Important COVID-19 Update: We offer consultations via phone, video, or in-person. Here’s information about our process during this time.

Calculate Your Massachusetts Estate Tax

As a Massachusetts resident, you may be concerned about how much an estate tax can hurt the value of your estate. After all, you’ve worked hard for your money and want to leave as much as you can to your loved ones.

As of October 4, 2023, the Massachusetts estate tax exemption increased from $1M (million) to $2M for people dying on or after January 1, 2023. When you die, if your estate is valued at $2M or under, your estate pays no estate tax. If it’s valued at one dollar over $2M, your estate is taxed on the amount over the $2M. The Massachusetts estate tax is a progressive rate of 7.2% to 16%.

The estate tax is applied to certain estates after a person has died before those assets are dispersed amongst their beneficiaries. It applies to the gross estate value (the total dollar value of a person’s assets at the time of death), plus adjusted taxable gifts, that exceed the $2M threshold. Massachusetts has its own set of tax laws, so it’s helpful to connect with a lawyer. Matthew Karr, Esq., knows Massachusetts law and can help you understand what to expect from the Massachusetts estate tax. 

In addition to the grief and emotions of having a loved one pass, the stress of inheriting an estate and going through the process of determining what is owed in estate taxes can be overwhelming. The Heritage Law Center is here to help you determine what you may owe and how you can plan in advance to reduce or avoid these taxes.

How to Determine an Estate’s Taxable Value

With the cost of property rising in the past years, it’s not difficult for estates to exceed the threshold set forth by Massachusetts. Property alone is not all that goes into calculating the value of a Massachusetts estate. The gross estate needs to be considered and includes all property held by the decedent. It may include:

  • Annuities
  • Life insurance proceeds
  • Business interests
  • Retirement accounts 
  • Vehicles
  • Stocks and bonds
  • Bank accounts
  • Equity in real estate
  • Personal property

Massachusetts estate tax returns are a requirement if the gross amount of the estate, plus taxable gifts, exceeds one million dollars per the Internal Revenue Code. That can be a big responsibility to calculate for a grieving loved one. Connecting with an estate lawyer will ease your mind and ensure all the tax requirements are met. 

How to Reduce Estate Tax 

In Massachusetts, the estate tax is applied to the entire value of the estate, not just the amount that exceeds the exemption threshold. By planning ahead, you may be able to lower the tax burden on your estate to reduce the chance estate taxes will be owed when you’re gone. 

Having an estate plan in place early is the best strategy to ensure that when you leave your assets to your loved ones, there are no surprises for them. There are many plans of action such as creating trusts, gifting, and charitable donations that can protect your assets and decrease the need for additional taxes to be owed upon your death.  

Connect with a Lawyer on Estate Taxes

If you have found yourself responsible for the estate of a loved one where the value exceeds the Massachusetts tax exemption of one million dollars, you’re required to pay taxes to the state. Determining what assets qualify to be accounted for in this total may be complex. Our lawyer, Matthew Karr, understands this is an emotional undertaking and is here to guide you through the process. 

If you’re interested in estate planning and what the estate tax impact would be on the assets you’re trying to leave to your heirs, we’re here to discuss all of your options. We understand the tools available for asset protection and we can help you safeguard your assets so you can leave as much as possible to your family.

When you’re ready to speak with us, seek out a consultation. Connect with Matthew Karr, Esq., at The Heritage Law Center today by calling 617-299-6976 or completing the online form below.