A nice day today, eh?
We Massachusetts residents face a MA estate tax. Our state is one of 15 that continues to have this type of taxation.
This tax is different and more complicated than the income tax. It is a tax on the value of property we own or control at death.
Federal estate tax has been in place since 1916. Before that, it came into use from time to time to raise funds for war.
The tax is calculated on the assets we control at death.
To illustrate: You're on your deathbed. You legally can direct where assets or accounts will go. It's deemed a pleasure. One worthy of taxation. Some people call it the 'death tax.'
Only some people pay this tax. Many die with assets below the MA exemption from this tax of $1 million. The Federal exemption is $11.58 million.
Important non-taxable distributions
Your estate does not pay estate tax on distributions that go to a spouse or charity.
What goes to your spouse will end up in their estate. Unless they spend it first. When added to your spouse's assets, the amount will face estate tax later.
This delay for a married person does not apply if you die married to a non-US citizen.
Instead, you should put a special provision into your estate planning documents. To cut estate tax on your death. It's called a QDOT provision.
I'm Joel Bernstein, an estate planning attorney with over 30 years of experience. I use plain English to help you understand wills, trusts, and the other documents you need to protect your loved ones and your estate.
Most middle-aged people aren’t ready for their inevitable death. We make estate planning simple, affordable, and quick. So people can live in peace, knowing their affairs are in order.
"Let me outline in general the process we follow to avoid making inadvertent errors to your existing estate planning: