Three facts about estate planning in Massachusetts that you should know
Estate planning in general means that you are engaging in financial planning focused on the laws of property, wills, and trusts. Here are three facts about Massachusetts law that you should know.
Estate Tax. Federal taxes levied against the deceased’s estate in Massachusetts are extremely high. The rate can be as steep as as 55%. Moreover, these taxes must be paid in cash. They must also generally be paid within nine months subsequent to the date of death.
However, preplanning your estate can lessen or even dismiss these taxes. Both the federal government and Massachusetts allow a certain amount—up to $1 million–to be tax free. The creation of an estate plan means that one can use allowed exemptions to reduce or eliminate large estate taxes, and protect one’s family from having to use cash and assets they have inherited to pay the tax.
Marital Deduction. Under the marital deduction, an estate in Massachusetts can usually pass tax free to the surviving husband or wife. It also applies to the federal estate tax. This deduction can help your survivors avoid some estate taxes.
Trust. A trust is a legal entity in which title to the property is vested in a trustee, but the benefits of ownership are enjoyed by another person–the beneficiary. It is created by a grantor. The trust stipulates that the trustee act for the benefit of the beneficiary. Trusts are found in two types: revocable (also known as living trusts), where the creator keeps the right to alter, amend or revoke trust, or irrevocable, which cannot be changed. These trusts are generally created at death.
An experienced estate attorney can help you plan for the well-being of your estate and your family. If you have questions regarding estate planning and protecting your assets, please contact our law office to schedule an appointment with an experienced estate planning attorney.