Planning for the future means thinking about what you’ll leave behind—not just for your loved ones but also for the IRS. Estate taxes can take a significant portion of your assets if you don’t prepare. Fortunately, there are time-tested ways to reduce or even avoid estate taxes entirely. At Surprenant, Beneski & Nunes, P.C., we help families throughout Massachusetts make smart choices that protect their wealth and ensure more of it stays where it belongs—with the next generation.
Understanding the Estate Tax Thresholds
Before you make any decisions, it helps to know what you’re up against. The federal estate tax exemption in 2025 is $13.99 million per individual. That means many families won’t owe anything at the federal level—for now. However, this higher exemption is scheduled to drop in 2026 unless Congress takes action.
In Massachusetts, the rules are different. The state estate tax kicks in once your estate exceeds $2 million, and the exemption isn’t portable between spouses. Even middle-class families who’ve built up equity in a home and saved in retirement accounts can find themselves over the limit.
Gifting Strategies to Reduce Your Taxable Estate
Giving assets away during your lifetime can lower the value of your taxable estate while allowing you to see the impact of your generosity. The IRS allows you to give up to $19,000 per year (as of 2025) to as many individuals as you want without triggering gift taxes.
Here are some additional ways to give wisely:
- Pay medical bills or tuition directly to institutions—these don’t count as gifts.
- Consider making large lifetime gifts that apply against your federal exemption while it remains high.
- Create a long-term gifting plan to reduce your estate steadily over time.
We’ll help you weigh the benefits and timing of each approach so your gifts reflect both your values and your financial goals.
Using Trusts to Shift or Shelter Assets
Trusts are a reliable way to remove assets from your taxable estate while still keeping some control or setting terms for how those assets are used. Different types of trusts serve different purposes.
Some common tools include:
- Irrevocable Life Insurance Trusts (ILITs): These hold life insurance policies outside your estate, so the payout isn’t taxed when you pass away.
- Grantor Retained Annuity Trusts (GRATs): These allow you to pass appreciating assets to heirs while retaining an income stream for a set period.
- Qualified Personal Residence Trusts (QPRTs): These can help you transfer a home to your children while reducing its value for tax purposes.
- Charitable Remainder Trusts (CRTs): These support your charitable goals and can provide income and tax benefits.
We’ll walk you through the options and build a trust structure that suits your needs, timeline, and legacy goals.
Positioning Assets for Tax Efficiency
The way your assets are owned and managed can impact your estate’s tax burden. For example, assets that are likely to appreciate—such as stocks or business interests—can be transferred now so future growth happens outside your estate.
A few strategies to consider:
- Change how certain assets are titled (such as placing them in a trust).
- Shift ownership of appreciating assets to family members.
- Coordinate your estate plan with beneficiary designations on retirement accounts and insurance policies.
These moves can reduce both estate and income taxes. We’ll help you review your asset mix and adjust where needed.
Plan Ahead with Confidence
Estate tax planning isn’t something you want to leave until the last minute. The sooner you start, the more options you’ll have. Laws change, values grow, and family circumstances shift over time. That’s why it’s wise to revisit your plan regularly and adjust as needed.
At Surprenant, Beneski & Nunes, P.C., we’ll work closely with you to develop a clear, forward-looking plan. Our goal is simple: to protect your legacy and help your loved ones receive the full benefit of everything you’ve built. Contact us today to schedule a consultation and take the first step toward a tax-efficient estate plan.