Many states in the country do not collect an estate tax. However, Massachusetts is one of the few states that does. Estate tax laws can seem confusing at first glance, especially if you are new to estate planning. If you are starting to plan your estate in Massachusetts, it is a good idea to start by speaking with an estate planning attorney.
Your attorney will stay up-to-date on the local laws when it comes to collecting estate taxes since these laws are often subject to frequent change. The following are some of the most frequently asked questions regarding estate taxes in Massachusetts.
Will my estate be subject to estate tax in Massachusetts?
The state of Massachusetts employs a staggered approach to taxing estates. This means that estates under the value of $40,000 will not pay any estate tax. However, any value above $40,000 will be taxed in ranges, each by a certain percentage.
If I leave my estate to my spouse, will it be taxed?
One of the best ways to successfully avoid estate taxes is to have the taxable portion of the estate transferred to the surviving spouse. As long as the surviving spouse is a U.S. citizen, the estate will not be subject to taxation.
What tax forms will I need to file?
You must firstly fill in a federal estate tax return, IRS Form 706. Then, you can go about filing the Massachusetts Estate Tax Return, Form M-706.
If you are concerned about the way your estate will be taxed, it is important to look into strategic estate planning options.