Cincinnati Estate Tax Lawyer

Understanding the Federal Framework

Federal estate tax generally affects only estates that exceed the applicable federal exemption amount in effect at the time of death. Because Congress may change exemption levels and tax laws, periodic reviews of an estate plan are important for individuals with substantial wealth.

For example, a Cincinnati couple may own a manufacturing business, several rental properties in Ohio and Kentucky, and a sizeable investment portfolio. While they may not owe federal estate tax under today’s exemption, changes in the law or future appreciation of their assets could affect their estate. Regular planning allows them to adjust their strategy as circumstances evolve.

Estate Tax vs. Inheritance Tax

These terms are often confused, but they are different.

• Estate tax is generally assessed against the estate before assets are distributed.
• Inheritance tax is a tax paid by beneficiaries in certain states.
• Ohio does not impose an inheritance tax.
• Federal estate tax rules may still apply to qualifying estates.

An experienced Cincinnati estate planning attorney can evaluate your assets, coordinate tax planning strategies, and structure your estate plan to address both current federal requirements and your family’s long-term goals.

Estate Tax Exemption and Calculating the Gross Estate

The federal estate tax exemption plays an important role in determining whether an estate may be subject to federal estate tax. Although most Ohio estates fall below the filing threshold, families with significant assets should understand how the gross estate is calculated and how the exemption applies.

Understanding the Federal Estate Tax Exemption

The federal estate tax exemption is the amount that may be transferred before federal estate tax is imposed. For deaths occurring in 2026, the basic exclusion amount is $15 million per individual, although Congress may revise this amount in future legislation. The exemption also affects whether a federal estate tax return may be required in certain situations.

The gross estate consists of the fair market value of many assets owned or controlled at the time of death, not simply the property passing through probate.

Assets commonly included are:

• Real estate and rental properties
• Checking, savings, and brokerage accounts
• Retirement accounts
• Business ownership interests
• Personal property and valuable collectibles
• Life insurance proceeds in certain circumstances
• Certain jointly owned property
• Some non-probate transfers required to be included under federal law

Determining the value of these assets often requires appraisals, financial statements, and professional valuation of closely held businesses.

Example of a Gross Estate Calculation

Consider a Cincinnati resident who owns:

• A home worth $900,000
• Investment accounts totaling $6 million
• Retirement assets of $2.5 million
• A family business valued at $7 million
• Personal property worth $600,000

The estimated gross estate equals $17 million before deductions. The executor would then determine which deductions, credits, and exemptions apply, including debts, qualifying marital or charitable deductions, and the available federal estate tax exemption. Depending on those calculations, the estate may owe little or no federal estate tax despite exceeding the basic exclusion amount.

Because every estate is different, high-value real estate, business interests, and multistate assets often require careful valuation and planning. An experienced Cincinnati estate planning attorney can work with accountants, appraisers, and financial advisors to calculate the gross estate accurately, satisfy federal reporting requirements, and develop strategies that help preserve family wealth.

Federal Estate Tax vs State-Level Considerations and Filing Requirements

Understanding the difference between federal and state estate tax laws is an important part of estate administration.

While many Ohio estates will not owe estate tax, executors should still determine whether federal filing requirements apply and whether elections available under federal law should be made.

Federal vs. Ohio Estate Tax Rules

Ohio does not impose a separate state estate tax. However, certain estates may still be subject to federal estate tax if the gross estate and applicable lifetime transfers exceed the federal filing threshold. In addition, some estates file a federal estate tax return even when no tax is due in order to preserve valuable tax elections, such as portability.

Key differences include:

• Ohio does not assess a separate estate tax.
• Federal law establishes filing thresholds and reporting requirements.
• Federal estate tax rules apply uniformly across the United States.
• Filing obligations depend on the value of the estate and other federal requirements.

Marital Deduction and Portability

Federal law provides an unlimited marital deduction for qualifying transfers to a surviving spouse, which can significantly reduce or eliminate estate tax at the first spouse’s death. Federal law also allows eligible estates to elect portability, enabling a surviving spouse to use a deceased spouse’s unused federal estate tax exemption if the required return is timely filed.

When a federal estate tax return is required, the executor generally files IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. Form 706 reports the value of the estate, calculates any estate tax due, and allows eligible estates to make portability elections.

Important deadlines include:

• Form 706 is generally due nine months after the decedent’s death.
• Executors may request an automatic six-month extension to file by submitting IRS Form 4768 before the original due date.
• An extension of time to file does not automatically extend the time to pay any estate tax owed, although limited payment extensions may be available under IRS rules.

An experienced Cincinnati estate planning attorney can help determine whether Form 706 should be filed, coordinate with tax professionals, and ensure all applicable federal deadlines and reporting requirements are satisfied.