Happy Wednesday!!! This Sunday, I will be participating in HOPEWalks, a fundraising event to support Newton-Wellesley Hospital's Vernon Cancer Center. As many of you know, the Vernon Cancer Center has been instrumental in helping the Antonellis family. Over the past two years the Cancer Center has treated my husband David’s mother, grandfather, and great uncle. The Center went above and beyond to provide comfort and compassion and we could not be more proud to support such a wonderful program. If you are interested in learning more about the Vernon Cancer Center or HOPEWalks please visit our team's fundraising page: https://giving.nwh.org/theateam. I want to thank everyone for their incredible support for this event.
This week we are going to talk about taxes. Massachusetts, has a $1 million dollar estate tax exemption. Every person can have a $1 million dollars in assets before they are penalized with taxes. However, every single dollar after the $1 million dollar mark is taxable to the Commonwealth.
While $1 million can seem like a lot of money it's important to keep in mind that we are not talking about liquid assets. By the time many couples think about their income, their retirement, a house, two cars, and a few investments, it's actually quite easy to reach a million dollars. There is however a way for married couples to turn their $1 million dollar exemption into a $2 million dollar exemption.
The easiest way for married couples to double their estate tax exemption is through a bypass trust. With a bypass or (credit shelter) trust, upon the death of the first spouse, you shelter the exemption amount ($1 million) and everything over the exemption amount is secured through a marital trust. When the surviving spouse passes, they then get to use their $1 million dollar exemption, and can then add the first to die's exemption to their own, instantly giving the estate a $2 million dollar cushion before they have to pay any estate tax.
This is an excellent planning tool not only to save on taxes, but also to provide asset protection for your family. With such a low tax threshold a little planning up front can make a world of difference. It's easier than you think to have combined assets over $1 million.
So, if you know of anybody who may need to fit some tax planning into their estate plan please have them give us a call. Lastly, please don't forget to think about "The A Team" this Sunday as we're sending a strong signal of HOPE to those battling with cancer. Until next time.
Wishing you and your family a safe journey, Amy