Staying on top of legal updates can save you and your loved ones a lot of hassle, and money, down the road. In the last couple of years, Massachusetts has made some key adjustments to its estate tax rules, and a new federal law from 2025 adds another layer. Whether you’re just starting to think about your will or have a plan in place, these changes could impact how you protect your assets. Let’s dive in, keeping things clear and simple.
The Big State Tax Threshold Bump from 2023
In late 2023, Massachusetts lawmakers increased the estate tax exemption from $1 million to $2 million. This applies to anyone who died on or after January 1, 2023, even if it was before the law was signed. Under the old system, exceeding the limit by even a little meant taxes on everything. Now, a credit of up to $99,600 wipes out taxes for estates at or below $2 million, and larger ones only pay on the excess. For example, if your estate is worth $2.1 million, you’d only face taxes on that extra $100,000. This removes the old “cliff” and makes planning less punitive for families in that mid-range.
Excluding Out-of-State Property: The 2024 Update
Building on that, a 2024 amendment lets Massachusetts residents exclude real estate or personal items (like vehicles or collectibles) located outside the state from their taxable estate. This is also retroactive to 2023 deaths. If you own a condo in New Hampshire or land in Vermont, it won’t count toward your $2 million limit anymore. For non-residents with property here, taxes are only on the Massachusetts portion. This change simplifies things for people with assets spread out and could tip the scales for avoiding taxes entirely. If your estate was filed under the old rules, you might qualify for a refund. Check with the state’s Department of Revenue.
The Federal Boost in 2025 and How It Plays In
Nationally, the “One Big Beautiful Bill Act” signed in July 2025 permanently raises the federal estate, gift, and generation-skipping transfer tax exemptions to $15 million per person (or $30 million for married couples) starting in 2026, with yearly inflation tweaks. This replaces the planned drop back to about $7 million. While Massachusetts has its own estate tax (which isn’t tied directly to federal rates), this federal increase opens up strategies like larger lifetime gifts without owing Uncle Sam. Those gifts could lower your estate’s value enough to stay under the state’s $2 million threshold, potentially saving thousands in MA taxes. It’s especially useful for high-net-worth folks, but even average families might benefit from gifting to kids or grandkids now.
What Does This Mean for Your Plan?
If these updates have you thinking about your own estate plan, now is the perfect time to take action. Our experienced team is ready to guide you through the process with personalized advice tailored to your needs. Contact us today to schedule a consultation and ensure your family’s future is secure with a plan that reflects these new opportunities.