Committeed Hearing on Portability Would Let Surviving Spouses Use Unused Oregon Estate Exclusion

The House Committee on Revenue held a combined public hearing April 3 on House Bill 3,688 and House Bill 3,934, which would allow portability of Oregon’s estate tax exclusion so a surviving spouse can claim the unused exclusion from a deceased spouse. Under current Oregon law the state exclusion is $1,000,000 per person and unused exclusion generally is lost on a spouse’s death; portability would effectively allow many married couples to have up to $2,000,000 in exclusion.

Presenters and witnesses described the proposal as a technical change that would spare many middle-income families expensive and complex estate planning and repeated administrative costs for trust administration. Representative E. Warner Raschke (R-House District 55) outlined a dash-1 amendment that replaces the term "personal representative" with "executor" to avoid requiring full probate to claim portability, and that would grant the Oregon Department of Revenue rulemaking authority to extend the deadline to claim portability in some cases. Raschke noted federal practice and an IRS revenue procedure that allows a surviving spouse additional time to claim portability in specified circumstances.

Senator Mark Meek (chair of the Senate Finance and Revenue Committee), Representative Hai Pham and several other legislators and stakeholders testified in favor. Attorney Heather Gilmore, then-chair of the Oregon State Bar Estate Planning Section, described portability as a way to extend benefits to people who do not have formal trust-based estate plans and to reduce long-term administration costs and complexity for smaller estates. John Hawkins (CPA) and other estate-planning professionals said portability would eliminate the need for many families to create and administer bypass trusts after the first death, saving recurring legal and accounting fees. Several witnesses recommended statutory language align with federal practice: they flagged the typical federal filing deadline (nine months) and noted IRS Revenue Procedure 2022-32, which allows a portability election to be made within five years in certain circumstances.

Support came from a broad coalition of practitioners, business groups and advocacy organizations. Tax Fairness Oregon and the Oregon Women’s Rights Coalition registered thoughts on the broader estate tax landscape but many witnesses urged the committee to adopt portability as a fairness measure that reduces complexity for ordinary Oregonians. Several witnesses recommended technical changes: use of "executor" instead of the narrower "personal representative," allowance for trusts and fiduciaries to make elections, and granting the Department of Revenue authority to align timing and procedural details with federal practice.

Ending: The committee closed the public hearing after a full roster of witnesses; no roll-call votes or formal committee action were taken during the April 3 hearing.