Massachusetts doesn’t have an inheritance tax, but some residents of Massachusetts and nonresidents with property in the state will find it can be an expensive state for your heirs to inherit your property, as it employs its own estate tax. Although most of the U.S. won’t have to pay it, this tax is completely independent of the federal estate tax levied to all U.S. residents. These matters get complex, so if you want some extra guidance when considering Massachusetts inheritance laws, a financial advisor can help. SmartAsset’s free advisor matching tool can pair you with up to three financial advisors who serve your area.
Does Massachusetts Have an Inheritance Tax or Estate Tax?
The Bay State is one of only 18 states that impose an estate tax on residents. Any Massachusetts resident who has an estate valued at more than $1 million between property and adjusted taxable gifts is required to file a Massachusetts estate tax return. State lawmakers came close in the summer of 2022 to passing a bill that would have doubled the estate tax exemption to $2 million.
The estate tax rule applies to nonresidents who owned property in the state. Massachusetts gives executors and caretakers of the estate nine months to file this. Depending on the situation surrounding the individual’s death, you may be afforded up to a three-year extension, though most given aren’t for more than six months.
There is no inheritance tax in Massachusetts.
Other Necessary Tax Filings
Unfortunately for some, the above state estate tax isn’t necessarily the only reason you might need to file. As a matter of fact, there are a few other tax considerations to be aware of, according to Massachusetts inheritance laws:
- Final individual federal and state income tax returns: each due by tax day of the year following the individual’s death
- Federal estate/trust income tax return: due by Tax Day of the year following the individual’s death
- Federal estate tax return: due nine months after the individual’s death, though an automatic six-month extension is available if requested prior to the conclusion of the nine-month period
- This is required only of estates that exceed a gross asset and prior taxable gift value of $12.06 million ($24.12 million for couples) in 2022
To make an estate eligible for returns with the IRS, you’ll have to register for an employer identification number (EIN). The IRS allows you to do this online, by fax or via mail.
Dying With a Will in Massachusetts
Similar to what most states require, Massachusetts calls for both the decedent and two witnesses to sign a will before it’s considered testate, a legal term for valid. If your will manages to garner this title, it will dictate exactly how your property is to be inherited.
Presenting clear and concise directions as to who the heirs of your estate will be, and what they’ll receive, is only half the battle. In order to enact these decisions of the decedent, a testate will must also choose an executor. But before this individual can begin transferring property to anyone, he or she has to be sure that any liabilities or debts the decedent left behind have been taken care of and paid off.
Dying Without a Will in Massachusetts
Estates that are lacking a will at the time of a decedent’s death are intestate, and therefore do not have any legal guidelines for how its property should be distributed. While this is likely not how anyone would choose to leave his or her estate, it can happen in cases where the individual died unexpectedly.
Massachusetts inheritance laws detail a whole system just for these situations: intestate succession. We explain this process below as to how Massachusetts inheritance laws decide who the next logical heir of your property should be, beginning with spouses and children, and extending to parents, siblings and more. In most cases, a probate court will handle the management of this sometimes complicated process.
The Probate Process in Massachusetts Inheritance Law
There are three typical forms of probate that Massachusetts inheritance laws entail that are determined by your estate’s specific situation: informal probate, formal probate and late/limited formal probate.
- Informal probate: This is an expedited probate proceeding that is usually used if a will cannot be found, there’s no death certificate or some other extenuating circumstance has occurred.
- Formal probate: This typically calls for multiple court hearings to work out the exact terms of a will, manage creditors and more.
- Late/limited probate: As its name states, this is almost solely used if an estate hasn’t been handled during the first three years following the individual’s death. However, it could be used to simply tie up loose ends, like confirming heirs.
If the estate is claimed as a small estate, it will avoid a probate proceeding altogether, which could save you plenty of time and money. Estates are eligible for this title only if they include no real property (a house or land), and the personal property totals $25,000 or less in overall value. To apply for this distinction, you have to file a small estate affidavit and wait until 30 days have passed since the individual’s death, according to Massachusetts inheritance laws.
Spouses in Massachusetts Inheritance Law
Your surviving spouse is entitled to receive your full intestate estate under two distinctly different sets of circumstances under Massachusetts inheritance laws: if you have no surviving children and parents, or if all of you and your spouse’s children are the product of your relationship. Should either you or your spouse have children with another person, his or her piece of the estate decreases to include the first $100,000 of the estate and half of the balance. Whatever doesn’t go to your spouse is divided evenly among your children.
The only other scenario that can affect how much a spouse inherits is if a married decedent doesn’t leave any surviving descendants (children, grandchildren, great-grandchildren), but one or both of his or her parents outlive the decedent. Should this occur, the parents receive whatever’s left over after the spouse has taken the first $200,000 of the estate, plus half the balance.
Children in Massachusetts Inheritance Law
If you have children, and one or more of them were with a partner other than your spouse, they’ll inherit property from your estate only following the spouse’s legal claim of the first $100,000 of the estate and half of any balance left over. This is the one and only way that your children will inherit a piece of your intestate estate, according to Massachusetts inheritance laws.
|Intestate Succession: Spouses & Children|
|Inheritance Situation||Who Inherits Your Property|
|– If spouse, but no children or parents||– Entire estate to spouse|
|– If spouse and children only from marriage||– Entire estate to spouse|
|– If spouse, and decedent and/or spouse have one of more children from another relationship||– First $100,000 of estate to spouse |
– 1/2 of the estate’s balance to spouse
– Leftover to children
|– If spouse and parents||– First $200,000 of estate to spouse |
– 3/4 of the estate’s balance to spouse
– Leftover to parents
Many decedents will name their grandchildren as heirs within their valid wills. Unfortunately, intestate succession does not recognize them as automatic heirs, unless their parent (your child) has already died.
Aside from the fact that many stepchildren and foster children likely live with decedents for lengthy periods of time, they often become bona fide members of the family. But unless you legally adopt them, they will hold no rights to your intestate estate. This adoption policy applies to any child, not just foster and stepchildren, according to Massachusetts inheritance laws.
Simply being the biological offspring of decedent doesn’t guarantee a child an inheritance from their parent’s intestate estate. In cases where the child was placed into the adoption system and adopted by a family or individual, all inheritance rights are dissolved.
If your biological child is conceived prior to your death but born after, he or she gets normal children’s inheritance rights as if born during your life. This policy isn’t reserved solely for biological children, though, as it also extends to all relatives of a decedent, according to Massachusetts inheritance laws.
Children born outside of wedlock can inherit from your intestate estate, though a few stipulations do apply. In order for this to happen, your paternity must be proven through the use of a genetic test or by your own admission prior to your death.
Unmarried Individuals Without Children in Massachusetts Inheritance Law
Whereas most states will dig through your entire family tree to find eligible relatives to inherit your estate, Massachusetts sets in motion a much less specific process. It goes like this:
|Intestate Succession: Extended Family|
|Inheritance Situation||Who Inherits Your Property|
|– If parents, but no spouse or children||– 1/2 of the estate to each parent|
|– If no parents||– Estate split evenly between siblings|
|– If no siblings||– Estate to nearest lineal relative(s)|
If the intestate succession laws of Massachusetts fail to discover any suitable relatives to take ownership of your estate and the property within it, it will escheat and become state property. But if the decedent was a veteran who belonged to the Soldiers’ Home in Massachusetts or the Soldiers’ Home in Holyoke, the estate is given to the organization to which he or she belonged.
Non-Probate Massachusetts Inheritances
The probate process in Massachusetts passes over a few common types of assets that already have beneficiaries attributed to them. Therefore, these accounts and holdings of a decedent are given directly to the beneficiary without the help of the courts.
In most cases these are likely to be payouts for life insurance, IRAs, 401(k)s and jointly-held bank accounts and real estate. This non-probate distinction also applies to transfer-on-death investment accounts, pay-on-death bank accounts and all property within a valid trust, though.
Other Situations in Massachusetts Inheritance Law
If an individual you want to make an heir to your estate is not a U.S. citizen, Massachusetts law will not impair him or her from inheriting. Even illegal residents in the U.S. are granted these rights. In addition, let’s say you have a brother that you only share a father with, making him your half-brother. As far as the state is concerned, this person has the same right to your intestate estate as any other sibling you might have.
Resources for Estate Planning
- Managing an inheritance of any kind, whether your own estate or the estate of a loved one, includes many factors that may cause confusion when considering Massachusetts inheritance laws. For some, it can be quite an overwhelming venture, so you might want some professional help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Some financial advisor and estate planning attorney fees can get quite expensive. You can also build an estate plan on your own, but make sure to avoid these DIY mistakes.
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