Massachusetts taxpayers know that the federal government raised tax rates for personal and investment incomes for wealthy individuals effective for 2013 tax returns. The tax changes were in part implemented to fund the President's health care plan. While this hike in income tax rates will only affect individuals making more than $400,000, the new marginal rate will affect trusts making more than $11,950 a year. This change in tax law may create challenges for estate planners.
In an action that affects Massachusetts residents and citizens all across the country, Congress passed the American Tax Relief Act of 2012. Included in that law are provisions for transfer taxes or taxes on an estate.
People in Massachusetts and throughout the nation who neglect to create a last will and testament may instead be creating potential relational and financial disasters. Some people believe that a handwritten note will direct the proper distribution of assets, but this is not necessarily true. Without a valid will, a deceased person's property will be distributed under the laws of intestacy of the state having jurisdiction over the estate, and this may very well not be in accord with the decedent's wishes.
Massachusetts readers, along with the rest of the country, may be following the news of the recent death of star Philip Seymour Hoffman. It turns out that the Oscar-winning actor left his estate paperwork in miserable shape. Experts guess that between almost $12- $15 million of his estimated $35 million estate could end up going to pay taxes.