Finally! Massachusetts Residents Receive Some Good News About Estate Taxes

On October 4, 2023, Governor Maura Healey signed legislation that will modify a wide range of tax laws impacting Massachusetts individuals and families.  Changes include a doubling of the Massachusetts estate tax exemption, from $1 million per estate to $2 million per estate.
In addition, the new law alters how Massachusetts estate tax will be levied on estates valued above the exemption amount.  In the past, almost all assets were taxed if the value of the decedent’s taxable estate exceeded $1 million; now, only assets in excess of $2 million will be subject to estate tax.  These changes are retroactive, that is, they apply to the estates of individuals who passed away on or after January 1, 2023.
The estate tax will continue to be calculated on a graduated scale, with rates ranging from 7.2% to 16%.
It is worth noting that Massachusetts is one of only 12 states (plus the District of Columbia) with its own estate tax.  Even with the increased $2 million threshold, the Commonwealth’s exemption is among the lowest in the nation.  Nevertheless, the new law is great news for Massachusetts residents.
Now, some of you might be thinking, “All well and good, but I’m not a millionaire, I don’t have to worry about estate taxes.”  However, given recent developments in the real estate market, your taxable estate may be considerably larger than you think.  For example, according to Boston Magazine, the median sale price for a single-family home in Norwell was $873,000 in 2022.  Prices (and values) continue to rise dramatically across the Commonwealth.  Since the total value of one’s taxable estate includes the value of one’s home, doubling the estate tax threshold is welcome news.  It will help create generational wealth and simplify estate planning for many families.
As always, I’m here to answer any questions and work closely with you to meet your estate planning goals.
Until next time, take care…