Oregon’s Estate Tax in 2025: What Changed, What Didn’t, and What It Means for Your Plan
The 2025 Oregon legislative session is officially in the books—and for estate planning, the news is more about what didn’t happen than what did.
Over the course of the session, eight separate bills were introduced that aimed to overhaul Oregon’s estate tax system. Some proposed raising the exemption threshold. Others tried to align it with federal limits or adjust it annually for inflation. But in the end? Not one of those broad reform efforts passed.
The $1 million exemption remains firmly in place. If your Oregon estate exceeds that threshold—even by a dollar—your heirs could be looking at a significant state tax bill unless you’ve planned ahead.
The One Bill That Did Pass: HB 3630
One change did make it through: House Bill 3630, a targeted update focused on families with natural resource properties—farms, forests, and fisheries.
Under Oregon’s existing law, these types of properties may qualify for up to a $15 million exemption if certain conditions are met. But that exemption has been tough to use in practice. It required personal ownership, strict material participation, and rigid holding rules that excluded many modern family business structures.
HB 3630 expands eligibility by making several important updates, effective for deaths occurring on or after July 1, 2025:
Business entities and trusts now qualify. The exemption no longer requires direct personal ownership. Land held in LLCs, partnerships, or revocable trusts can now be eligible.
Participation rules are clarified. The law now better defines what “material participation” means, allowing more flexibility in demonstrating that the family is actively involved.
Replacement property is allowed. Families that swap one qualifying property for another—such as selling one timber parcel and reinvesting in another—can preserve the exemption if certain conditions are met.
The bottom line? If your Oregon estate includes a working farm, timberland, or fishing operation—and you’ve taken steps to protect it through entity or trust ownership—you may now qualify for an estate tax exemption that wasn’t previously available.
But eligibility isn’t automatic. The law is complex, and you’ll need to meet specific holding periods, use tests, and documentation requirements. If the details don’t line up, the exemption won’t apply.
What This Means If You Don’t Own Natural Resource Property
For the vast majority of Oregon families—those whose estates include a home, retirement accounts, savings, and maybe a rental property—the failure of broader reform means the $1 million threshold still applies. There’s still:
No inflation indexing
No expanded spousal portability
No fix to how quickly even modest estates can hit the threshold in today’s housing market
If your estate is close to or over the limit, estate tax planning is still urgent.
Strategies like credit shelter trusts, lifetime gifting, and charitable planning can all reduce exposure—but they only work if they’re implemented before it’s too late. And many of these tools must be coordinated carefully with your will, trust, and beneficiary designations to be effective.
How Track Town Law Can Help
At Track Town Law, I help Oregon families take the guesswork out of estate planning.
Whether you need a simple will or a tax-sensitive trust plan, I offer flat-fee estate planning services that cover the full picture—from real property and retirement assets to family-owned businesses and special use properties. If you think your estate might qualify under HB 3630, we’ll review the statute line by line to ensure your plan meets the law’s technical requirements.
Want to talk through your situation? Book a free consultation today.
If you’d rather listen to this update, it’s also available as a special episode of the Passing the Baton podcast—part of our ongoing effort to make Oregon estate planning clear, practical, and accessible.
