Does Non-Probate Property Count For The Massachusetts Estate Tax?

Massachusetts has an estate tax that applies to estates that are valued at $2 million or higher. Notably, non-probate property still counts towards the estate tax. Within this article, our Boston estate planning attorney explains the key things to know about non-probate property and the Massachusetts estate tax.

Massachusetts Estate Tax Applies to More Estates than the Federal Estate Tax 

First and foremost, it is important to emphasize that Massachusetts estate tax applies to more estates than does federal law. The filing threshold sits at $2 million for an individual. That is in sharp contrast to the federal exemption which is $15 million for 2026. Once the gross estate meets or exceeds that amount ($2 million), the estate must file a Massachusetts estate tax return. Estate tax liability in the Commonwealth is calculated under a graduated rate.

How Property is Classified in Massachusetts: Probate vs. Non-Probate 

Massachusetts distinguishes between probate and non-probate assets for purposes of administration. That classification controls how property transfers at death. It does not control whether the property is included in the taxable estate. Here is an overview:

• Probate Property: Probate property consists of assets titled solely in the decedent’s name without a beneficiary designation or survivorship feature. Real estate held individually, bank accounts without payable-on-death designations, and personal property fall into this category. These assets pass through the Commonwealth’s formal probate process.
• Non-Probate Property: Non-probate property transfers automatically by operation of law or contract. Probate is not needed. Jointly held property with rights of survivorship will pass to the surviving owner. Payable-on-death accounts and transfer-on-death registrations move directly to named beneficiaries. Retirement accounts and life insurance proceeds distribute pursuant to beneficiary designations. Assets held in a revocable trust pass under the terms. 

Non-Probate Property Does Count for the Massachusetts Estate Tax 

Massachusetts calculates estate tax based on the decedent’s gross estate, not on the probate estate. The gross estate concept mirrors federal principles. It captures the value of all property in which the decedent held an interest at death, including many non-probate transfers. Joint accounts, revocable trust assets, retained interests in transferred property, and certain lifetime gifts pulled back under federal inclusion rules all factor into the taxable base. 

Estate Planning Strategies to Reduce Value of Estate 

Massachusetts estate tax planning focuses on reducing the taxable estate before death or shifting value in a controlled manner. Lifetime gifting removes future appreciation from the estate. Alternatively, irrevocable trusts can transfer assets while limiting retained interests that would otherwise be included. An experienced Boston estate planning lawyer can help you develop the most advantageous asset protection strategy for your specific circumstances. 

Speak to Our Boston Estate Planning Lawyer Today

At Fisher Law LLC, our Massachusetts estate planning attorney puts people and families first. If you have any questions about the Commonwealth’s estate tax, please do not hesitate to contact us today or a completely confidential, no obligation initial appointment. We provide estate planning services in Boston, Suffolk County, Norfolk County, and throughout the region.