Massachusetts Estate Planning Considerations
Massachusetts is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage hold that subject to various qualifications, each spouse owns and has complete control over their own her income and property.
Last Will and Testament
The minimum age of a person competent to make a will is 18. The number of witnesses necessary to execute a will is two.
The original custodial gift may be a life insurance policy or annuity contract.
Custodial property may be invested in or used to pay premiums on (1) a policy on the minor’s life if the minor’s estate is the sole beneficiary, or (2) a policy on a third party in whom the child has an insurable interest if the minor or the custodian is the irrevocable beneficiary.
The custodial arrangement terminates when:
- The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, trust, or exercise of a power of appointment.
- The minor child reaches age 18 for other custodial transfers.
- The minor child dies.
Dying without a Last Will, the Massachusetts laws of Intestacy
The estate goes to the surviving spouse, as follows:
- If there are no surviving descendants or parents, —100% of the estate
- If all descendants are also descendants of the spouse and the spouse has no other surviving descendants, —100% of the estate
- If one or both parents survive, but there are no surviving descendants—$200,000 plus 75% of the balance of the estate
- If all descendants are also descendants of the spouse and the spouse has at least one surviving descendant that is not a descendant of the decedent—$100,000 plus 50% of the balance of the estate
- If one or more surviving descendants are not also descendants of the surviving spouse—$100,000 plus 50% of the balance of the estate
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
- 100% to descendants, per capita at each generation (see Mass. Gen. Laws ch. 190B, §2‐106)
If there is no surviving spouse or descendant:
- 100% to surviving parent or parents equally
If there is no surviving spouse, descendant, or parent:
- 100% to descendants of the decedent’s parents (or descendants of either parent), per capita at each generation (see Mass. Gen. Laws ch. 190B, §2‐106)
If none of the above:
- Intestacy laws outline further distribution steps to the level of “next of kin” and related individuals. See Mass. Gen. Laws ch. 190B, §2‐103(4).
- If no legally described recipient can be found, estate assets go to the Commonwealth of Massachusetts.
Massachusetts does not automatically grant access to digital assets to executors or personal representatives of estates. Account owners must leave instructions and account information to grant fiduciaries access to digital assets. Massachusetts has introduced but has not yet passed an act for uniform fiduciary access to digital assets.
Massachusetts does not impose an inheritance tax.
Credit Estate Tax
Massachusetts imposes an estate tax equal to the maximum credit permitted for paid state estate and inheritance taxes under the federal tax code in effect on December 31, 2000.
The exemption is equal to $1,000,000, and the top tax rate is 16%.
Massachusetts imposes a GST tax equal to the maximum credit allowed under IRC Sec. 2604 for paid state GST tax. However, the current federal tax code does not permit a credit for paid state GST tax. Therefore, there is no current GST tax.
Massachusetts does not impose a gift tax.