Community Corner
How Changes in Massachusetts Tax Laws Could Impact Your Estate
A practical guide to navigating Massachusetts' updated estate tax landscape
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Massachusetts raised its estate tax threshold in 2023, but that doesn’t mean most families can ignore estate planning. Home values, retirement accounts, and life insurance can push an estate close to the line faster than people expect. Add possible federal changes on the horizon, and the rules you counted on a few years ago may not match today’s reality.
This article is for anyone trying to make sense of shifting tax rules—not only high‑net‑worth households. By the end, you’ll understand what the estate tax is, what changed in Massachusetts, what may change federally, and practical ways to adjust your plan so your assets go where you intend.
Our perspective is grounded in day‑to‑day planning for Massachusetts families and close tracking of state guidance. The goal is simple: help you spot issues early and plan with confidence before tax changes create surprises for your beneficiaries.
What is Estate Tax?
The estate tax is a transfer tax on the value of what you own when you pass away. Think of it as a final accounting: add up your assets, such as real estate, bank and investment accounts, retirement funds, business interests, and life insurance, then subtract allowable debts and deductions. The result is your taxable estate.
There are both federal and state estate taxes. Each system has an exemption, which is the amount of your estate that can pass tax-free. If your taxable estate is below the exemption, no estate tax is owed. Federal exemptions are generally much higher than state exemptions. Unlike state exemptions, federal rules also allow portability, meaning a surviving spouse can use any unused portion of their deceased spouse’s federal exemption.
Because the two systems are separate, an estate can potentially trigger both federal and state taxes, depending on the value and composition of the assets.
Massachusetts Tax Law Changes That Could Affect Your Estate
Massachusetts updated its estate tax law in 2023, and the changes are significant for many estates. The law effectively doubled the estate tax exemption from $1 million to $2 million, meaning estates at or below $2 million are not subject to Massachusetts estate tax. This change also affected how the tax itself is calculated. Previously, an estate was taxed based on its entire value once it exceeded the threshold. Under the current law, only the portion of the estate that exceeds $2 million is taxed.
In 2024, the treatment of real or tangible property located outside Massachusetts was also clarified. Out-of-state property is excluded from the estate tax calculation, so only property located in Massachusetts is counted for tax purposes.
In short, these changes mean that if your estate is under $2 million, Massachusetts estate tax generally does not apply, and estates above $2 million owe less tax than they would have under the previous law.
The Value of Planning Ahead
The 2023 and 2024 changes to the Massachusetts estate tax are generally beneficial for families, but there are still complexities to consider. Even estates that seem straightforward can have surprises, and understanding your true tax exposure isn’t always obvious. Speaking with an experienced estate tax attorney can help clarify whether your estate may be subject to state or federal taxes and explore strategies to manage or reduce potential liability.
These strategies often involve tools such as wills to direct assets, trusts to manage incapacity or protect larger estates, lifetime gifting to reduce taxable value, or charitable giving to achieve family and philanthropic goals. The right approach depends on your circumstances, assets, and long-term objectives.
An attorney can ensure these strategies are aligned, implemented correctly, and updated as laws or personal circumstances change, giving you confidence that your estate plan works effectively and provides clarity for your heirs.
Don’t Let Tax Changes Catch Your Estate Off Guard
Massachusetts now shields estates up to $2 million, but planning still matters for any estate. Reviewing your assets, ownership structures, and overall estate plan helps ensure your property passes to your heirs as intended and that tax exposure is managed effectively. Small adjustments can make a meaningful difference. Working with a Massachusetts estate planning attorney ensures your plan stays aligned with current law and your family’s goals.
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