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Estate Tax Planning

State and Federal Estate Tax Planning Attorney

Planning to minimize estate taxes is an important part of estate planning for many people in Massachusetts, since Massachusetts estate tax is due on any estate worth more than $1 million. Your gross estate includes not only your bank and investment accounts but also the value of your home, life insurance and all retirement accounts (IRAs, company plans, etc.). Particularly in areas where real estate values are high, many people have taxable estates without feeling the least bit "rich." The federal estate tax is 45%, which in 2008 applies to estates over $2 million.

At Kraft Law Offices, we discuss a variety of tax-saving strategies that are right for your specific life situation, so you can choose what is best for you. To learn more about the alternatives for reducing or eliminating taxes, contact a knowledgeable estate tax planning lawyer at Kraft Law Offices in Boston.

For most people, the first step in estate tax planning is to establish a revocable living trust (RLT) to ensure you take full advantage of both the Massachusetts and federal estate tax exclusion, and maximize the amount you pass on to your beneficiaries. With a RLT, you retain full control over your assets, their management and investment decision, and you can revoke or change the terms of the trust at any time.

Once your estate exceeds the threshold for paying tax, you should consider more elaborate strategies for minimizing the tax due. There are numerous types of irrevocable instruments, including life insurance trusts, charitable remainder trusts, qualified personal residence trusts, and grantor-retained income trusts that facilitate the transfer of assets to individuals and/or charities, where only a fraction of the full value of the asset is used to compute the tax.

Life insurance trusts are an excellent way to complete a tax-free transfer of wealth at your death or to provide funds to pay the estate taxes that are due. Since same-sex spouses and unmarried partners receive no social security survivor benefits at the death of their spouse or partner, a life insurance trust also can be particularly useful to create a substitute stream of payments that ensure the economic security of your surviving spouse or partner.

If you own a business and plan to pass it on to family members or other beneficiaries, trusts can be used in conjunction with your business structure to help make sure the business remains intact and continues to thrive after you are gone.

When you work with an estate tax planning attorney from Kraft Law Offices, we will explain the advantages and disadvantages of each approach in terms you understand, so you can make an informed decision on how you want to proceed. For additional information about the options available for minimizing or eliminating both state and federal estate tax liability, contact us in Boston.