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What are Estate Taxes?

Posted on: May 29th, 2015
The Personal Representative for a decedent that was domiciled in Massachusetts must file a Massachusetts Estate Tax Return if the gross value of the estate, including adjusted taxable gifts, exceeds $1,000,000.  The applicable exclusion amount for Federal Estate Tax purposes is currently $5,430,000 in 2015. 

For example, if at your death, your Estate is valued at $800,000 and during your lifetime, you had made gifts of $840,000 which is in excess of the annual exclusion amounts (which is currently $14,000/year), then the total value of your estate would be $1,640,000.  This would put you in excess of the $1,000,000 exemption on Massachusetts Estate Tax's and as a result, your Personal Representative would be responsible for paying Estate taxes on the entire $1.64 million.

Keep in mind that if you leave everything to your spouse, it will all pass tax-free.  The issue arises when you the other spouse dies because at that point the entire estate will be taxed if over the exemption amounts specified above.

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