Massachusetts Estate Tax Thresholds Explained

ByKen Collinson
Massachusetts Estate Tax Thresholds Explained

When planning your estate in Massachusetts, one of the most important considerations is the Massachusetts estate tax. Even families with moderate wealth can find themselves subject to this tax, especially given rising property values across the state.

Below, we’ll explain how the Massachusetts estate tax works, what changed in 2023, and the key planning strategies that can help you minimize or avoid it.

What Is the Massachusetts Estate Tax

Massachusetts imposes a state-level estate tax on the value of a deceased person’s estate. It applies to:

  • Residents of Massachusetts, on their worldwide assets

  • Non-residents, on real or tangible property located within Massachusetts

This tax is separate from the federal estate tax, which in 2024 applies only to estates exceeding $13.61 million.

Massachusetts Estate Tax Threshold (Effective 2023)

As of January 1, 2023, the Commonwealth of Massachusetts increased its estate tax exemption from $1 million to $2 million.

Under this new law:

  • If the total value of your estate is less than $2 million, no Massachusetts estate tax is owed.

  • If your estate exceeds $2 million, only the amount above $2 million is taxable.

A $99,600 tax credit now applies, significantly reducing the tax burden for estates just above the threshold.

This change corrected a long-standing issue in the previous law, under which crossing the threshold meant that the entire estate became taxable. That “cliff effect” no longer applies.

What Counts Toward the $2 Million Threshold

The Massachusetts estate tax considers the gross estate, which includes most property you own or control at the time of death:

  • Real estate (including your primary residence)

  • Bank accounts, investments, and brokerage accounts

  • Retirement accounts (IRAs, 401(k)s)

  • Life insurance proceeds (if you owned the policy)

  • Business ownership interests

  • Personal property such as vehicles, jewelry, and collections

Jointly owned property and certain trust assets may also count toward the taxable estate, depending on how ownership and beneficiary designations are structured.

Estate Tax Rates in Massachusetts

The estate tax is graduated, ranging from 0.8% to 16%, and is applied only to the taxable portion of the estate—the amount exceeding $2 million.

Estate Tax Planning Strategies

Massachusetts does not allow portability of the exemption between spouses (unlike the federal system). That means each spouse must plan separately to use their $2 million exemption effectively.

Common and effective estate planning tools include:

  • Credit Shelter Trusts (Bypass Trusts): Allow married couples to shelter up to $4 million combined from Massachusetts estate tax.

  • Irrevocable Life Insurance Trusts (ILITs): Remove life insurance proceeds from your taxable estate.

  • Charitable Giving: Donations to qualified charities can reduce your taxable estate.

  • Lifetime Gifting: Massachusetts has no gift tax, though federal gift limits still apply.

  • Property Ownership Planning: Proper titling can reduce what counts toward the taxable estate.

These strategies help ensure that what you’ve earned passes to your loved ones, not to the state treasury.

Why MetroWest Homeowners Should Pay Attention

In the MetroWest region—including Hopkinton, Ashland, and surrounding towns—rising real estate values and retirement savings often push families above the $2 million threshold without realizing it. Estate planning isn’t just for the ultra-wealthy; it’s for anyone who wants to preserve assets, simplify probate, and reduce taxes for future generations.

Work With a Massachusetts Estate Planning Attorney

The best way to protect your estate and take full advantage of the new law is to work with an experienced Massachusetts estate planning attorney.

At Collinson Law, we help families across Massachusetts with:

We provide flat-fee estate planning and personalized guidance to ensure your plan reflects your values and financial goals.

Ready to Secure Your Legacy

Contact Collinson Law today to review your estate plan under the new Massachusetts tax rules.

You May Also Like:

  • Frequently Asked Questions About Estate Planning

    ByKen Collinson

    Estate planning is a crucial aspect of managing your assets and ensuring your wishes are carried out after your death or upon your becoming incapacitated. Here are some frequently asked questions about estate planning:
    What is estate planning?
    Estate planning is the process of arranging for the transfer of your assets in the event of your death or incapacitation. An effective estate plan is designed in two parts. The first part is to deal with the implications of a sudden occurrence which leaves you unable to make decisions for yourself, and the second half is to ensure that upon your death, your assets are distributed in accordance with your wishes. There is much more to estate planning than this, but these are the basics.
    Why is estate planning important?
    Imagine if you could provide for your family’s financial security, have decisions in place regarding your healthcare and guardianship forms in place in the event something unforeseen occurs and you need your children cared for. This is why an estate plan is important. These documents can save a lot of grief, time, and money for your loved ones in the event you should become disabled or lose your life unexpectedly.
    When should I start estate planning?
    Any person who has assets, a family member who has a disability, or has significant wealth should have an estate plan in place. You are never too young to have an estate plan if you have assets which do not have designated beneficiaries.
    What documents are typically included in an estate plan?
    Your estate planning documents outline your wishes regarding asset distribution, healthcare decisions, and the management of your finances. This may involve trusts, wills, guardianship documents, powers of attorney, or health care proxies. Since each estate plan is customized, your estate plan will look different than other’s estate plans.
    What is a will, and why do I need one?
    A will is a legal document that outlines how you want your assets distributed after your death. It allows you to name an executor to carry out your wishes and specify guardianship for minor children if needed. If you die without a will (known as intestate) then the Commonwealth of Massachusetts will ultimately use their guidelines for distribution of your assets.
    What are trusts?
    A trust is a legal arrangement where a trustee manages assets. During your lifetime, you would be the trustee and the successor trustee would be able to take control of your assets immediately upon your death or incapacitation.. Trusts can be used to avoid probate, manage assets for minor children, and provide for special needs individuals. One of the most significant advantages of trusts is privacy. Unlike a will, trusts are not required to go through the probate process meaning there is no public record of your estate.
    How does estate planning help minimize taxes?
    Proper estate planning can help minimize estate taxes by using strategies such as gifting, setting up trusts, and taking advantage of tax exemptions. We will discuss the various ways that your estate plan can help minimize the taxes your loved ones will have to deal with following your death.
    What happens if I die without an estate plan?
    If you die without an estate plan, your assets will be distributed according to the laws of the Commonwealth of Massachusetts. This distribution may not align with your wishes. The probate process could also be more time-consuming and costly.
    Can I make changes to my estate plan?
    Yes. It is important to remember that it is essential to review and update your estate plan regularly. Any significant life events such as marriage, divorce, the birth of children, or changes in financial circumstances would warrant making changes.
    Do I need a lawyer for estate planning?
    While it’s possible to create some basic estate planning documents on your own, consulting with an estate planning attorney is advisable. There are several reasons for working with an attorney including their knowledge of the laws of the Commonwealth and their understanding of the importance of a customized plan that works for you and helps meet your needs and goals.
    Estate planning is a personal process. The specifics can and should vary based on your individual circumstances. At Collinson Law, we will help you design an estate plan that helps meet your long-term goals.