The current threshold for taxing estates in Massachusetts is $1 million. The Massachusetts estate tax regime operates very differently than the federal one. Below are a few items to note regarding the Massachusetts estate tax.

  1. If an estate exceeds $1 million, the entire amount above $40,000 is taxed. Therefore, it’s not just
    the amount above $1 million that is taxed…it’s the amount above $40,000 (if that $1 million
    threshold is met).
  2. Spouses cannot automatically combine their $1 million exemptions. Spouses must “utilize” the
    exemptions by incorporating tax planning, such as a trust. This is very important if you want to
    minimize your estate tax exposure.
  3. The estate tax rates range from 0.8% to 16% depending on the size of the adjusted taxable estate.

There are many strategies to reduce (or eliminate) your Massachusetts estate tax exposure. You can incorporate trusts, gifts, and a combination of both. It’s also very important to consider the income tax consequences when determining the best course of action.

It’s our job to help you decide what your objectives are and then advise you in order to minimize (or
eliminate) your estate tax exposure.