Assets that are transferred to either your spouse or to charitable organizations are not subject to immediate estate taxes. Assets passing to other individuals will be taxed if the net value of those assets exceeds the specified exemption amounts. However, significant estate taxes can be saved by proper estate planning.

Currently in 2010, the exemption amount for Massachusetts is $1 million while there is an unlimited exemption for Federal estate tax purposes.  This means that your estate will not be subject to any federal estate taxes this year no matter how much money you have.  However, if your estate is greater than $1M, you will have to pay Massachusetts estate taxes.

It is important to keep in mind that estate taxes are NOT paid by the beneficiaries.  It is paid by the estate and whatever is left over after paying taxes is the amount that goes to the beneficiaries.  Beneficiaries do not have to fear that they will have to pay out of pocket for their loved one’s taxes.