While many states don't have estate taxes, Massachusetts does. It's important to know how this will affect your heirs as you work with a professional on estate planning.
The federal estate tax exemption has gone way up. In 2018, it was over $11 million. Therefore, the federal estate tax isn't something many people have to worry about.
However, in Massachusetts, the state estate tax exemption is still set at $1 million as of 2018. If your estate is worth $1 million or more, it's likely the Commonwealth of Massachusetts will collect taxes on it before distributing assets to your beneficiaries.
The $1 million exemption includes everything in your estate, not just what's in your bank accounts at the time of your death. This includes the value of:
- Home and other properties
- Life insurance
- Investment accounts
So your net worth can add up to more than you might expect.
How Much Will You Be Taxed on Your Estate?
In 2018, the estate tax in Massachusetts ranged from 0.8 percent to 16 percent. However, this rate can be changed by law at any time. An experienced estate planning lawyer will estimate the current tax for you and suggest various techniques to help minimize the amount of estate tax and maximize the assets left for your beneficiaries. For example, two options might a life insurance trust or a credit shelter trust.
Please contact Monteforte Law, P.C. today by phone at 978-657-7437 to discuss the right strategy that may beneficial for securing a strong financial legacy.