Estate Tax Return Preparation

Amy Mello has vast experience working with the preparation of Massachusetts, Rhode Island and federal estate tax returns for residents and non-residents of Massachusetts and Rhode Island. It is important to understand that n estate tax is a tax on your right to transfer property at your death.

It is levied on the transfer of a person’s assets after death. There are three aspects of the Federal Estate Tax that must be addressed, including Estate Taxes, Gift Taxes and Generation-Skipping Transfer Taxes. Working with an experienced attorney to plan for Estate Tax Preparation can help to minimize or avoid Federal Estate Taxes as a part of an overall approach to proper Estate Planning.

Automatic Estate Tax Lien

One of the most often overlooked aspects of Estate Tax Return Preparation is the automatic estate tax lien that attaches to any real estate that is located in Massachusetts and in Rhode Island when a property owner dies. No notice of this lien is sent and it creates a cloud on the title to the real property. It attaches even if the owner was a resident of another state when he or she died. The automatic estate tax lien may be removed in one of two ways in both states:

  • In Massachusetts, if the gross estate of the decedent – wherever it is located – plus the total of his or her lifetime taxable gifts was $1 million or less, then a statutory affidavit may be prepared, executed and recorded in the registry of deeds where the property was located; if the decedent’s gross estate, plus lifetime taxable gifts, is more than $1 million, then a Massachusetts Estate Tax Return must be prepared and filed within nine months of the decedent’s death and any tax due must be paid in order to receive a release of lien from the Massachusetts Department of Revenue for recording at the registry of deeds.
  • In Rhode Island, an Estate Tax Return must be filed for a person who died on January 1, 2015 or after, with a gross estate of more than $1.5 million, and any tax due must be paid in order to receive a recordable discharge of a lien. For lesser estates, there is an Estate Tax short form that must be filed with the Rhode Island Division of Taxation.

Estate Tax Return

If a decedent’s estate has no real estate, but exceeds the foregoing estate tax filing thresholds, $1 million and $1.5 million respectively, an Estate Tax Return must nonetheless be prepared, filed and, any estate tax due, must be paid within nine months of death. In the Estate Tax context, assets includes tangible personal property, cash and securities, bank accounts, real estate, trusts, annuities, IRAs, life insurance – including life insurance proceeds payable as the result of the decedent’s death, business interests, and other assets. The Federal Estate Tax exclusion amount was $5.43 million in 2015 and is $5.45 million for 2016.

It is important to work with an experienced attorney to represent you and your loved ones throughout the process of estate planning, including Estate Tax Return Preparation. Please contact Amy Mello Law to request a consultation to discuss issues relating to Estate Planning and Estate Tax Return Preparation.