"The state they retired in does not exempt them from estate taxes, leading to a six-figure Massachusetts estate tax bill if they pass away with their current estate structure."
"The personally-owned $500,000 life insurance policy increases the taxable estate to $4 million, significantly raising the state estate tax exposure."
"High-savings households often assume that being under the federal threshold means they are done planning, which can lead to costly surprises in states with their own estate taxes."
"Massachusetts begins taxing estates over $2 million, and Oregon starts at $1 million, with rates climbing quickly, highlighting the importance of state tax considerations."
Two retirees with $3.5 million in assets face significant state estate taxes in Massachusetts and Oregon. The inclusion of a $500,000 life insurance policy raises their taxable estate to $4 million. While they owe no federal estate tax due to the high exemption, Massachusetts imposes a tax on estates over $2 million, resulting in a potential $182,000 tax bill. Oregon's threshold is even lower at $1 million. Many high-savings households mistakenly believe they are exempt from estate taxes based solely on federal thresholds.
Read at 24/7 Wall St.
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