Blog

Estate Tax Planning for Married Couples: What You Need to Know

by

Estate tax planning can be an important part of creating a comprehensive estate plan, especially for married couples.

In this video, Attorney Brittany Hinojosa Citron of Samuel, Sayward & Baler discusses estate tax planning considerations for married couples and why thoughtful planning can help protect your assets and ensure your estate is structured according to your goals.

Every family and estate is different, and the right strategy will depend on your assets, family circumstances, and long-term objectives.

If you have questions about estate tax planning or would like to review your existing estate plan, the attorneys at Samuel, Sayward & Baler can help.

Learn more or contact us: https://ssbllc.com/contact

Five Reasons AI and Estate Planning Don’t Mix

by

Artificial intelligence is the newest technological innovation that many people are excited to use.  In many ways, AI can make your life easier – it can help you draft an email, plan a vacation, summarize a document, tell you how much your grandfather’s pocket watch is worth, or answer just about any question you can think of.  So it is understandable that some people are turning to AI to help them complete a task that may have been on the To Do List for a while – creating a Will or other estate-planning documents.

After all, if AI can write a legal-sounding document in seconds, why pay an attorney?

The problem is that estate planning isn’t simply about taking a list of your wishes and creating a document that puts those wishes into legal language.  A good estate plan has to account for your family members (and sometimes challenging family dynamics), your assets, state law, income and estate tax considerations, joint ownership of assets, beneficiary designations, and what could happen if circumstances change. A document that looks and sounds legally correct can easily still fail to accomplish what you intended.

Here are five reasons you should think twice before relying on AI for your estate plan.

  1. Estate planning laws vary from state to state

One of the biggest problems with using AI for legal documents is that the law isn’t the same everywhere.

State laws governing Wills, Trusts, witnesses, notarization, powers of attorney, health care decision-making, joint ownership, asset protection, and estate taxes can vary significantly from one state to another, even within New England. Even small procedural requirements can affect whether a document is valid at all, or whether it will work the way you intended.

AI may provide a document that looks correct without taking into account the nuances of the law of the state where you live.  Lawyers take bar exams and are admitted to practice in a particular state for this exact reason – because it is important to be well-versed in the law of the state in which you practice, which is different than the law of any other state. 

A false reliance on AI generated legal documents is  especially risky because estate planning is one area where “close enough” isn’t necessarily good enough. You don’t want to discover after your death that a document didn’t meet a particular legal requirement.

  1. AI doesn’t know your family the way an estate-planning attorney does

Estate planning is about people as much as it is about paperwork.  When you meet with an estate planning attorney for an initial consultation, a good attorney will spend a good deal of time at that initial meeting getting to know you and your family, as well as understanding the assets you own, how you own them, and your planning goals.  Maybe you have children from a previous marriage. Perhaps one child has special needs, one is financially inexperienced, or one has received substantial gifts during your lifetime. Maybe you’re concerned about protecting assets for your spouse or grandchildren.  Maybe you are in a profession where liability is a concern.  Maybe you are not in good health and are concerned about protecting assets from long-term care liability.  These and countless other facts about you or your family can dramatically change your attorney’s advice about the best way to structure an estate plan.

An AI chatbot can respond only to the information you give it.  Many clients come to us and describe their situation as “simple” when in fact it is anything but simple from a planning perspective.  When you don’t understand what information is important, chances are you are not giving AI all of the facts it needs to advise you properly.  The AI chatbot isn’t sitting across the table from you and seeing from your facial expressions that the answer to  a particular question requires further discussion, nor does it know the kinds of follow-up questions an experienced estate-planning attorney knows to ask.  Estate planning attorneys are trained to identify the potential issues you haven’t thought about or don’t even realize exist, to ask the sometimes difficult questions, and to help you make informed decisions about the best options to address the issues that may be present.

  1. A document can look right and still be wrong

AI is remarkably good at producing documents that look and sound like they were written by an attorney.  But a document that sounds like a lawyer wrote it isn’t necessarily a document that will accomplish your goals.

For example, a homemade Will might say who receives your property but fail to address what happens if a beneficiary dies before you.  That same Will might be signed by you, but not witnessed or notarized properly, making it invalid.   A power of attorney might not allow the person you have named to make decisions for you to take certain steps that are necessary based on the types of assets you own.  A trust might be created without properly transferring assets into it, which will require a lengthy and costly probate proceeding following your death.  

And the document alone is not enough.  Your estate plan documents need to work within the law of your state to accomplish your goals and fit together as part of a larger estate plan, which includes asset ownership and beneficiary designations that are consistent with your plan.

  1. Your estate plan is more than a will

Another common mistake is thinking that estate planning means simply writing a Will.

A complete estate plan typically includes powers of attorney and health care directives that address decision-making during incapacity, as well as Wills, and revocable and/or irrevocable Trusts.  If you own real estate, deeds may be necessary to transfer ownership of your property, as well as a Declaration of Homestead that protects the equity in your primary residence against creditors’ claims.  

The individual components are important, as well as how they interact with and impact each other.  For example, your Will generally doesn’t control assets that pass directly to a joint owner or a beneficiary, or that are owned by a Trust.  Your Will will not be effective, despite how well it’s written, unless asset ownership and beneficiaries are coordinated properly.

AI can help you make a checklist of questions to discuss with a professional. It is impossible for it to independently verify that every part of your estate plan works together, or know what questions to ask to make sure that’s the case.

  1. Taxes are Complicated

Massachusetts is one of a handful of states with a separate state estate tax, imposed on the value of the assets you own at the time of your death.  With good advice and appropriate estate planning, it is possible to reduce or eliminate this tax, but this type of planning requires the guidance of an experienced estate planning attorney.  Knowing the subtleties of Massachusetts law and estate tax regulations and practice around things like out of state property (like your New Hampshire lake house or your Vermont ski condo) or gifts you may have made to your child to purchase their first home are key to advising you properly.  

AI can be a useful starting point for estate-planning education. It can help you understand unfamiliar terminology, create a list of questions for an attorney, organize information about your assets, or explain the difference between documents.  We encourage you to use AI as a starting point to learn about estate planning, and to follow that up with a visit to the websites of estate planning attorneys in your state where you can find state-specific articles about planning that may be appropriate for you.  We do not encourage you to use AI to do your estate planning.  Although the time and cost savings may be tempting, an inappropriate estate plan will create more issues than it solves, including problems that aren’t obvious to you until it’s too late to correct them.

Your estate plan represents some of the most important decisions you can make about your family, your property, and your future.  Let an experienced estate planning attorney help you make the right decisions and put a plan in place that is appropriate for you and your family’s situation.  I will end up saving you time and money in the long run and give you peace of mind.

Attorney Brittany Hinojosa Citron is a senior associate attorney with the Dedham, Massachusetts, firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information or to schedule a consultation with one of our attorneys, please call 781-461-1020. 

© 2026 Samuel, Sayward & Baler LLC

The Massachusetts Homestead Law: What it Protects—and What it Doesn’t

by

For many Massachusetts homeowners, their home is their largest asset, and one of the most important assets they hope to preserve for themselves and their families. Unfortunately, unforeseen circumstances such as lawsuits, debts, or financial challenges can threaten the security of homeownership. To help safeguard against these risks, Massachusetts offers homeowners the opportunity to declare a homestead.

What is a Homestead?

The Massachusetts homestead law protects homeowners from the forced sale of their primary residence to satisfy certain debts or obligations. A Massachusetts homeowner is entitled to automatic homestead protection of $125,000, but homeowners who file a Declaration of Homestead with the Registry of Deeds can increase that protection to $1 million. For married couples where both spouses are over the age of 62, the homestead protection can be doubled to $2 million by filing an “Elderly” Declaration of Homestead. Increased homestead protection is also available to disabled individuals regardless of age. Homestead protection is available whether you own your property in your individual name(s) or in trust.

Although a homestead can protect some of the equity in a person’s principal residence from certain creditors and claims, it does not shield against every debt, lien, or obligation. There are important exceptions that every Massachusetts homeowner should understand. Here is what Massachusetts homestead protection does—and does not—cover.

What Does a Homestead Protect?

Homestead protection is designed to protect a homeowner’s primary residence from certain unsecured creditor claims and extends to the homeowner’s spouse and children under the age of 21 who reside in the home. The Massachusetts homestead law protects against attachment, seizure, execution on judgment, levy, or sale for the payment of debts up to $1 million (or $2 million for two owners who qualify for the elderly or disabled homestead protection) per residence, per family.

If the homeowner sells the primary residence, proceeds from the sale continue to receive protection for a limited period: until the homeowner acquires a new home with the proceeds or one year after the sale, whichever occurs first. There are also specific protections for proceeds following fire or other casualty damage: two years after the date of the loss or the date when the home is reconstructed or a new home is purchased, whichever is earlier.

What Does a Homestead Not Protect?

A homestead is not a blanket exemption from all debts and liabilities. Massachusetts law specifically identifies several circumstances in which homestead protection does not prevent a creditor or other claimant from enforcing its rights. Here are just a few examples of when homestead protection does not apply:

  1. Mortgages. Recording a declaration of homestead does not mean that the homeowner can stop making mortgage payments and prevent the lender from foreclosing. A homestead is subordinate to a mortgage and does not apply to mortgage lenders.
  2. Taxes. Homestead protection does not prevent the government from collecting federal, state, and local taxes, such as real estate taxes. It does not protect a property from a valid tax lien.
  3. MassHealth/Medicaid Liens. Any liens imposed on the home as a result of MassHealth/Medicaid benefit payments are exempt from homestead protection. When the lien is enforced by the Commonwealth is a different story and outside the scope of this article. You should consult with an attorney to address your specific situation regarding MassHealth/Medicaid.

Massachusetts homestead law also excludes liens on the home that were recorded before the creation of the homestead estate, enforcement of child support and other court-ordered support obligations, and certain judgments involving fraud, duress, undue influence, or lack of capacity.

If the equity in your home is greater than the homestead protection, the home may still be sold, but the creditor will receive only what is left after you first receive proceeds equal to the amount of the homestead protection.

A Massachusetts homestead is a valuable component of a homeowner’s overall asset-protection and estate-planning goals. Filing a Declaration of Homestead in Massachusetts is relatively straightforward and inexpensive. By taking advantage of the Massachusetts homestead law, homeowners can secure their primary residence and help ensure a portion of the equity in their homes for themselves and their loved ones. Whether facing unforeseen circumstances or simply seeking peace of mind, declaring a homestead is a prudent step towards protecting one’s most significant asset – the family home. If you have questions about homestead protection or if we can help you with your estate planning needs, please contact us to schedule a consultation with one of our attorneys.

Attorney Brittany Hinojosa Citron is a senior associate attorney with the Dedham, Massachusetts, firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information or to schedule a consultation with one of our attorneys, please call 781-461-1020. 

© 2026 Samuel, Sayward & Baler LLC

Five Assets Includable in Your Taxable Estate – and One that Isn’t

by

When people think about estate taxes, they often picture a tax on the ultra-wealthy. But your taxable estate may be larger than you think. 

Estate tax is a tax owed on the value of certain assets you own or control at the time of your death – even those that may have a beneficiary named. In other words, just because an asset has a named beneficiary or transfers directly to someone after your death does not necessarily mean it is excluded from the estate tax calculation.

While the federal estate tax exemption is $15 million, the Massachusetts estate tax exemption is only $2 million. That means that if the total value of your assets exceeds $2 million when you die, your estate may owe estate tax to the Commonwealth.

But what counts toward that $2 million? The answer may include more than you think. Here are five assets that are includable in your Massachusetts taxable estate – and one type of asset that generally is not.

  1. Life Insurance Death Benefits

Life insurance is often intended to provide financial support to loved ones after someone dies.  Life insurance benefits are not income taxable to the recipient, and because the proceeds are paid directly to a named beneficiary, many people assume the death benefit is not subject to estate tax.

That is not always the case.

If you owned the life insurance policy or retained certain rights or control over it at the time of your death, the death benefit is included when calculating the value of your taxable estate. The life insurance proceeds may avoid probate by naming beneficiaries, but avoiding probate and avoiding estate tax are two different things. 

Life insurance benefits can be substantial, and many people don’t take this into account when considering their estate tax exposure. For example, if you own a $2 million life insurance policy and $100,000 equity in your house, your taxable estate is already over the threshold without even taking into consideration your other assets.

If you have a substantial life insurance policy and a taxable estate, you may want to consider owning the policy in an irrevocable life insurance trust, which can shelter the death benefit from being subject to estate tax in your estate.

  1. Tax-Deferred Retirement Accounts

Retirement accounts are another asset that may be easy to overlook. Accounts such as traditional IRAs, 401(k)s, and 403(b)s typically have beneficiary designations, allowing the funds to pass directly to the people you name.

However, passing outside of probate does not necessarily mean the account is excluded from your taxable estate. The value of retirement accounts will still be included as an estate asset when calculating your Massachusetts estate tax.

There may also be income tax considerations for the beneficiaries who inherit these accounts. Because estate tax and income tax are separate taxes, it is important to look at the full tax picture when deciding how retirement assets fit into your estate plan.

  1. Tangible Personal Property

Your estate is not limited to real estate and financial accounts. It also includes the physical property you own, known as tangible personal property.

This may include vehicles, artwork, jewelry, collectibles, furniture, boats, and other valuable belongings. While many household items may have limited value, some assets can be worth much more than their owners realize. A classic car, a collection of artwork, or valuable jewelry could add a meaningful amount to the value of an estate.

Keeping an inventory of valuable property and obtaining appraisals when appropriate can help you better understand the total value of what you own, and plan for the impact on any estate tax due.  This is especially important if you own high value assets that you would not want to be sold to pay estate tax following your death.

  1. LLC Interests

If you own an interest in a limited liability company, or LLC, that ownership interest may also be includable in your taxable estate.

This can be easy to miss because the LLC itself may own business assets, investment property, or other property that is separate from your personal assets. However, your ownership interest in the LLC may still have value and may be included when the value of your estate is calculated.

Valuing an LLC interest can be complicated, especially if the company is privately held and there is no public market for its ownership interests, or if the LLC has multiple owners. The LLC’s operating agreement may also affect what happens to your interest after your death. Reviewing your business interests as part of your estate plan can help avoid surprises,  ensure your succession plans work as intended, and understand how your family may be impacted by having to pay estate tax on an asset that is illiquid or that cannot easily be sold.

  1. Massachusetts Real Estate Owned by a Nonresident

You do not have to live in Massachusetts for Massachusetts estate tax to be a factor.

If you are a resident of another state but own real estate in Massachusetts, that property may create a Massachusetts estate tax filing obligation. For example, you might live in New Hampshire but own a Massachusetts vacation home or investment property. If you have more than $2 million in equity in that Massachusetts house, then this equity will be taxed. If you own multiple properties in Massachusetts, then the total value of your equity across all the properties would be includable for an estate tax calculation. 

The rules for nonresidents can be complex. The important point is that owning real estate in Massachusetts can have estate tax implications even if Massachusetts is not your home state.

  1. The One That Isn’t: Real Estate Located in Another State

On the flip side, real estate located outside Massachusetts is generally not included in your taxable estate as a Massachusetts resident.

For example, if you live in Massachusetts but own a vacation home in Florida or a rental property in another state, that out-of-state real estate may be excluded when calculating Massachusetts estate tax.  The caveat is that out of state property held, for example, in an LLC will be part of the owner’s Massachusetts taxable estate since the asset is now a business interest rather than a real property interest, 

Even if the property is owned as a real property interest, that does not necessarily mean the property is free from all estate-related taxes. The state where the property is located may have its own state estate, inheritance, or other tax rules.  Furthermore, the value of that property is still part of your federal taxable estate. Still, the location of real estate and how it is owned can make an important difference when evaluating your potential Massachusetts estate tax exposure.

Understanding Your Estate Is the First Step

Estate tax planning is about more than adding up the value of your home and financial accounts and hoping for the best. Understanding estate tax exposure is simply one factor in a well-rounded estate plan.

The good news is that understanding what may be included in your taxable estate gives you an opportunity to plan. By working with your estate planning attorney, you can review your assets, identify potential estate tax exposure, and explore strategies that can minimize or eliminate estate taxes while supporting your goals. Starting the conversation now can help you make informed decisions, protect what you have built, and create a more confident plan for the people you care about.

 

Attorney Leah A. Kofos is a senior associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of Trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781-461-1020.

© 2026 Samuel, Sayward & Baler LLC

What are Capital Gains Taxes?

by

The 16th Amendment to the U.S. Constitution gives the Federal Government the power to tax the income earned by its residents and citizens, and Massachusetts has an equivalent provision in its state Constitution. For a lot of income, this taxation is fairly straightforward. If there is a 5% tax on income earned, and $100 is earned, then:

$100    x    .05    =    $5

is owned in tax. Because the person being taxed just received $100, we know that they have the ability to pay the $5. In other words, because the income is a liquid asset, the tax can be levied immediately without issue.

However, income is not always in the form of a liquid asset. For instance, if someone owns a stock worth $200 and the value of the stock rises to $210, that person has received $10 in value. This type of income is known as a Capital Gains because it is the “gain” in value of the asset’s “capital”, i.e. increase in the asset’s worth. Capital Gains are generally taxed at lower rates than Ordinary Income but can still create huge financial consequences for individuals with investments.

Because Capital Gains are just the increase in value of an asset, it is difficult to tax them on an ongoing basis. For instance, if a house is worth $500,000 and rises in value by $100,000 each year, do we tax the $100,000 at the end of each year? What would we do if the person being taxed doesn’t have the liquid assets to pay the Capital Gains Tax?

The solution is to only tax Capital Gains when the asset is being sold. So, if the house purchased at $500,000 is sold two years later for $700,000, the Capital Gain of $200,000 will be taxed at this point. If there is a 5% Capital Gains tax, then there is:

$200,000    x    .05    =    $10,000

in Capital Gains Tax owed.

One complexity with Capital Gains taxation is determining the “before” value of an asset, known in tax lingo as the tax basis. If a house is purchased for $400,000, its tax basis is $400,000 and any Capital Gains calculations will use $400,000 as the starting point for any increase in value. However, things work differently if an asset is gifted. Because there is no money changing hands with a gift of a Capital asset, we would have a liquidity issue if a tax was due upon the date of the gift. The solution here is to have no tax due upon the gift but for the asset to keep the same tax basis for the giftee as the giftor. For instance, if someone buys a house for $600,000 and then gifts the house to their daughter when the house is worth $700,000, the daughter will still have a tax basis of $600,000. When she later sells the house for $800,000 she will have $200,000 ($800,000 – $600,000) in Capital Gains. However, there is a different tax consequence for inheritances. If instead of gifting the house to their daughter, the person left the house to their daughter in their estate plan at their death, the daughter’s tax basis in the house will be the date-of-death value of the house. This is known as a stepped-up basis. In the example above, if the person buys a house for $600,000 and then dies when it is worth $700,000, leaving it to their daughter, when the daughter sells the house for $800,000 she will only have $100,000 ($800,000 – $700,000) in Capital Gains. 

This tax difference between gifting and inheriting should always be considered when transferring houses or other Capital assets to children or irrevocable trusts. Although gifting a house may be advantageous for estate tax reduction, you may introduce substantial Capital Gains tax issues. It’s best to discuss any gifting strategy with your attorney to make sure you are not accidentally creating any negative tax consequences and to take a comprehensive approach to tax planning when making your estate plan. 

Attorney Sean Downing is a senior attorney with the Dedham firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of Trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781-461-1020.

© 2026 Samuel, Sayward & Baler LLC

How Getting Married Affects Your Taxes, Estate Plan & Estate Tax

by

Marriage can have a significant impact on your taxes, estate plan, and long-term financial decisions.

In this Smart Counsel for Lunch video, attorney Brittany Hinojosa Citron explains what couples should consider before and after getting married, including potential tax changes, estate planning updates, and estate tax considerations.

Whether you are newly engaged, recently married, or reviewing an existing estate plan, understanding these changes can help ensure your wishes and financial goals remain protected.

 

5 Types of Taxes to Consider for Estate Planning

by

250 years ago, our country declared independence from Great Britain in no small part due to unfair taxes. Two and a half centuries later, Americans are still looking for ways to pay less taxes. In fact, one of the most common questions we get as estate planning attorneys is how to reduce taxes with estate planning.

Estate planning intersects with multiple types of taxes, and there are many strategies, sometimes conflicting strategies, to reduce taxes. Below are five types of taxes to consider when estate planning:

1. Estate Taxes

An estate tax is a one-time tax due at someone’s death based on the value of the deceased person’s assets at death. The federal estate tax is only applicable when a person dies with more than $15 million (2026 amount) in their estate. However, the Massachusetts estate tax kicks in when a person dies with $2 million in their estate, which can very easily happen in Massachusetts if a person owns real estate.

Assets passing outside of probate, such as retirement accounts with beneficiaries, investment accounts held in a revocable trust, and life insurance are all countable assets when calculating estate tax. This means that estate planning tools for avoiding probate do not automatically reduce estate tax liability.

There are a few options to reduce estate taxes at your death. Married couples can utilize credit shelter trusts to make sure that both of their $2 million estate tax exemptions are used. People can also give away assets before their death, perhaps to their children or to irrevocable trusts to lower their taxable estate. The best approach will largely depend on your asset structure and family situation, and you should discuss your options with your estate planning attorney.

A similar concept to an estate tax is an inheritance tax, which is a tax the beneficiaries have to pay as they receive money instead of a tax the estate has to pay before assets pass to the beneficiaries. A few states have inheritance taxes, but Massachusetts does not. There is also no federal inheritance tax.  

2. Income Taxes

Income taxes become relevant to estate planning whenever there are pre-tax retirement accounts such as traditional IRAs, 401(k)s, and 403(b)s. Distributions from these accounts are taxed as income to you (or whoever the beneficiary is). Because income taxes are taxed using progressive brackets, it is usually preferable for pre-tax retirement accounts to take out smaller distributions over a longer period of time as opposed to taking larger distributions over a shorter period of time. 

The federal government has a lot of rules around beneficiaries taking out required distributions from retirement accounts and the period of time a beneficiary has to take out distributions. The period of time can vary widely from 5 years to the rest of the beneficiary’s life. Depending on your retirement assets, the intended beneficiaries for said assets (including whether there is any charitable giving as part of your estate plan), your marital status, and use of trust instruments as part of your plan, your estate planning attorney can advise you on the best way to minimize income taxes due while achieving your estate plan goals. 

3. Capital Gains Taxes

Capital gains taxes are a subtype of income taxes imposed upon the increase in value of an asset. A tax is only due when an asset is sold, and the tax is calculated against the amount of capital gain (the present value of the asset less the tax basis). The classic two examples of capital gains taxes are on houses and stocks. If you buy your home for $150,000, and then later sell it for $200,000, there is a capital gain of $50,000.

There are a couple of laws in place which help reduce capital gains tax liability. First, there is a $250,000 capital gains exclusion ($500,000 for a married couple) for the sale of your primary residence. This means that $250,000/$500,000 is deducted from your capital gains before a tax is calculated. 

The second law concerns “stepped-up basis”. When an asset like a house is gifted to someone, the house retains the tax basis of the person who made the gift. However, when a house is inherited, the house’s tax basis becomes the value of the house at the deceased person’s death (it gets a “stepped-up” basis). For example, if person A buy a house for $100,000, gifts the house to person B when it is worth $150,000, and B later sells the house for $175,000, the capital gain is $75,000 ($175,000 – $100,000). If, instead, person A buys a house for $100,000, dies when the house is worth $150,000 leaving it to person B, and B later sells the house for $175,000, the capital gain is just $25,000 ($175,000 – $150,000).  

The takeaway lesson is that it often makes sense to hold onto property until your death rather than giving it away. This can affect what type of estate planning documents and provisions are necessary. 

4. Gift Taxes

Gift taxes are an often-misunderstood type of tax. There is no Massachusetts gift tax, but there is a federal gift tax, which is tied to the federal estate tax. As mentioned above, every person has a $15 million exemption (2026 amount) before they need to pay any estate taxes. However, if a person makes large gifts throughout their lifetime, that $15 million exclusion is reduced by the amount of the gift. For instance, if person C made a gift of $1 million to her child, her lifetime federal estate tax exemption would be reduced from $15 million to $14 million. 

The federal government does not want to track every small gift you make, so you only need to file a gift tax return when you make a gift of over $19,000 per recipient (2026 amount). If a gift of over $19,000 to a single person was made during a year, no tax will be due (unless you’ve exhausted the $15 million amount). The gift of over $19,000 simply triggers a need to file the gift tax return. 

Gifting is frequently part of a comprehensive estate plan strategy to reduce your estate for estate tax purposes. For most people, this will result in more tax paperwork but not an increase in taxes. 

5. Generation Skipping Transfer Taxes

Families with large amounts of assets may not just be worried about their estate tax liability but the estate tax liability of their children. The fear is that a federal-estate-tax taxable inheritance left to your child will make your child wealthy enough that their estate also has a federal estate tax. This could be viewed as a double hit of estate tax on the same wealth.

A strategy around this would be to leave some of your assets to your grandchildren instead of it all to your children. That way, your children’s estates will be reduced at their death for estate tax purposes. The federal government, however, curbs this strategy somewhat with the generation-skipping transfer tax. (There is no Massachusetts generation skipping transfer tax.) The generation-skipping transfer tax imposes a tax on any transfer from you to someone 37.5 years younger than you (excluding children and children of deceased children). However, like the federal estate tax, there is a $15 million lifetime exclusion amount. This $15 million exclusion is separate from the combined $15 million federal estate/gift tax exclusion. 

Most clients will not need to worry about generation skipping transfer tax, but it is important to know what it is and why language for it often appears in trusts. 

When drafting your estate plan, it’s important for you to let your estate planning attorney know your tax concerns so they help create a plan that best meets your needs.

Attorney Sean Downing is a senior attorney with the Dedham firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of Trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781-461-1020.

© 2026 Samuel, Sayward & Baler LLC

Wills • Trusts • Elder Law • Long-Term Care Planning • Estates

©2026 Samuel, Sayward & Baler LLP. All Rights Reserved. The information presented on this website should not be construed to provide legal advice, nor does it constitute the formation of an attorney/client relationship. Read the disclaimer.