit shelter trust, which means a trust that holds the first spouse's share so it never becomes part of the survivor's estate. That's attorney work, and it has to be done before the first death.
Anything left to a spouse passes free of Oregon estate tax under the marital deduction. So does anything left to a qualified charity. The tax lands on what goes to the kids, the grandkids, and everybody else.
If you own a policy on your own life and the estate is anywhere near that threshold, ownership is the lever. A policy owned by an irrevocable trust, or by an adult child, is generally not counted in your estate, because you don't own it. But you can't hand off a policy you already own and have it work right away. Gift a policy and die within three years and the IRS pulls the full death benefit back into the estate as if the transfer never happened. That three-year clock is why this gets decided early instead of late. The wider version of the question, moving money to the next generation on purpose instead of by default, is a LIFE Pod episode Carlo Viqueira and I recorded on generational wealth.
I'm a licensed insurance broker and not a CPA or an attorney. Oregon's threshold, its rates, and the federal numbers can all change. An estate anywhere close to $1 million needs somebody who does this work for a living to run the real figures. What I'd do first is add it up on one page. House, retirement accounts, everything else, and the death benefits. If the total starts with a 1, start the conversation now, while there's time for a three-year clock to finish running. And while the file is open, look at the beneficiary forms, because the five-minute beneficiary checkup catches the half of this problem that has nothing to do with taxes.