The executor or personal representative you choose to administer your estate after your death will have many responsibilities.
One of those is the payment of the estate taxes under Massachusetts law, but is payment required of every decedent’s estate?
Meeting the guidelines
Your personal representative is responsible for filing a Massachusetts Estate Tax Return if the gross value of your estate is more than $1 million. Adjustable taxable gifts also figure into this amount. This is a serious undertaking, and the state can hold your personal representative personally liable if the tax remains unpaid.
If you do not appoint a personal representative, whoever is in possession of your property upon your death will become the responsible party in terms of paying this tax. If your estate qualifies for the Massachusetts tax, the tax return and associated payment are due within nine months of the date of your death.
Effective since Dec. 5, 2016, an extension of up to six months for filing a Massachusetts Estate Tax Return is available as long as your representative has paid 80% of the total tax due. The extension is only available for reasonable cause and interest on the unpaid portion will apply.
Another reason for the timely payment of the tax is that receipt by the state will trigger the release of the automatic lien that arises on any real property you own when you die. The release is essential in order to obtain a clear title so that a proper sale or transfer of property can occur. The Certificate Releasing Massachusetts Estate Lien applies to real estate that is either owned jointly, as tenants by the entirety, held in trust or not subject to probate but included in the gross estate.
The good news about the Massachusetts estate tax is that estates are exempt if their value falls below the $1 million threshold. For estates that do qualify for payment under the state law, proper planning is key to minimizing the impact or even eliminating the need to pay this particular tax altogether.