Estate Tax Planning in Ohio. Coordinated Counsel from Rhodium Law.
Ohio has no state estate tax. The planning that matters for most Ohio families happens at the federal layer, and it works best when it starts early.
Estate tax planning is the work of structuring assets so that what a family has built passes to the next generation with the tax exposure named, accounted for, and shaped well before it arrives. Because a closely held business, an investment property, and a family’s estate plan do not stay in separate lanes, this planning is held in coordination with the rest of a family’s legal life. We are a virtual firm serving families and business owners across all 88 Ohio counties. Our approach starts with strategy, not documents: a Strategy Session followed by a Vision Meeting, where the plan is shaped around the family before anything is drafted.
Ohio has no estate or inheritance tax; only the federal estate tax applies, and only to estates above the federal exemption. Married couples pass assets to each other tax-free, and a small set of gifting and trust tools reduces exposure over time.
- Does Ohio tax estates? No. Ohio repealed its estate tax effective January 1, 2013, with no separate inheritance tax.
- Who pays federal estate tax? Only estates above the federal exemption (IRC Section 2001).
- What about spouses? The unlimited marital deduction passes assets between U.S.-citizen spouses tax-free (IRC 2056), with portability of the unused exemption.
- How do families reduce exposure? Annual gifts, lifetime-exemption gifting, life-insurance trusts, and charitable strategies, layered over years.
What is estate tax?
Estate tax is a tax on the transfer of a person’s assets at death, calculated on the value of the taxable estate before property passes to heirs. In the United States, two layers of estate tax can apply to a decedent: a federal estate tax that reaches every state, and a separate state-level estate or inheritance tax that only some states impose.
The federal estate tax is imposed under Internal Revenue Code Section 2001 on the taxable estate of a United States decedent. The tax operates with an exemption, formally called the applicable exclusion amount under IRC Section 2010(c), that is indexed for inflation and has changed substantially over the past two decades. For most Ohio families, the federal estate tax is never triggered. For families whose combined assets approach or exceed the federal threshold, the planning becomes consequential and compounds across decades.
Does Ohio have an estate tax?
No. Ohio has no state estate tax and no separate state inheritance tax. Ohio repealed its state estate tax effective January 1, 2013, when House Bill 153 eliminated former Ohio Revised Code Chapter 5731. For an Ohio decedent, the only estate tax layer that can apply is the federal layer, and the state-layer exposure is zero.
That distinction matters for how an Ohio family plans. Some states impose their own estate tax, and some states impose a separate inheritance tax paid by the person who receives the property rather than by the estate itself. As of 2026, twelve states and the District of Columbia impose an estate tax, and five (Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania) impose an inheritance tax. Ohio families do not carry that additional layer. Ohio families with significant assets, or with property or heirs located in a state that does impose one of these taxes, still benefit from confirming the rules where that other property or heir sits.
Source: IRC Section 2001; Ohio H.B. 153 (2011)Who pays the federal estate tax?
The federal estate tax applies only to estates whose value exceeds the federal exemption amount in effect at the time of death, an amount set by Congress and adjusted for inflation under IRC Section 2010(c). As of 2026, that exemption is $15 million per person, a figure that can change with future legislation. Most Americans, including most Ohio families, fall well under that threshold and owe no federal estate tax at all.
A federal estate tax return, IRS Form 706, is required under IRC Section 6018(a) when the gross estate plus certain adjusted taxable gifts exceeds the exemption amount, even if no tax is ultimately owed. Married couples have access to portability, an election under IRC Section 2010(c)(5) that allows a surviving spouse to use a deceased spouse’s unused exemption. The families for whom this planning becomes consequential are typically business owners, real estate holders, and families with a concentrated or appreciating asset, where the total estate value is closer to or above the federal threshold.
How does the unlimited marital deduction work?
The most important rule for married couples is the unlimited marital deduction. Under Internal Revenue Code Section 2056, property passing to a surviving spouse who is a U.S. citizen passes free of federal estate tax, with no dollar limit. In practice, the tax is deferred at the first spouse’s death: nothing is owed until the second spouse dies, when the combined estate is measured against the exemption.
The deduction is also what makes portability work. Under IRC Section 2010(c), when the first spouse dies without using all of their exemption, the unused amount (the deceased spousal unused exclusion, or DSUE) can carry over to the surviving spouse, but only if the estate elects it by filing a Form 706. Portability lets a married couple preserve both exemptions without complex trust structures, and missing the election can quietly forfeit a large amount of shelter, which is why even a non-taxable first estate is sometimes worth a return.
Source: IRC Sections 2056 & 2010(c)What tools help Ohio families reduce federal estate tax exposure?
Federal estate tax strategy is built from a small number of well-understood tools, deployed in combinations shaped to the family. No single tool is the strategy on its own.
- Annual exclusion gifts. The federal annual gift tax exclusion under IRC Section 2503(b) lets a person transfer a set amount ($19,000 per recipient in 2026) to each of any number of recipients every year without using any lifetime exemption. A married couple gifting to several children and grandchildren each year can move meaningful value out of the taxable estate annually.
- Lifetime exemption gifts. Beyond the annual exclusion, each person has a lifetime exemption that can be used for larger gifts during life. A gift made today removes both the gifted amount and any future appreciation from the taxable estate, which matters most for an asset expected to grow, such as a closely held business interest or an income-producing property.
- Irrevocable life insurance trusts. An ILIT holds a life insurance policy outside the insured’s taxable estate. Life insurance proceeds are typically income-tax-free to the beneficiary under IRC Section 101(a), and when the policy sits inside an ILIT rather than in the insured’s own name, the proceeds may also stay outside the federal taxable estate.
- Spousal lifetime access trusts. A SLAT lets one spouse gift assets into an irrevocable trust for the other spouse’s benefit, using the lifetime exemption while preserving indirect access to the trust assets through the beneficiary spouse.
- Charitable trusts. Charitable remainder trusts and charitable lead trusts integrate charitable giving with estate tax strategy, providing income tax benefits during life while reducing the taxable estate at death.
- Generation-skipping trusts. These trusts are built to pass assets to grandchildren or later generations while making use of the generation-skipping transfer tax exemption under IRC Chapter 13.
For families where a closely held company is part of the estate, this planning is usually coordinated with a business succession plan, and for families also weighing long-term care costs, it is often coordinated with elder law planning as well, since asset protection and estate tax strategy frequently draw on the same trust structures.
Source: IRC Sections 2503(b), 2010(c)Why is estate tax planning called a strategy rather than a document?
Estate tax planning is not a single decision. It is a sequence of decisions made across years, each informed by what came before and what may come next: the annual gifting program, the trust structures shaped to the family’s situation, the life insurance integrated for liquidity, the business succession plan, the charitable plan, and the beneficiary designations that decide which assets pass through which mechanism. None of those decisions stands alone.
The annual exclusion compounds. The lifetime exemption can be used while it remains available. Trust structures need time to season before they perform as designed. That is the case for planning ahead of any deadline the law sets, and it is also simply the nature of a plan built around a family rather than a form. The Ohio family that begins this work while healthy and while the exemption is available generally has more tools available than the family that waits.
Frequently asked questions
Does Ohio have an estate tax?
No. Ohio repealed its state estate tax effective January 1, 2013, when House Bill 153 eliminated former Ohio Revised Code Chapter 5731. Ohio also has no separate state inheritance tax. For an Ohio decedent, the only estate tax layer that can apply is the federal estate tax under Internal Revenue Code Section 2001.
Does Ohio have an inheritance tax?
No. Ohio does not impose an inheritance tax, which is a tax some states charge to the person who receives property rather than to the estate itself. Ohio families should still confirm the rules for any property or heirs located in a state that imposes an inheritance tax.
What is the federal estate tax exemption right now?
The federal exemption, formally the applicable exclusion amount under IRC Section 2010(c), is indexed for inflation and changes periodically through both automatic adjustment and legislative action. As of 2026, it is $15 million per person. A Strategy Session can confirm where a family’s total assets sit relative to the current threshold.
Who pays the federal estate tax?
Only estates whose value exceeds the federal exemption amount at the time of death owe federal estate tax. Most Americans, including most Ohio families, fall under that threshold and owe none. Families closer to or above the threshold, often business owners or real estate holders, are the ones for whom this planning becomes consequential.
When is a federal estate tax return required?
A federal estate tax return, IRS Form 706, is required under IRC Section 6018(a) when the gross estate plus certain adjusted taxable gifts exceeds the exemption amount in effect at death, whether or not any tax is ultimately owed. Married couples may also file to elect portability of an unused exemption.
Can lifetime gifts reduce future federal estate tax exposure?
Yes. Annual exclusion gifts under IRC Section 2503(b) and larger gifts using the lifetime exemption can move both an asset’s current value and its future appreciation out of the taxable estate. The trade-off is that lifetime gifts are generally irrevocable, so the decision is shaped around what a family can afford to part with.
A first conversation
If you are an Ohio resident or business owner and want to understand how estate tax planning could shape what your family may pass on across generations, reach out to Rhodium Law. The first step is a complimentary fifteen-minute Strategy Session, a short, focused call where the Team at Rhodium Law learns what you are trying to accomplish and decides together with you whether we are the right fit. If it is, that call books your Vision Meeting, where your estate tax strategy begins to take shape. You walk away with a clear picture of what your plan looks like if you do nothing, and what it could look like with a tailored plan in place.
Book a complimentary 15-minute Strategy Session