Many Massachusetts and Rhode Island residents are surprised to learn that, despite being of relatively modest means, their estate will likely be subject to a Massachusetts or Rhode Island estate tax. The Massachusetts estate tax kicks in at $1 million, while the Rhode Island estate tax threshold is just under $900,000. While that may sound like a lot of money, for estate tax purposes the government looks at everything you have any ownership interest in – including home equity, retirements plans, savings, and the death benefit value of certain life insurance policies. When you start doing the math, you can see how even middle class and blue collar families have their estates subjected to the Rhode Island or Massachusetts estate tax.
As a Massachusetts and Rhode Island estate planning attorney, one of my objectives is to determine whether my clients are likely to have their estates subjected to Massachusetts or Rhode Island estate taxes. If so, it is critical that we engage in estate tax planning and create marital trusts, credit shelter trusts, and other mechanisms necessary to reduce, eliminate or defer estate taxes. Indeed, estate taxes can cost even middle class families tens or hundreds of thousands of dollars, thus leaving far less to survivors than originally anticipated. As a result, those we leave behind may have their quality of life impacted, and the Rhode Island or Massachusetts Departments of Revenue will receive what should have remained with our families.
Therefore, when you are ready to discuss the preparation of wills, health care proxies, powers of attorney, and other estate planning documents, make sure you work with an experienced Rhode Island or Massachusetts estate planning attorney. Effective estate tax planning is one of the key benefits an estate planning attorney can provide; a benefit you cannot and will not receive by downloading boilerplate wills and other documents off the internet. With careful planning, we can achieve greater peace of mind knowing the money meant for our family’s long-term security will not be needlessly wasted.