TRUST AND ESTATE
existing Massachusetts estate tax law, and a case addressRecent Massachusetts the ing the ability of the court to include a spendthrift trust as a marital asset in a divorce proceeding. All of these developmeaningfully impact estate planners and their clients Tax and Estate Planning ments in Massachusetts but also may have broader ramifications. Developments Millionaire’s Tax 3
By Elizabeth Lindsay-Ochoa1 and Jaclyn G. Feffer2 Elizabeth Lindsay-Ochoa and Jaclyn G. Feffer provide a synopsis of Massachusetts’ new Millionaire’s Tax, amendments to its estate tax laws, and a case which included a spouse’s interest in an irrevocable trust for the purposes of equitable division upon divorce. This past year has seen important legal developments for tax and estate planning in Massachusetts. There has been the implementation of a new millionaire’s tax, a significant change to
In 2022, the millionaire’s tax was voted into law, to be implemented as of January 1, 2023. This imposed an additional 4% annual income tax on Massachusetts tax filers whose reporting income is greater than $1 million in any given year. Under the law, the Massachusetts individual income tax rate for income over $1 million is increased (i) from 5% to 9% on wages, long-term capital gains, dividends, interest and other income and (ii) from 8.5% to 12.5% on short-term capital gains. To reduce income on the return, there was an option for married taxpayers to elect to file their income tax returns as married filing separately, regardless of how they filed at the federal level. In October 2023, Governor Healey of Massachusetts signed legislation (described in additional detail below) which now
Published in eReport, Fall 2023 / Winter 2024 © 2023-2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
FALL / WINTER 2024
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