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Death and Taxes in Massachusetts

Writing a will is considered to be one of the best ways to ensure that your assets are distributed to your loved ones, exactly as you intend, at the time of your death.

For most people, federal estate taxes aren’t an issue to be worried about, because only those with taxable gifts exceeding $5.25 million, for those who pass away in 2013, need to file a Federal Estate Tax Return, as provided by the IRS. However, some states impose an additional State Estate Tax, often for those who have $1 million or less to distribute upon death. According to, 16 states and the District of Columbia impose a tax on estates, and the terms and requirements vary greatly by state. Kiplinger recently released their “Top Ten States with the Scariest Death Taxes,” also referred to as the “least friendly places to die.”

Massachusetts ranked seventh among the states on Kiplinger’s list. The factors placing Massachusetts on the list include:

· A low level of exemption before the tax is applied, as only the first one million dollars of an estate is estate-tax-free.

· High estate tax rates, ranging from 5.6 percent, to 16 percent for estates worth more than 10 million dollars.

· Only spouses are exempt from the tax.

The state profile in the article indicated that there was no inheritance tax, which is applied in some states. Additionally, the article correctly states that there is “an unlimited charitable deduction for property left to a qualified charity.” This means that if your estate assets are left to a charity that is approved under the Tax Code, the payment of estate taxes on that amount can be avoided.


Tax clauses in wills, and what happens when there is no tax clause

When writing a will, one important component is a “tax clause.” A tax clause indicates where the money comes from to pay any estate taxes. Some wills provide, for example, that the estate assets shall be divided equally between the decedent’s children, and that the taxes should come out of each one’s share equally. Other wills provide a “residual clause,” which indicates that after the assets are distributed according to the will, all of the rest, or “residue” will go to a certain person. Sometimes, the residue is used to pay the taxes on the estate.

Where there is no tax clause in a will, the Massachusetts Apportionment Statute controls. It applies to both federal and state estate taxes, if any. In most cases the statute will result in the following:

  • Taxes attributable to property are paid from the residue of the estate.
  • Taxes on property held in certain kinds of trusts are to be paid from the trust itself.
  • Taxes attributable to any other property will be paid out of the proceeds from that property.

Additionally, the statute provides that a court can assist in the determination of how estate taxes should be apportioned, in accordance with the Massachusetts Apportionment Statute.

Estate taxes can be complicated. If you are planning for the distribution of your assets, or need assistance creating a will, contacting an experienced trusts and estates attorney can provide you with solutions that will ensure a more predictable future for you and your loved ones.

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