Massachusetts Estate Tax
This newsletter highlights Federal Estate Tax. In addition to the Federal Estate Tax Exemption, we also have a Massachusetts Estate Tax. Our Massachusetts exemption was recently increased to $2M. This increase recognizes the jump people have in the value in their real estate in the Commonwealth. Despite market slow down the values are holding to a significant degree. For example, if you own a home and it is valued at $1.7M, it plus your assets could put you over the $2M threshold and there would be a Massachusetts estate tax even if there is no federal estate tax. The tax rate on assets where there is more than $2M counts from the first dollar, and could be between four and sixteen percent. So, planning should be considered.
There is another consideration for Massachusetts residents in the $2M-5M estate bracket. That is how the cost of a need for longterm care can impact these estates, and what to do about it. We at Lannik Law have a specialty in the area of “elder law” and are able to assist clients with planning that not only deals with estate taxes, but also considers and helps to manage longterm care costs. Most people who visit us are shocked to learn that RELIABLE care at home may cost between $48,000-$60,000 per year more; care in an assisted living facility can cost up to $11,000 per month or $132,000 per year; and skilled nursing care can run ups to $18,000 per month or $216,000 per year. The average stay in a facility is now up to about four years. Thus the fee for one person in s nursing home would be $864,000 and for two $1,728,000. We can help ameliorate these costs by proper planning. Although planning should be done before the catastrophe hits, we have many clients that wait too long and we can assist some of them as well. We do urge you to seek our guidance, counsel and planning sooner rather than later for the best result in saving your estate.