Westborough MA Estate Tax Planning Attorney

MA estate tax planning

Estate tax planning is one of the most common motivations for estate planning.

Without careful planning, much of your life’s legacy could be lost to estate taxes.

While a simple Will can provide for the transfer of your estate to your loved ones, it does not contain special provisions for state and federal estate tax planning.

People in Westborough, MA as well as the surrounding Worcester County communities who are concerned about estate taxes rely on the Socius Law Firm to provide them with foundational trust-based estate planning that can minimize – if not 100% eliminate – estate taxes.

Massachusetts Estate Tax Planning:  How Socius Can Help

In 2017, if you are a Massachusetts resident that passes with an estate of $1.0 million or more, your estate will owe an estate tax to the Commonwealth of Massachusetts.

Given the high value of real estate in Massachusetts, as well as common life insurance policies and retirement assets, your estate can quickly add up to $1.0 million or more.

For example, a married couple with total assets of $1.5 million may have simple, or “I love you” Wills that leave all assets to the survivor with ultimate distribution to their children. This type of estate plan has the advantage of simplicity; however, it does not take advantage of planning opportunities to minimize or otherwise eliminate Massachusetts Estate Taxes.

With Socius’ foundational trust-based estate planning and other more advanced planning strategies, this same married couple (with a combined estate of $1.5 million), can effectively eliminate all liability for the Massachusetts Estate Tax in 2017.

You can learn more about Massachusetts Estate Taxes by visiting the Massachusetts Department of Revenue website.

Calculating MA Estate Taxes

If you have an estate that exceeds $1.0 million, the MA Estate Tax is equal to the amount of the Maximum Credit for State Death Taxes. The Maximum Credit for State Death Taxes is computed using the following table:

Table to Calculate MA Estate Taxes
Adjusted Gross Estate* FromToCredit+% ofExcess Over
Adjusted Gross Estate* FromToCredit+% ofExcess Over
$0$40,000$00.0$0
40,00090,00000.840,000
90,000140,0004001.690,000
140,000240,0001,2002.4140,000
240,000440,0003,6003.2240,000
440,000640,00010,0004.0440,000
640,000840,00018,0004.8640,000
840,0001,040,00027,6005.6840,000
1,040,0001,540,00038,8006.41,040,000
1,540,0002,040,00070,8007.21,540,000
2,040,0002,540,000106,8008.02,040,000
2,540,0003,040,000146,8008.82,540,000
3,040,0003,540,000190,8009.62,540,000
3,540,0004,040,000238,80010.43,540,000
4,040,0005,040,000290,80011.24,040,000
5,040,0006,040,000402,80012.05,040,000
6,040,0007,040,000522,80012.86,040,000
7,040,0008,040,000650,80013.67,040,000
8,040,0009,040,000786,80014.48,040,000
9,040,00010,040,000930,80015.29,040,000
10,040,000----1,082,80016.010,040,000

*The “Adjusted Taxable Estate” used in determining the allowable credit for state death taxes in the above table is the federal taxable estate (total federal gross estate minus allowable federal deductions) less $60,000.

Example:

Assume a decedent dies in 2017 with a gross estate of $1.5 million. The decedent had not made any gifts during his lifetime and did not own any property outside of Massachusetts.

Using the above table, Maximum Credit for State Death Taxes is $64,400.00. The computation is as follows:

1.  The adjusted taxable estate is $1,440,000 ($1,500,000 – $60,000).

2.  An adjusted taxable estate of $1,440,000 is within the range of the numbers on the ninth line (from table): $1,040,000 to $1,540,000.

3.  The credit on the first $1,040,000 is $38,800.

4.  The credit on any amount in excess of $1,040,000 and up to $1,540,000 is computed at the rate of 6.4 percent.

5.  In this example, $400,000 is in excess of $1,040,000 ($1,440,000 less $1,040,000).

6.  The credit on $400,000 is $25,600 ($400,000 × .064).

7.  The Maximum Credit for State Death Taxes is $64,400 ($38,800 plus $25,600).

Federal Estate Tax Planning

In consideration of federal estate taxes, for 2017, an individual is allowed an exemption from Federal Estate Tax in the amount of $5.49 million while a married couple is allowed $10.98 million. The tax rate for estates exceeding the exemption amount is 40%.  Given these high federal applicable exclusion amounts, the Federal Estate Tax is often not a concern for many people.   Visit our Federal Estate Tax Planning page for more information on the Federal Estate Taxes and how Socius assists high net worth clients with federal estate tax planning.

Learn More About Socius’ Westborough MA Estate Tax Planning Attorney Services

With questions regarding MA Estate Tax Planning, we encourage you to contact us or call us at our Westborough, MA office at 508-870-5759. The Socius Law Firm represents individuals and families throughout Central Massachusetts and Worcester County including the communities of Westborough, Southborough, Northborough, Hopkinton, Grafton, Shrewsbury, Upton, Marlborough and Framingham.