What Are Common Misconceptions About Estate Taxes?
Estate taxes are often misunderstood, which creates a major roadblock to effective planning. Many people fail to prepare properly due to misinformation or a false belief that estate taxes don't apply to them.
At The Law Offices of DuPont and Blumenstiel, we help families across Central Ohio, including Dublin, Hilliard, Powell, Lewis Center, Marysville, Worthington, and Columbus, create thoughtful, personalized estate plans.
If you're curious how estate taxes apply to you or your loved ones, you're not alone. Estate taxation is a complicated area of law. But, we’re here to clear the confusion and make things more manageable. Let's look at estate taxes and the myths that often surround them.
What Are Estate Taxes?
Estate taxes, sometimes referred to as “death taxes,” are state and/or federal taxes imposed on the transfer of a person’s assets after their death.
These apply to the asset value that exceeds certain thresholds, which are adjusted annually at the federal level. Estate taxes typically include anything that would be considered a 'probate asset' such as real estate, cash, investments, and other personal property not placed in a trust.
While Ohio doesn’t impose a state estate tax, residents are still subject to federal estate taxes when exceeding high valuation thresholds. Therefore, it's important to understand the common misconceptions surrounding estate taxes.
Misconception #1: Estate Taxes Only Affect the Rich
This is a common belief, likely because of media coverage about wealthy individuals and estate taxes. While federal estate taxes currently only apply to estates valued over $13,990,000 (as of 2025), this exemption changes over time. Starting in 2026, the exemption is expected to be significantly reduced, impacting many more estates across the country.
For Ohio, where rising property values and investments are common, estate tax implications could become relevant sooner than expected. A home, retirement account, and family assets could easily combine to exceed the exemption when the threshold lowers.
Misconception #2: All Assets Are Taxed Equally
Not all assets are taxed the same way. Life insurance payouts, for instance, can sometimes be included in your taxable estate. On the other hand, certain retirement accounts or marital transfers may be excluded.
Without proper planning, your heirs could have unexpected tax liabilities simply because of the asset type or how it’s titled. Proper structuring, such as creating trusts or factoring in gifting strategies, can make a huge difference. By organizing assets strategically, you can often reduce or avoid certain estate taxes.
Misconception #3: A Will Protects My Family from Estate Taxes
Wills are an important foundational document in estate planning, but they do not shield your estate from tax obligations. A will establishes who inherits your assets and how they are distributed, but it doesn’t offer protection from estate taxes.
Additional estate planning tools may be necessary to address taxation concerns. Trusts, for instance, can minimize estate taxes and provide greater flexibility in managing assets, reducing tax liabilities, and preserving wealth for your family.
Misconception #4: I Can’t Do Anything to Lower Estate Taxes
Many people believe that estate taxes are inevitable and that there’s nothing they can do to reduce their impact. The truth is that certain legal strategies can help reduce or even eliminate estate tax obligations. These include:
Lifetime gifting: You can give financial gifts to your heirs during your lifetime. The law allows annual tax-free gifts up to a certain amount ($19,000 per recipient in 2025). Over time, this can significantly reduce the size of a taxable estate.
Trust planning: Irrevocable trusts can remove certain assets from your taxable estate, protecting them for future generations.
Charitable contributions: Donating a portion of your assets to qualified charitable organizations can not only make a meaningful impact but also reduce the size of your taxable estate.
These are just a few of the strategies available to Ohio residents looking to protect their wealth and pass on more to their families.
Misconception #5: I Don't Need an Attorney to Handle Estate Taxes
It is a dangerous misconception to assume that estate tax concerns can be handled with a quick online search or a DIY legal template. Without understanding estate planning laws, particularly those related to taxes, families often leave potential savings on the table or risk complications when it is too late.
At The Law Offices of DuPont and Blumenstiel, we take the guesswork out of estate planning. Our personal approach helps us tailor every aspect of the estate planning process based on your needs, goals, and family dynamic.
Ohio Laws Governing Estate Taxes
Ohio repealed its estate tax in 2013. However, Ohio residents are subject to federal estate taxes, which is critical for residents in areas where property values and business ownership might bring estates above the federal threshold.
However, some inheritance or income related to an estate (such as beneficiary payments from certain financial accounts) may still trigger tax obligations at the state or federal level.
Estate Planning Attorneys Serving Dublin, Ohio
At the Law Offices of DuPont and Blumenstiel, we cherish the relationships we build. Using cutting-edge tools in legal, tax, and financial planning, our attorneys help clients across Central Ohio, including Dublin, Hilliard, Powell, Lewis Center, Marysville, Worthington, and Columbus.
Call the Law Offices of DuPont and Blumenstiel at 614-389-9711 to see learn about the tax planning and estate planning strategies we use to help our clients.
Gregory S. DuPont, Estate Planning Attorney, Certified Financial Planner
Initially focused on law and accounting, Greg's early career centered on solving client problems through legal expertise. However, after working on a trust dispute case, he realized that preventative financial planning could have avoided costly conflicts, which led him to shift his focus.
After earning his CFP certification, he chose to combine his legal and financial planning skills to offer a more comprehensive service to his clients. His approach centers on education, guidance, and relationship-building.
Greg is a respected speaker on estate and financial planning, probate, and estate administration. After 30+ years in the legal industry, Greg has the ability to use best-in-class legal, tax and finance tools to makes sure your money supports your life and the way you want to live it.