MA Estate Tax

Submitted by Michael Gregory on Sat, 2019-12-28 22:18

Dear Master Po, I have a basic understanding of how the MA estate tax works and have the same basic understanding of how an A/B trust would benefit a married couple in allowing them to use their individual 1M exemption. My question is, what if a person is single, can he or she still establish a trust to take advantage of their 1M exemption. Instead of this single person leaving 1M in trust for a spouse, can they establish a trust for a brother, or a friend and thereby use their 1M MA exemption. So now if this person was worth 1.9M at death with 1M of the 1.9M going to their trust, this would leave .9M taxable estate in MA. I believe the result would be no MA estate tax due. Thank you so much for your answer – grasshopper.



Submitted by Alan - IRA critic on Sat, 2019-12-28 22:30

An A/B or bypass trust is only available to spouses. It is highly unlikely that MA would maintain any exception to this.

Submitted by Michael Gregory on Sun, 2019-12-29 01:31

Thank you for your quick tesponse. If I understand you correctly a single person with a taxable estate at death worth over 1M and who is MA resident has no way to “use” his 1M exemption by establishing  a trust for a non spouse beneficiary. 

Submitted by Alan - IRA critic on Sun, 2019-12-29 02:03

Your question is best addressed to a MA licensed trust attorney. There might possibly be a way to do it, but not with an AB trust since those are limited to spouses.

Submitted by Bruce Steiner on Sun, 2019-12-29 04:16

  • A and B are archaic terms for the marital and credit shelter (bypass) (family) trusts.  The credit shelter trust is intended to shelter the exempt amount (and the income and growth thereon during the spouse’s lifetime) from being included in the spouse’s estate, while keeping it available for the spouse if he/she ever needs it.
  • If you’re providing for someone other than a spouse (in your example, a brother or friend), the $1 million Massachusetts exempt amount (or the $11.4 million Federal exempt amount) isn’t a limit.  You can leave your entire estate in trust for your sibling or friend so that it won’t be included in that person’s estate.  Of course, you won’t get a marital deduction in your estate, but once you’ve paid the estate tax on your estate, the assets will remain out of your beneficiaries’ estates for a long time.
  • Bruce Steiner

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