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Woburn Estate Tax Attorney

The estate tax is a tax imposed when someone passes away prior to property being transferred to their heirs. To establish whether you owe an estate tax, the government will look at the fair market value of everything you own at time of death, including cash, securities, real estate, business interests, trusts, annuities, life insurance proceeds, 401(k)s, and other assets. 

As of October 4, 2023, the Massachusetts estate tax exemption increased from $1 million to $2 million for people dying on or after January 1, 2023. That means that typically when a person dies owning $2 million or less in assets, they pay no estate tax. However, if it’s valued over $2 million, the estate is taxed on the amount over the $2 million. The Massachusetts estate tax is a progressive rate of 7.2% to 16%. The top bracket applies to taxable estates of $11 million and over.

There’s also a Federal estate tax. In 2024, the Federal estate tax exemption is imposed only on estates valued over $13.61 million, while married couples can have over $27.22 million. The tax rate for this bracket is 40%.

While the federal estate tax exemption amount increases each year due to inflation, it jumped considerably in 2018, from $5.49 million to $11.8 million. The bad news for heirs of wealthy estates is that the considerable increase from six years ago is only temporary. The base estate tax exemption amount is set to drop back down to $5 million (adjusted for inflation) in 2026.

While most Americans aren’t subject to the federal estate tax, when Massachusetts residents add up all their assets many find that they are over the $2 million threshold due to high real estate values. Life insurance is also included in an estate’s value, even though it pays out to another person. However, because each individual has a $2M Massachusetts estate tax exemption, reducing or eliminating estate tax exposure is entirely possible for individuals and couples with effective estate plans.

A knowledgeable and experienced estate-planning attorney can help you to do just that. 

Middlesex County Estate and Tax Planning Attorney

At The Heritage Law Center, our qualified estate planning attorney can help you plan for the future. Matthew Karr, Esq., provides comprehensive estate planning services for those in Middlesex County and all of eastern Massachusetts. He understands the laws surrounding estate planning, taxes, and trusts and can help you create a strategy that works best for you and your loved ones. 

Methods for Minimizing Estate Taxes

There are different ways to minimize your estate tax liabilities.

Credit Shelter Trusts

A surviving spouse receives an unlimited marital deduction, so there are typically no estate taxes due when the first spouse passes away. However, taxes are imposed on the total value of assets once the surviving spouse passes. A credit shelter trust or AB trust can shelter assets from taxation when the surviving spouse dies. The surviving spouse can access trust assets to meet their needs throughout their lifetime, but the assets in the trust won’t be a part of the surviving spouse’s estate upon death, so they won’t be taxed. This allows sheltering of up to $1M in assets from estate tax.

Tax-Free Annual Gifting 

In 2024, you can give up to $18,000 a year to anyone you choose without having to report the gift or incur taxes on it. Gifting is a popular means of giving money to your heirs to reduce the size of your estate and reduce or avoid estate taxes. Be careful about giving stock or real estate away during your lifetime because those transfers can trigger capital gains taxes.

Charitable Trust

Another method of minimizing estate tax is a charitable trust, which leverages annual gifts and charitable donations. A charitable remainder trust is one in which you can transfer your property and gift someone income for a period of time before the remainder goes to a charitable organization.  

Qualified Personal Residence Trust 

Since the home is commonly the largest asset in a person’s estate, another method for decreasing (or avoiding) the estate tax is a qualified personal residence trust. As the owner of the home, you can transfer the home title to this trust for your beneficiaries, while you can still reside in the home for a set period of time. The other good news is that whatever the amount of the house’s appreciated value between the transfer of the title to the trust and it passing to your beneficiaries after you pass away isn’t subject to estate taxes. However, if you pass away prior to the end of the specified period of time, the house’s full value (with appreciation) will be part of the net amount of your estate. 

Grantor Retained Annuity Trust (GRAT) / Grantor Retained Unitrust (GRUT)

Other trusts that can help to minimize or avoid the estate tax are a granted retained annuity trust and a grantor retained unitrust. These two trusts allow for the transfer of assets that produce income, such as stocks. These assets will remain in the trusts for a period of time. Over the course of this period the trust either pays you income in a fixed amount each year (GRAT) or a percentage of the value of the trust’s assets, which can differ annually (GRUT). After the period of time is up, the trust’s asset and any of their appreciated value will transfer to the beneficiaries. This is helpful in that after these transfers, the value of your taxable estate will decrease. However, once again, if you should pass away prior to the end of this period of time, a portion or all of your assets will be part of your taxable estate. 

Irrevocable Life Insurance Trust 

Life insurance is a good idea for many reasons, however, the value of the life insurance policy will be included in the taxable value of the estate. Because of this, beneficiaries of the life insurance policy may face a reduction in their proceeds due to estate taxes. The good news is that an irrevocable life insurance trust can own the policy, which will keep the proceeds out of the taxable estate. More good news: the proceeds can be used to pay any estate taxes, often at a discount, in addition to outstanding debts and final expenses. They can also be given to a close surviving relative as a means of financial support.  

Generation-Skipping Trusts (GSTs) 

A generation-skipping trust (GST) does just as it sounds: it allows for your assets to skip a generation, usually passing to grandchildren or great-grandchildren. If you have a correctly designed GST, you can use the current exclusion amount when preparing for future appreciation of the trust’s assets to pass to the beneficiaries.

GSTs may be a good idea for high-net worth individuals if the current exclusion amount is high. 

Charitable Giving

When you give a charitable donation, either money or property, your taxable estate is reduced by that amount. There’s no annual limit to the amount you can give to charity, and the donation can be used as a taxable deduction. 

Free Estate Planning Reports

You can find more information about estate planning in our free reports: Estate Planning Essentials Report and Massachusetts Estate Planning: Saving on Taxes Report.

Contact Our Massachusetts Estate Tax Attorney

Our knowledgeable estate tax attorney can help you navigate the complexities of Massachusetts’s estate tax laws with ease. Contact our dedicated team today at The Heritage Law Center. We’ll help you understand how the estate tax will impact your estate and your loved ones’ future.

Woburn Asset Protection Attorney

At The Heritage Law Center located in eastern Massachusetts, we know how much work you’ve put in to accumulate the assets that make your family secure, and how eager you are to protect both your nest egg and those you love. While you doubtlessly want to build on that foundation and increase your financial well-being, our estate planning team understands that you need the peace of mind that comes from knowing your assets are protected now and in the future.

As a savvy asset protection attorney, Matthew Karr, Esq., will use legal techniques to help preserve your wealth and safeguard your assets. His years of experience in the field of estate planning have provided him the in-depth knowledge and well-honed skills to strategize a comprehensive plan to protect your assets from excessive taxation, creditors, and a variety of other dangers. It’s important to be proactive about protecting your assets since the economy is unpredictable. By working with us, you’ll feel the relief of knowing your assets and your family are financially safe.

What Is Asset Protection and What Are We Protecting Your Assets From?

Even seemingly well-protected assets—in strong boxes, carefully chosen investments, insured collections, stable bank accounts—while definitely safer than money stuffed in mattresses, may be at risk from a number of hazards, such as:

  • Excessive taxation
  • Unpaid debts
  • Predatory lenders
  • Scams or fraudulent schemes
  • Long-term medical and nursing care costs
  • Expensive probate 

There’s no shortcut to asset protection, and this isn’t a do-it-yourself project. The process requires professional legal assistance by a knowledgeable asset protection lawyer like our own Matthew Karr, Esq. Matthew is savvy about how best to insulate your hard-earned assets from forces that seek to diminish your estate and weaken your legacy. He’s successfully helped many clients safeguard their assets by using estate planning tools and techniques.

Our Comprehensive Legal Knowledge Regarding Asset Protection

At The Heritage Law Center, our law firm prides itself on having keen insight as well as comprehensive knowledge of state and federal law. You can rest assured that the information we share with you is completely current and that we know how to protect assets. Also, we’ll debunk the misconceptions that abound in this area of estate planning and its related legal issues. You should always consult with us before you give a gift to a friend or put property in the name of your corporation in order to avoid taxation or a large debt. In fact, even an inherited IRA may be fair game for creditors.

The Unpredictability of Life Requires Asset Protection

You may feel confident that you’re too fit to need nursing care in the foreseeable future, too sharp to be taken in by a fraudster, and too friendly and flexible to be involved in a lawsuit. However, the unpredictable does occur and can become reality in the blink of an eye.

Long-Term Medical or Nursing Care Can Quickly Deplete Assets

You’ve likely heard about people suffering catastrophic injuries while riding home from the drug store, or falling victim to heart attacks while having a quiet dinner with friends. A spinal cord injury, a stroke, multiple fractures—any one of these can suddenly alter your life and use up your savings. Also, unless you have properly prepared, your assets may prevent you from being eligible for government benefits. If you or your loved one needs long-term care in the future, it’s important to plan now for MassHealth eligibility so you can get the services you need without losing your life savings.

Scams and Schemes Can Rob You of Assets

Similarly, you likely know or have read about someone intelligent who was fleeced out of a large sum of money by a scam artist or con man. Successful con artists can skillfully overcome an intelligent person’s defenses and get that person into an emotional state that overrides logical thinking. Don’t be so sure that you wouldn’t succumb to doubt and fear during a 3 a.m. phone call if someone claiming to be a police officer says your grandson is in jail.

Lawsuits Galore

In our extremely litigious country, it’s also unwise to bet on the fact that you’ll never be sued for an enormous amount of money by another driver, a neighbor, an employee, or a business competitor. If you’re a professional, you may well be sued by a student, a patient, a legal or financial client, or even an assistant. Every day, individuals’ life savings are put in jeopardy by lawsuits claiming:

  • Malpractice liability
  • Premises liability
  • Personal injury
  • Sexual harassment
  • Fraudulent claims not easily disproven
  • Domestic violence

The legal system can be imperfect, so it’s essential to protect your assets from lawsuit verdicts that demand a large, unfair settlement.

What Our Asset Protection Attorney Can Do

As an accomplished asset protection attorney, Matthew Karr, Esq., can use a large number of preventive measures to keep your wealth, property, and possessions secure. We recognize that you come to us with a unique set of circumstances, so we make sure our asset protection strategies serve your particular needs. We’re also sensitive to your privacy, realizing that we’re being trusted with personal information about your funds and your family.

Free Estate Planning Reports

You can find more information about estate planning and how to protect assets in our free reports: Estate Planning Essentials Report and Massachusetts Estate Planning: Saving on Taxes Report.

Contact Our Woburn Asset Protection Attorney

Don’t procrastinate when it comes to asset protection and keeping your estate intact. Not only will getting in touch with us give you a sense of security; it will ensure that those who depend on you can look forward to a brighter future. Contact our law firm now for a consultation.