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: 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.