Law Office of Robin Gorenberg
Estate Planning Alert:
2 Major Law Changes
Estate Tax Update



The Senate and House have both passed the new tax law, which, once signed by President Obama, will include raising the federal estate tax credit to $5 million, with a 35% tax on the excess (effective 1/1/2011). The new law will also allow "portability" between spouses, which means that a married couple essentially has a $10 million federal estate tax credit. This increase will only be effective for 2011 and 2012, scheduled to go back down to a $1 million credit (55% on the excess) in 2013, but will likely be revised before then.

I will be sending out another Newsletter in the next few weeks with more specific information on the estate tax laws.



Even though the federal estate tax will be less (or zero), MA residents still have to worry about the MA estate tax, since the MA estate tax is still effective for estates over only $1 million (not set to change).  The $1 million is just a "threshold", meaning that if your estate exceeds $1 million, the entire estate is taxed in MA, up to 16%.  For example, for a $2 million estate (including real estate, liquid assets, retirement plans AND the full value of life insurance), the MA estate tax would be over $100,000. 

It is very important for MA residents, married or single, to learn about Trusts and other techniques to reduce the MA estate tax and pass more on to their intended beneficiaries.


Massachusetts Homestead Law

Following a 10-year effort seeking greater protection for homeowners, a new Homestead law has been passed in MA!

The primary changes are:

- Provide $125,000 of automatic protection to any primary residence (without having to record a Homestead); provide $500,000 protection for those who record a Homestead.

- Allow Homestead protection for Trusts!  This means that you no longer need to decide between the benefits of transferring your house into a Trust to avoid probate and/or reduce estate taxes AND the creditor protection of the Homestead.  For those of you who have opted to not re-title your home in order to benefit from the Homestead, you should now consider re-visiting this issue.


- Clarify that refinancing a mortgage will not terminate or invalidate previously filed homesteads.

Message from Attorney
Robin Gorenberg

There will be an upcoming Newsletter with more information about the estate tax law changes.

Feel free to view my prior Newsletters for more detailed information about the federal and MA estate tax, as well as information about basic estate planning documents, such as Wills, Powers of Attorney and Health Care Proxies. 

Robin Gorenberg, Esq.

(617) 731-9924

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