Estate Tax Update

Federal & Massachusetts Estate Tax Alert

 

FEDERAL ESTATE TAX: 

 

As of January 1, 2017, the federal estate tax credit is now $5.49 million.  With the federal estate tax "portability" feature, spouse's can double that to $10.98 million, with a 40% tax on the excess.

 

MASSACHUSETTS ESTATE TAX: 

 

Even though most estates will be non-taxable for federal estate tax purposes (less than $5.49 million), Massachusetts residents still have to worry about the state estate tax, since the Massachusetts estate tax threshold is still only $1 million (not set to change).  The $1 million is just a "filing threshold", meaning that if your estate exceeds $1 million, the entire estate is taxed in MA, up to 16%.  For example, for a $2 million estate (including real estate, liquid assets, retirement plans and life insurance), the MA estate tax would be over $100,000. 

 

There are several estate planning techniques and documents that allow you to substantially reduce (and possibly eliminate) the MA estate tax that would be due at death.

 

It is very important for MA residents, married or single, to learn about Trusts and other techniques to reduce the MA  estate tax and pass more on to their intended beneficiaries.

In any event, whether your estate is more or less than $1 million, you should have the basic essential estate planning documents in place - a Will, Power of Attorney and Health Care Proxy.


Robin Gorenberg, Attorney-at-Law

(617) 731-9924

robingorenberg@gmail.com