Q: I have a real estate trust. There are 15 properties deeded to it, I’m the sole trustee and my wife is the beneficiary. When I pass will estate taxes be due. Massachusetts has a $1 million exemption. The properties are worth about $3 million today. No mortgages… If I live another 30 years they could be worth $10 million by then. How much can this estate tax burden be to the IRS and Mass then? Can this be avoided and how?
A: There would most likely be no federal estate taxes and possibly Massachusetts state estate tax. If the value of the trust is under $1mil then there would be no state estate tax due. If the assets grow to over a million then Massachusetts estate state tax would be due. If there is growth potential, then I recommend you see an estate planning attorney. Some immediate planning would be to use your $5.34 mil, the current estate tax exclusion amount, in an exemption trust (assuming you have not gifted assets) and leave the rest to your wife to receive a marital deduction. Your estate can be structured in several different ways and is more involved than a quick reply, which is why involving an estate planning attorney licensed in Mass would be the most important first step.