Estate tax requirements apply at both the federal and Massachusetts level, depending on the size of your estate. While federal estate tax affects higher-value estates, Massachusetts imposes its own tax at a much lower $2 million threshold. If your estate may exceed $2 million, state estate tax is often a concern even when no federal tax applies. At Surprenant, Beneski & Nunes, P.C., we help individuals and families across Southeastern Massachusetts understand their exposure under both systems and build plans that protect more of what they have accumulated.
Why Choose Surprenant, Beneski & Nunes
We help clients take a coordinated approach to estate tax planning, with strategies designed to work under both federal and Massachusetts law. We offer:
- More than 60 years of experience serving families in Southeastern Massachusetts
- Certified Elder Law Attorneys (CELA), a distinction held by a limited number of attorneys in Massachusetts
- Planning strategies tailored to both federal and Massachusetts estate tax rules
- A coordinated approach that considers real estate, investments, retirement accounts, and business interests
- Ongoing guidance as tax laws and personal circumstances change
When Does Federal Estate Tax Apply?
Federal estate tax applies to estates that exceed the federal exemption amount, which remains historically high. As of 2026, the exemption is $15 million per person, or $30 million for a married couple when portability is properly elected. As a result, most Massachusetts families will not owe federal estate tax. However, estates with significant real estate holdings, business interests, or investment portfolios may still exceed the threshold and require careful planning.
If your estate exceeds the federal threshold:
- A federal estate tax return may be required
- Tax applies to the value above the exemption
- Without planning in place ahead of time, there are fewer opportunities to reduce estate tax
For married couples, federal law allows portability. This means a surviving spouse may use any unused exemption from the first spouse, but only if a timely return is filed. This can significantly increase the amount passed free of federal estate tax.
How Does Massachusetts Estate Tax Work?
Massachusetts imposes a separate estate tax with a $2 million threshold. Estates above that amount may owe tax on the value exceeding the exemption, using a graduated rate structure.
This creates a common planning gap between federal and state exposure. An estate may fall below the federal threshold but still owe Massachusetts estate tax.
For example, a married couple with a $10 million estate may owe no federal estate tax under current law but could still face a significant Massachusetts estate tax obligation.
Unlike federal law, Massachusetts does not allow portability between spouses. Without planning, one spouse’s exemption may be lost.
What Assets Are Included in Your Taxable Estate?
Both federal and Massachusetts calculations include a broad range of assets, not just those that go through probate.
Your taxable estate may include:
- Real estate, including your home and vacation property
- Bank and brokerage accounts
- Retirement accounts such as IRAs and 401(k)s
- Life insurance proceeds if you retain ownership rights
- Business interests and closely held entities
- Certain trusts and lifetime transfers
The way assets are titled and controlled can affect whether they are included in your estate.
When Are Estate Tax Returns Required?
Estate tax filing requirements depend on which thresholds apply.
You may need to file:
- A federal estate tax return if the estate exceeds the federal exemption or if portability is being elected
- A Massachusetts estate tax return if the estate exceeds $2 million
Both returns are generally due within nine months of the date of death, although extensions may be available. Filing on time helps avoid penalties and delays in estate administration.
How Can You Reduce Estate Tax Exposure?
Planning ahead can reduce or eliminate estate tax liability at both the federal and state levels. The right approach depends on your assets, family structure, and goals.
These strategies are often used in combination to reduce exposure under both systems.
- Credit shelter trusts to preserve each spouse’s Massachusetts exemption
- Irrevocable life insurance trusts (ILITs) to keep life insurance proceeds outside the taxable estate
- Spousal lifetime access trusts (SLATs) to transfer assets while maintaining indirect access
- Lifetime gifting, including annual exclusion gifts, to gradually reduce the size of your estate
- Charitable planning to reduce taxable value while supporting causes you care about
Each strategy should be evaluated carefully to ensure it works under both federal and Massachusetts rules.
What Happens If You Do Not Plan Ahead?
Without estate tax planning, estates can face avoidable tax exposure that reduces what ultimately passes to your beneficiaries.
This can lead to:
- A larger portion of your estate going toward taxes
- Reduced distributions to beneficiaries
- Delays in settling the estate
- Missed opportunities to use available exemptions
Planning gives you more control over how your assets are transferred and how taxes are managed.
Build a Plan That Accounts for Federal and State Estate Tax
Estate tax planning works best when it is part of a broader strategy. We work with you to evaluate your exposure under both federal and Massachusetts law and design a plan that reflects your priorities.
If you want to understand your estate tax exposure or update your current plan, contact Surprenant, Beneski & Nunes, P.C. to schedule a consultation. We will help you put a structure in place that supports your long-term goals and protects what you have built.
Frequently Asked Questions About Estate Tax Requirements
Does Massachusetts have an inheritance tax?
No. Massachusetts imposes an estate tax, which is paid by the estate before assets are distributed. Beneficiaries do not pay a separate inheritance tax.
Can I avoid Massachusetts estate tax by moving to another state?
Changing your legal residence may reduce exposure for certain assets, but Massachusetts real estate remains subject to state estate tax.
Are life insurance proceeds included in my estate?
They may be. If you own the policy at the time of death, the full death benefit is typically included in your taxable estate.
How often should I review my estate plan for tax purposes?
A review every one to two years is a reasonable baseline, and sooner after major life or financial changes.