The Federal Estate Tax exclusion amount is currently $12,920,000 per person or $25,840,000 per married couple. The Massachusetts State Estate Tax exclusion amount is currently $2,000,000 per person but cannot be “doubled” for the surviving spouse in the same fashion as the Federal Estate Tax Exemption.
In other words, even though the Massachusetts Estate Tax Exemption exclusion amount is $2,000,000, married couples typically need to engage in careful planning to ensure that they are positioned to take advantage of both of their Estate Tax Exemptions. Otherwise, under current Massachusetts Tax Law, the surviving spouse’s estate could be obligated to pay up to $320,000 more in estate tax than if there had been Estate Tax Savings strategies incorporated into the Estate Planning.
Estate Tax Planning tends to be one of the more complex parts of estate planning. Therefore, it is no wonder that many attorneys who do not focus their practice on Estate Planning tend to minimize the number of trusts that are created at the death of a client. In fact, in New England, where there tends to be a higher Death Tax than in other regions of the country, it is very common for “general practice” attorneys to provide that spouses automatically receive all of their inheritance outright, thereby foregoing potential Death Tax Minimization Strategies like using Estate Tax Savings Trusts. We have seen this trend in Western Massachusetts Estate Planning.
In our view, Estate planning is not just about “having a Will” or merely planning the transfer of assets from one generation to the next. Estate Planning while taking into consideration transfer taxes (Estate Tax, Gift Tax, and Generation-Skipping Tax) is particularly important in Massachusetts where there is a more onerous Death Tax than in most states. The estate planning process should always include an estate tax analysis, even if an estate does not currently exceed the estate tax exclusion amount.
Estate Tax Updates
News – Information – Analysis
- 2024 Federal Estate Tax ExemptionToday, the IRS announced inflation adjustments for various provisions of the Tax Code that will take effect for 2024. The IRS makes inflationary adjustments annually.Continue reading “2024 Federal Estate Tax Exemption”
- Old Colony Law’s statement on estate tax reliefToday, we issued a statement on the long-awaited tax relief legislation from lawmakers. Among other things, the legislation increases the Massachusetts estate tax threshold fromContinue reading “Old Colony Law’s statement on estate tax relief”
- Estate Tax News – Lawmakers unveil final tax relief legislationHere is our compilation of the media coverage following lawmakers’ release of their tax relief plan. From Boston Globe: Hailing it as a historic winContinue reading “Estate Tax News – Lawmakers unveil final tax relief legislation”
- Massachusetts estate tax relief legislationHere is the final tax relief legislation, as agreed upon by lawmakers. It is expected to pass both the House and Senate later this week.Continue reading “Massachusetts estate tax relief legislation”
- Estate Tax News – Lawmakers reach a deal on tax reliefMassachusetts lawmakers announced that they struck a deal on a comprehensive tax relief package, the details of which are to be announced in legislation toContinue reading “Estate Tax News – Lawmakers reach a deal on tax relief”
- Estate Tax News – Our View: Clock ticking for tax relief in MassachusettsThe Sun Chronicle weighs in with some commentary on the long overdue tax relief package. We could not have said it better ourselves! The clockContinue reading “Estate Tax News – Our View: Clock ticking for tax relief in Massachusetts”
- Estate Tax News – Landscape shifting again around stalled tax relief talksThe Hampshire Gazette provides an update on the internal legislative negotiations and the activities of the external forces attempting to influence those organizations: “BOSTON —Continue reading “Estate Tax News – Landscape shifting again around stalled tax relief talks”
- Estate Tax News – How Senators voted on tax reliefThe Lowell Sun provides a fairly comprehensive breakdown of the various tax relief votes in the Massachusetts Senate. Here’s their commentary on the estate tax/deathContinue reading “Estate Tax News – How Senators voted on tax relief”
- Estate Tax News – Post Labor Day Tax Relief UpdateAs summer comes to a close, the President of the Massachusetts Senate appeared on a local news program with comments about pending tax relief legislation,Continue reading “Estate Tax News – Post Labor Day Tax Relief Update”
- Estate Tax News – The Legislature should stop dithering on tax relief“Taxpayers have waited long enough” for tax reform, says the Boston Globe: A package that includes the best of the House’s efforts to address theContinue reading “Estate Tax News – The Legislature should stop dithering on tax relief”