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Early in June, we posted a blog entry indicating how Ohio was moving closer to an Estate Tax Repeal.  With the signing of the biennial budget by Governor Kasich last Thursday, June 30, 2011, repeal is now official!  The Ohio Estate Tax has been eliminated effective January 1, 2013.

Previously, Ohio held the dubious distinction of having the lowest state estate tax exemption amount in the country, at $338,333.  That distinction will soon belong to New Jersey, with an estate exemption amount of $675,000.

We don’t know exactly how local governments will react to this change. It is projected that, over the long term, additional revenue to the state will be generated as a result of Ohioans not relocating to other states to avoid the estate tax.  This, in turn, will have the effect of feeding the Ohio economy and job market, making up for the lost estate tax revenue.

Keep in mind though, that deaths occurring in 2011 and 2012 will still be subject to Ohio Estate tax at a potential rate of as much as 7%.

Needless to say, you should contact us or your estate attorney to determine how this change may affect your current estate plan.

We’ve made it well past the trust filing due date of April 15th, and in reflecting back on what we noted with our trust clients, I thought it would be helpful to educate our trustees as to why we ask for certain information in preparing your trust returns.

It appears that we may be one step closer to repeal of the Ohio Estate tax. On May 5, the Ohio House of Representative approved H.B. 153. Within this bill, was the inclusion of language eliminating Ohio’s estate tax, effective January 1, 2013.

Due to the late changes in the Federal Gift and Estate Tax law included in the 2010 Tax Relief Act passed on December 17, 2010, IRS Form 709 underwent significant revisions to incorporate those changes.

With the recent increase in the lifetime generation skipping tax exemption to $5 million, effective for 2011 and 2012, you may be thinking that there is no way that this could apply to you (or your spouse). While this may only affect a smaller portion of taxpayers than before for those with potential exposure, let me explain how this works, as simplistically as possible.

After spending most of 2010 procrastinating, Congress finally decided to throw a wrench into estate planning in mid-December by enacting the Taxpayer Relief Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Since then, all the estate planning professionals have been scrambling to make sense of the new law and ferret out the implications it has for taxpayers now. Some of the effects of this law are summarized in a few bullet points below: