Massachusetts Estate Tax Changes

On October 4th, 2023, Governor Maura Healy signed into law Bill H. 4104, a $951 million tax package containing various tax changes affecting businesses and individuals. Read on for everything residents need to know about these important Massachusetts estate tax changes for 2024.


Understanding the New Law


Effective January 1, 2023, Massachusetts residents witnessed a pivotal alteration in the estate tax exemption. Formerly set at $1 million, the exemption has now doubled to $2 million. This means that estates valued at $2 million or less are exempt from estate taxes. Importantly, if your estate surpasses this threshold by even a dollar, only the amount exceeding $2 million is subject to taxation. This progressive tax ranges from 7.2% to 16%, with the highest bracket applicable to taxable estates exceeding $11 million.



Elimination of the Estate Tax Cliff


Gone are the days of the dreaded “estate tax cliff.” Previously, estates exceeding $1 million faced taxation on the entire value, leading to significant financial burdens. However, the new legislation eradicates this cliff, ensuring that only assets exceeding $2 million are subject to taxation.


Retroactive Changes and Potential Refunds


It’s essential to recognize that these changes are retroactive, impacting the estates of individuals who passed away on or after January 1, 2023. If you’ve already filed an estate tax return or paid taxes based on the previous exemption, you may be eligible for a refund. Consult your estate planning advisor to explore this possibility.


“Use it or Lose it” Exemption:


Unlike the federal estate tax exemption, which adjusts annually for inflation, Massachusetts’ $2 million exemption remains static. This means that unless the law undergoes further amendments, the exemption will remain unchanged. Additionally, unlike its federal counterpart, the Massachusetts exemption isn’t portable between spouses, emphasizing the importance of strategic estate planning.


Impacts on Residents and Non-Residents


Residents and non-residents alike must understand the implications of these Massachusetts estate tax changes for 2024. For residents, owning assets outside the state can affect estate tax obligations. Conversely, non-residents with property in Massachusetts face taxation proportional to the value of their assets within the state.


Given the magnitude of these estate tax reforms, it’s prudent for individuals to review their existing estate plans or establish new ones to optimize the benefits afforded by the new legislation. Whether you’re seeking to minimize tax exposure or ensure seamless asset distribution, proactive estate planning is paramount.


Massachusetts residents must familiarize themselves with the recent estate tax law changes to make informed decisions regarding their estates. By understanding the nuances of the new legislation and leveraging strategic estate planning, individuals can navigate these changes effectively while safeguarding their financial legacies. Don’t hesitate to seek professional guidance to ensure your estate plan aligns with your long-term objectives in light of these transformative reforms.


Estate Planning With DaMore Law


Whether you’re uncertain about how these reforms will impact your estate or seeking guidance on strategic planning to minimize tax exposure, DaMore Law is here to help.


Our team of experienced estate planning attorneys specializes in navigating complex legal landscapes, ensuring that our client’s assets are protected and their wishes are honored. With a deep understanding of Massachusetts estate tax laws, we can provide personalized insights into your unique circumstances.


Take proactive steps to safeguard your legacy by scheduling a consultation with DaMore Law today.