The Massachusetts estate tax, in plain terms
Who owes it, how the $2,000,000 threshold works, and why married couples plan differently in Massachusetts.
Two estate taxes, very different reach
The federal estate tax applies only to very large estates. The Massachusetts estate tax starts much lower, so it can matter for families who own a home, retirement savings, and life insurance.
The threshold
For people who die in 2023 or later, an estate of $2,000,000 or less owes no Massachusetts estate tax. Above that amount, tax is due, and a credit now applies so the tax no longer jumps suddenly at the threshold the way it did under the old rules.
What counts
The estate generally includes everything you own at death: your home, investments, retirement accounts, and life insurance you own, even though some of those pass outside probate.
Married couples
Property passing to a surviving spouse is generally not taxed at the first death. But Massachusetts has no portability, so the first spouse's $2,000,000 exemption is lost unless the plan uses it. A credit shelter trust, sometimes called a family trust, is a common way to preserve it for the family.
Common questions
Does Massachusetts have a gift tax?
No, but lifetime gifts can still affect estate tax calculations, so large gifts are worth discussing first.
Do retirement accounts count?
Yes. They are part of the taxable estate even though they pass by beneficiary designation.
Check your understanding
Three quick questions. Nothing is saved or sent.
1For deaths in 2023 and later, the Massachusetts estate tax applies to estates above:
Estates of $2,000,000 or less owe no Massachusetts estate tax.
2Can a surviving spouse in Massachusetts use the first spouse's unused exemption?
Massachusetts has no portability, so the plan has to use the first exemption.
3What tool is commonly used to preserve both spouses' exemptions?
A credit shelter trust holds the first spouse's share so it is not taxed again at the second death.
Official sources
Keep learning
Everything here is general education about Massachusetts law, written by WisePath Estate Planning. It is not legal advice for your situation, and reading it does not make you our client.