One of the many duties of the executor of an estate is making sure that the estate taxes are paid and handled correctly. While proper estate planning can minimize the tax burden, it is likely that at least some portion of the estate will go toward taxes.
In the state of Massachusetts, the amount of the estate tax is determined by the total taxable value of the estate assets. For estates with a taxable value of up to $50,000, the tax is 5 percent. From $50,000 to $4 million, the estate tax is a lump sum plus a percentage on the rest of the amount. For example, an estate with a taxable value of $1.5 million will be assessed $107,000 in taxes plus an additional 14 percent on the amount over $1 million. In this example that would be an additional $70,000, for a total tax of $177,000.
The base lump sum and additional percentage increases as the value goes up to $4 million. At that point, the lump sum is $547,000 and the additional percentage is 16 percent on any amount above the $4 million. It’s important to remember, however, that this is just the very basic calculations from the Massachusetts estate tax tables and does not take into consideration any exemptions or credits.
While a basic understanding of the Massachusetts estate tax can help executors feel more comfortable with the process, there are several exemptions and credits that can be involved. This is why it’s a good idea to discuss the tax burden with a probate and estate administration attorney to make sure everything is taken care of.
Source: The 189th General Court of the Commonwealth of Massachusetts, “General Laws” accessed Feb. 27, 2015
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