SimplyTrust Knowledge Base

A: Inheritance tax is different from estate tax. The estate pays estate tax before distributing assets, while a recipient pays inheritance tax after they inherit. Historically, Minnesota used both.Minnesota’s inheritance tax dated back to the early 20th century. The state introduced it as a way to generate revenue by taxing wealth transfers, especially large ones. The tax applied to people who received property or assets from someone who had passed, with rates based on the value of the inheritance and the relationship to the deceased.Close family members, like children or spouses, often paid lower rates or were fully exempt. More distant relatives or unrelated heirs paid higher rates.

A: Minnesota is one of only a few states that still imposes its own estate tax (although no inheritance tax). The state introduced this tax in 1905, shortly after the federal estate tax was first enacted. Over the years, the rules have shifted significantly—especially in recent decades.Originally, Minnesota followed a system known as a "pick-up tax," collecting an amount equal to the state death tax credit allowed under federal law. But in 2001, the federal government phased out that credit. In response, Minnesota "decoupled" from the federal system in 2002 and began administering its own separate estate tax program.Since then, the state legislature has periodically updated the exemption threshold. In 2014, for example, lawmakers passed a bill gradually increasing the exemption amount over several years. As of 2025, the exemption sits at $3 million, far lower than the federal exemption of over $13 million.

A: Functionally, revocable trusts in Massachusetts versus Nevada work alike. Assets in the trust typically bypass probate, which can reduce time, cost, and paperwork for those you leave behind. Neither state treats a basic revocable trust as a shield from personal creditors while you’re alive. A key divider between revocable trusts in Massachusetts versus Nevada is state transfer taxes, specifically estate tax. Massachusetts imposes one with a $99,600 credit that effectively shelters the first $2 million for dates of passing on or after January 1, 2023. (Although no inheritance tax.) Nevada, by contrast, has no state estate or inheritance tax. That means residents typically face only federal rules. Another difference between revocable trusts in Massachusetts versus Nevada is the property system each state uses. Nevada is a community-property state and allows community property with right of survivorship. This can deliver a favorable “double” step-up in basis at the first spouse’s passing under federal law—useful for future capital-gains planning inside a revocable trust. Massachusetts follows separate-property rules, so only the decedent’s portion typically receives a step-up.

A: Massachusetts once imposed taxes on “legacies and successions” under Chapter 65—what many would call an inheritance tax. Over time, key provisions in Chapter 65 were repealed, reflecting a shift away from taxing heirs directly. The big turning point came in the 1970s. In 1975, the Legislature enacted Chapter 65C, creating a Massachusetts estate tax for people passing on or after January 1, 1976. This move effectively supplanted the older inheritance-style system with a levy on the estate itself. So any conversation about inheritance tax in Massachusetts today is really about estate tax.

A: Navigating the process of claiming inherited assets can feel overwhelming, especially during an emotional time. If you’ve recently lost a loved one, understanding the necessary legal steps to claim property, bank accounts, and investments is essential. From obtaining a death certificate to determining whether a will exists, knowing the right steps can streamline the process and reduce potential stress.

A: States use estate or inheritance taxes to raise revenue from large estates and to keep the overall tax system progressive—asking more from larger accumulations of wealth. Massachusetts retains an estate tax (and not an inheritance tax) for these reasons, while relying on state-level rules rather than federal thresholds. For context, only very large estates face the federal estate tax, while Massachusetts estates can owe at much lower levels. Who files: If the gross estate exceeds $2 million, the estate generally files Form M-706 and computes the Massachusetts estate tax using state instructions, even if no federal estate tax return is required. Threshold/credit: A $99,600 credit effectively shields the first $2,000,000 from tax for dates of passing on/after Jan. 1, 2023. Amounts above $2 million follow the Massachusetts tables. Residents vs. nonresidents: Massachusetts taxes the Massachusetts portion of an estate. Recent changes also updated how out-of-state property factors into the calculation for residents.

A: When it comes to estate planning, naming your spouse as the beneficiary of your IRA might seem like a no-brainer. However, it’s not always the best option. In fact, there are several compelling reasons to think twice about this common choice. For instance, if your spouse already has sufficient assets, you may want to direct your IRA funds to your children or a charity instead.

A: Both states allow revocable living trusts, but there are a couple things to keep in mind.Maryland taxes revocable trusts as grantor trusts, which means income from the trust is taxed to the person who created it. Meanwhile, the state levies income, estate, and inheritance taxes. In fact, Maryland is the only state in the union that has both an estate tax and an inheritance tax. Therefore, there are no state-specific tax benefits to establishing a revocable trust in Maryland. Meanwhile, Nevada is a trust and tax powerhouse. It offers flexible trust administration rules, some of the best trust privacy protections in the country, strong asset protection, and easy trust modification through its decanting laws. Meanwhile, the state does not levy an income, estate, or inheritance tax. The state is the best choice for many people setting up trusts, even if they don’t live in the state. (Yes, you can set up a trust in Nevada no matter where you live in the United States.)

A: Have you ever thought about what will happen to your assets after you’re gone? If you don’t have a clear estate plan, you could be setting your family up for disputes. Without a valid Will, your assets may be distributed according to state laws that might not align with your wishes, leaving your loved ones in confusion and conflict.

A: While many people confuse it with the estate tax, the two are entirely different. The estate tax is paid by the estate. The inheritance tax is paid by the person receiving the assets, depending on their relationship to the person who passed.The Maryland inheritance tax is a tax on the right to receive property from someone’s estate. It applies to most types of inherited property—including money, real estate, personal belongings, and even business interests—unless the recipient is exempt. The tax rate is 10% of the value of the inherited property, and it applies only to non-exempt beneficiaries. That means who inherits the assets matters just as much as what they inherit.Maryland exempts many close family members from inheritance tax. These beneficiaries do not pay: spouses, children (biological, adopted, or stepchildren), parents and grandparents, siblings, grandchildren, and spouses of children and grandchildren. Everyone else, however, is generally subject to the tax: nieces and nephews, cousins, friends, unmarried partners, and in-laws.