Federal Estate Taxes

The federal estate tax is confusing to most people. A knowledgeable attorney can help you figure out how it will affect you and how to plan for it.

At the Boston-area law firm of Cushing & Dolan, P.C., we have been helping people with their estate planning and tax needs since opening our doors in 1984. Our founding lawyer, Leo J. Cushing, is also a certified public accountant and is well-skilled to provide comprehensive tax advice. For more information, contact us today to schedule a free consultation to have your questions answered.

The federal estate tax imposes a tax on the transfer of wealth on death. The rate of this tax is currently 40 percent for estates created in 2013. Without proper planning, this tax can be quite significant and have a severe impact on someone's estate. Fortunately, there are deductions and exclusions from this tax.

First, there is an unlimited marital and charitable estate tax deduction. This means that a person may transfer an unlimited amount on death to a U.S. citizen spouse or charity, and such transfer will not be subject to the estate tax (with certain limitations). As a result, in many estate plans, where the deceased spouse seeks to benefit entirely the surviving spouse on death, there is no federal or state estate tax due. However, when the second spouse dies, the tax may be significant (when there is no surviving spouse to pass the money to).

The tax law provides an exemption on transfers of wealth to a non-spouse. The amount of this exemption is currently $5.25 million per person and is indexed for inflation. 

Current law also provides for "portability," which means that if the first spouse to die does not fully utilize the exemption, it may be transferred to the surviving spouse. We can help you facilitate these transfers successfully.

This wide disparity in the exemption amount, and the general volatility of the tax law, can make estate planning very complex, since a person's date of death triggers what law takes effect. It is therefore prudent to plan.

Please e-mail us or call 617-523-1555 to arrange a free consultation at one of our seven convenient locations in the Greater Boston area.