Massachusetts has no estate tax portability. Leaving everything to each other can permanently waste one spouse’s $2 million threshold.
A married couple in Massachusetts can permanently throw away two million dollars of estate tax protection by doing the most natural thing in the world: leaving everything to each other.
The trap is in a place you would never think to look. Here is how it works, step by step.
Two people, two $2 million thresholds
Every person who dies a Massachusetts resident has their own $2 million threshold. It works through a $99,600 credit that applies to the estates of people who died on or after January 1, 2023 — which is why an estate at exactly $2 million owes nothing. Two people, two thresholds. So a married couple, in principle, has four million dollars of room.
In principle.
What happens at the first death
Take the ordinary case. The husband dies first, and his will leaves everything outright to his wife. Simple, loving, and extremely common.
There is no Massachusetts estate tax at his death, because transfers to a spouse generally pass under the marital deduction. So far this looks fine. Nobody sends a bill.
But look at what happened to his threshold. He did not use it. He had no reason to use it, because the marital deduction handled everything.
Why Massachusetts has no portability — and why it matters
Can his wife use his unused $2 million when she dies later? Federally, yes. A surviving spouse can carry over the unused portion of the first spouse’s federal exemption. That is called portability.
A $3.5 million example, side by side
Say a Massachusetts couple has a home, retirement accounts, and life insurance that come to $3.5 million together. Here is the shape of the difference. It is conceptual on purpose: the actual tax depends on deductions, on how the estate is composed, and on the Massachusetts rate table, so no single figure would be right for every family.
| Everything outright to the survivor | Plan uses the first threshold | |
|---|---|---|
| At the first death | Generally no Massachusetts tax (marital deduction). First threshold unused. | Generally no Massachusetts tax. Assets up to the first threshold held in a credit shelter structure for the survivor’s benefit. |
| Thresholds used | One | Two |
| At the second death | The entire $3.5 million sits in one estate, with one $2 million threshold. | Assets in the credit shelter structure are generally outside the survivor’s estate; one threshold still applies to the rest. |
| Result | Substantially more exposed to Massachusetts estate tax. | A substantial portion of that exposure could have been addressed. |
The difference between one threshold and two is not a rounding error. It is the difference between a plan and an expensive accident.
What credit shelter provisions do
The general concept is that the plan does something at the first death, rather than leaving everything to the survivor outright. Structures exist that let the first spouse’s threshold actually get used, while still supporting the surviving spouse for the rest of their life. You will hear them called credit shelter provisions, bypass provisions, or family trust provisions. Different lawyers use different names for closely related ideas.
This has to be built in advance. After the first death, the moment has largely passed. There is no Massachusetts election to fix it afterward. In some cases a surviving spouse can use a qualified disclaimer, generally within nine months, to route assets in a way that uses the first threshold — but whether that works depends on the documents, and it is not something to build a plan around.
Why titling can defeat good documents
Having the right documents is not enough. These structures depend on how assets are titled and who is named on beneficiary forms.
If everything the couple owns is held jointly with right of survivorship, it may pass automatically to the survivor regardless of what the will says — and the structure you paid for never gets used. The same is true when the spouse is the named beneficiary of every account and policy.
If your documents were written before 2023
If your documents were written before 2023, they were built around a $1 million threshold, because that is what Massachusetts had then. The threshold moved to $2 million. Formulas written for the old number do not always behave the way you would want under the new one.
That is not a reason to panic. It is a reason to have someone read them.
Massachusetts has no gift tax — with one catch
Massachusetts does not tax gifts when they are made. That makes lifetime giving an unusually effective tool here compared with states that do, and it is a lever many couples never use because they assume gifts are taxed.
The catch: the Department of Revenue requires a Massachusetts estate tax return if the gross estate plus adjusted taxable gifts exceeds $2 million. Gifts above the federal annual exclusion ($19,000 per recipient in 2026) can therefore count toward the filing line even though they were never taxed when made. Federal gift rules still apply, and gifted property generally keeps the giver’s tax basis instead of getting a step-up at death — which can matter more than the estate tax saved.
Frequently asked questions: Massachusetts estate tax for married couples
Does Massachusetts have estate tax portability?
No. Under federal law a surviving spouse can carry over the unused portion of the first spouse’s federal estate tax exemption, which is called portability. Massachusetts has no equivalent. A first spouse’s unused Massachusetts threshold cannot be claimed by the survivor later.
How much can a married couple pass free of Massachusetts estate tax?
Each Massachusetts resident’s estate can pass up to $2 million without Massachusetts estate tax, because of a $99,600 credit that applies to estates of people who died on or after January 1, 2023. A married couple can benefit from both only if the plan uses the first spouse’s threshold at the first death.
What happens if I leave everything to my spouse in Massachusetts?
Transfers to a surviving spouse generally pass under the marital deduction, so there is usually no Massachusetts estate tax at the first death. But the first spouse’s $2 million threshold goes unused, and because Massachusetts has no portability, the survivor’s estate has only one threshold at the second death.
What is a credit shelter trust?
A credit shelter trust, also called a bypass or family trust, is a structure that holds assets at the first death in a way that uses the first spouse’s threshold while still supporting the surviving spouse. The assets in it are generally not counted in the survivor’s estate at the second death. Different lawyers use different names for closely related ideas.
Can joint ownership defeat a credit shelter trust?
Yes. A credit shelter structure only works if assets are available to fund it. Assets held jointly with right of survivorship, or with the spouse named as beneficiary, may pass directly to the survivor regardless of what the will or trust says, leaving the structure empty.
Should Massachusetts estate plans written before 2023 be reviewed?
They are worth having someone read. Documents written before 2023 were built around the old $1 million Massachusetts threshold. Formulas written for the old number do not always behave the way you would want under the $2 million threshold. That does not mean they are broken.
Does Massachusetts have a gift tax?
No. Massachusetts does not tax gifts when they are made. But a Massachusetts estate tax return is required if the gross estate plus adjusted taxable gifts exceeds $2 million, so gifts above the federal annual exclusion can still count toward the filing threshold. Federal gift rules still apply, and gifted property generally keeps the giver’s tax basis.
Can a surviving spouse fix it after the first death?
There is no Massachusetts election that restores an unused threshold. In some cases a surviving spouse can make a qualified disclaimer, generally within nine months of the death, so that assets pass in a way that uses the first spouse’s threshold. Whether that works depends on the documents and who inherits if the spouse disclaims, so it is not something to build a plan around.
What a video and an article cannot tell you
Whether any of this applies to you depends on what you own, how your deed reads, and what your existing documents already say.
If you want someone to read the documents you already have and tell you whether both thresholds are actually protected, that is what a consultation is for. Bring the worksheet if you have filled it in.
Sources
- Massachusetts Estate Tax Guide, Department of Revenue
- Massachusetts General Laws, Chapter 65C (Massachusetts Estate Tax)
- Form M-706 Instructions (dates of death on or after August 1, 2025)
About the author
Joseph F. Botelho, Esq. is an estate planning attorney at Botelho Law Group in Fall River, Massachusetts, advising families on estate tax planning, trusts, wills, and probate throughout Massachusetts. Botelho Law Group was founded in 2005.
Attorney Advertising. General information about Massachusetts law only, not legal advice about your plan. Reading this article or watching the video does not create an attorney-client relationship. Prior results do not guarantee a similar outcome. Tax laws change and every situation is different; consult a licensed attorney about your own circumstances.