Estate tax planning is one of the most effective ways to protect the wealth you’ve built and ensure that your family or chosen beneficiaries receive the inheritance you intend for them. At Surprenant, Beneski & Nunes, P.C., we guide clients through both federal and state tax rules so they can reduce exposure to unnecessary taxes and preserve more of their legacy. Taking steps now allows you to take advantage of current tax laws and protect your estate from unnecessary expenses in the future.
Understanding Federal Estate and Gift Taxes
The federal government imposes taxes on certain transfers of wealth, both during a person’s lifetime and at death. In 2025, the federal estate, gift, and generation-skipping transfer (GST) tax exemption is $13.99 million per individual. This exemption is the amount you can transfer, during your lifetime or through your estate, without triggering federal estate or gift tax. Married couples can combine their exemptions, allowing them to shield nearly $28 million from federal estate taxes.
In addition, the annual gift tax exclusion is $19,000 per recipient in 2025. This means you can give up to that amount each year to as many people as you choose without reducing your lifetime exemption. For families who want to transfer wealth gradually, this can be a simple but effective tool.
Looking ahead, federal law now provides for a permanent increase in the exemption to $15 million per person starting in 2026, with future adjustments for inflation. While this offers more certainty than past tax regimes, it also underscores the importance of updating your plan regularly to take advantage of favorable provisions.
The Massachusetts Estate Tax
Even if your estate falls well below the federal threshold, Massachusetts applies its own estate tax that may affect you. The state exemption is $2 million per person, a number that is not indexed for inflation. This means that as property values rise, more estates become subject to the tax even if the family would not owe anything to the IRS.
For many Massachusetts families, the value of a home, retirement accounts, and life insurance is enough to cross the $2 million mark. Without planning, this can lead to an unexpected tax bill that reduces the inheritance left to loved ones.
Strategies to Reduce Estate Tax Exposure
There is no one-size-fits-all approach to estate tax planning. The right strategy depends on your assets, your family’s needs, and your charitable goals. That said, there are several well-established tools we often consider with our clients.
- Annual Gifting
Making annual gifts is a straightforward way to reduce your taxable estate. Over time, consistent giving can transfer significant value to the next generation without triggering estate or gift taxes. - Trust-Based Planning
Certain trusts can remove appreciating assets from your estate. Options such as qualified personal residence trusts (QPRTs), grantor retained annuity trusts (GRATs), or generation-skipping trusts can help reduce tax liability while ensuring assets are used as you intend. - Irrevocable Life Insurance Trusts (ILITs)
While life insurance proceeds are not subject to income tax, their value can be included in your taxable estate. Placing a policy in an ILIT allows the proceeds to pass outside your estate, and the trust can provide liquidity to cover taxes, debts, or ongoing support for family members. - Charitable Giving
Charitable remainder and charitable lead trusts allow you to support causes that matter to you while also lowering estate tax liability. For many, this creates a legacy of both family support and philanthropy. - Portability for Married Couples
At the federal level, the portability election allows a surviving spouse to use the unused exemption of the first spouse to die. This feature can significantly increase the amount passed tax-free and should always be considered as part of a comprehensive plan.
Why Planning Now Matters
Estate tax laws are complex and continue to change. While federal exemptions are generous, Massachusetts law still reaches many families whose estates are valued at only a few million dollars. Reviewing your plan now ensures that your documents align with current tax thresholds, that your beneficiary designations are up to date, and that opportunities to minimize taxes are not overlooked.
By addressing these issues before they become urgent, you can:
- Reduce or eliminate state and federal estate taxes
- Provide for your family with less financial stress
- Keep more of your assets in the hands of your chosen heirs
- Create clarity for those who will carry out your wishes
Contact Our Experienced Southeastern Massachusetts Estate Tax Planning Attorneys
At Surprenant, Beneski & Nunes, we take the time to understand your family, your assets, and your goals. We then design strategies that reflect both federal and Massachusetts law, coordinating with your financial and tax advisors when appropriate. Our goal is simple: to help you preserve what you’ve earned and protect those you love.
If you would like to review your current estate plan, contact our office today to schedule a consultation.