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Federal and state estate taxes

Natick, MA |

If a person makes a gift over $13,000 to another person and then dies within 3 years, will the amount of the gift be included back in the estate and possibly be subject to federal and Massachusetts estate taxes?

I should add that the assets are held in a revocable trust if that makes a difference.

Attorney Answers 3


  1. Only someone who is actually reviewing your specific estate or tax situation can give you a reliable answer. Generally, however, gifts made during the lifetime of the gift-giver must be included and calculated as part of their lifetime gifting total. Whether there will be any tax due depends entirely on the numbers. If you need assistance probating an estate, or discussing lifetime gifting strategies, you should reach out to an attorney.


  2. If I am correct, anything in a revocable trust will be added back to your estate. You have not really relinquished control over the assets.

    Christopher Larson
    Insight Law
    www.insightlawfirm.com


  3. The question is a bit ambiguous (is the donor holding them in trust for the recipient, or the recipient holding them in trust form him/herself or others), but in either case, the answer is is that all gifts, even those under $13,000, will be brought back into the gross estate.

    Federally, if the decedent was the settlor of the trust, there was no completed gift, so all of the property in trust is treated as never having been given away. If all of the property was given away, section 2035 of the Internal Revenue Code brings the value of ALL property given away within three years of death, as well as any gift taxes paid on those gifts, back into the estate, then credits the gift taxes paid against the ultimate estate tax bill.

    Attorney Rosenberg is admitted to practice in Connecticut and Massachusetts, and currently practices in South-Central Connecticut with an emphasis on estate planning, elder law, probate, and tax matters. He may be contacted confidentially by email at Scott@ScottRosenbergLaw.com or by phone at (203) 871-3830. All correspondence through this website appears publicly, is not confidential, and does not create an attorney-client relationship between you and Atty. Rosenberg. Discretion should always be employed when posting personal information online. ~~~~~~~~~~~~~ All online content provided by Atty. Rosenberg on this and other websites is provided for general informational purposes only, and does not constitute legal advice. All content is general in nature. Attorneys are unable to ask the questions necessary to fully understand the legal issues faced by any particular poster. Postings and responses to questions only provide general insights on the topic discussed. They are not tailored to any reader’s specific situation, will not be accurate in all states, and are never updated or maintained to reflect changes in the law. No person should take action based on the information provided by anyone on Avvo.com or any other law-themed website without first consulting a local attorney with significant experience in your area of concern. Persuant to Circular 230, no online content may be used by any person to avoid taxes or penalties under the Internal Revenue Code.

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