2026 Estate Tax Changes for Massachusetts Families
For families across Massachusetts, 2026 is shaping up to be an important year for estate planning. Federal estate tax limits are scheduled to change due to the expiration of specific provisions under the Tax Cuts and Jobs Act (TCJA), and many people are wondering how these changes may impact their long-term financial decisions
Then, add Massachusetts’ own estate tax rules, which are among the strictest in the country, creating another layer of complexity to financial planning.
At Sherr Financial Associates (SFA), our team of Boston financial planners receives questions every day from individuals and families seeking to understand the potential impact of the upcoming estate tax changes on them. While every situation is unique, clear themes are emerging, and now is a good time to revisit the strategy behind your plan.
Below, we break down the most frequently asked questions we receive related to estate tax planning, and we’ll provide some basic context to help you think through the impact of the 2026 estate tax changes on you and your family.
Why are estate tax rules changing in 2026?
The TCJA raised the federal estate and gift tax exemption from $5.49 million per person in 2017 to $11.18 million in 2018, indexed for inflation, reaching $13.99 million in 2025. Absent further legislation, that exemption was scheduled to decline to roughly $7 million per person in 2026, which is close to the inflation-adjusted dollar amounts of pre-2018 levels.
This scheduled “tax sunset” triggered a wave of questions from people we met with, such as:
- “What is the estate tax exemption expected to be in 2026?”
- “How will the lowered exemption impact my estate plan?”
- “Does this change affect gifting strategies for high-net-worth families?”
Due to the passing of the One Big Beautiful Bill Act, rather than falling, the exemption will rise to one of the highest levels ever enacted. For Massachusetts residents, this means most households will remain well below the federal threshold. However, because the Massachusetts estate tax exemption remains $2 million, many estates may still face state-level exposure even when they owe no federal estate tax.
Comparing the OBBBA tax changes to existing federal estate taxes starting in 2026
Here’s a look at how the One Big Beautiful Bill Act (OBBBA) will affect federal estate taxes starting in 2026, and which major tax provisions would otherwise have expired (“sunsets”) but are now extended, changed, or eliminated.
It makes numerous tax provisions from prior law permanent that would otherwise have expired at the end of 2025, most notably individual tax rates and the extensive estate/gift tax exemption. Some new breaks added by the bill are temporary and scheduled to end in 2028 unless extended by Congress.
- Federal estate, gift, and generation-skipping transfer (GST) tax exemptions:
- Starting January 1, 2026, the unified federal estate, gift, and GST tax exemption is set at $15 million per individual and $30 million for married couples (with portability). These amounts will be indexed for inflation in future years.
- Under prior law (TCJA of 2017), the elevated exemption (around $13.99 million for 2025) was scheduled to expire at the end of 2025 and revert to roughly half that amount. The OBBBA prevents that drop and locks in the higher threshold.
- Permanence of exemption amounts
- Unlike the sunset under prior law, the increased exemption level is considered permanent unless future legislation changes it.
Other Key “Tax Sunset” Items Addressed by OBBBA
The OBBBA addresses many tax rules that were initially scheduled to expire at the end of 2025 due to an earlier law (not just the estate tax). Major examples include:
- Individual income tax rates and deductions: The individual income tax rates enacted in 2017, which were set to expire at the end of 2025, are now made permanent.
Expanded standard deduction and certain itemized deduction features are also preserved under the new law. - Charitable contribution rules: New and modified charitable deduction rules (including a deduction for non-itemizers) take effect in 2026 as part of the law’s changes.
- Temporary deductions and credits: Certain tax breaks created by the OBBBA itself (e.g., deductions for tips and overtime pay, auto loan interest deductions, and special senior deductions) are temporary and scheduled to expire in 2028.
- State and local tax (SALT) deduction cap: The SALT deduction increase to $40,000 (from the prior $10,000 cap) is now effective, but generally reverts to $10,000 after 2029 under the terms of the law.
- Clean energy and vehicle credits: Many clean energy tax credits and incentives that existed under prior law have been eliminated or phased out with various sunset dates (some ending by late 2025 or mid-2026).
How does Massachusetts’s estate tax interact with federal changes?
This is one of the most frequent questions we hear from families in Boston and the surrounding communities. The mix of federal rules, state thresholds, and upcoming 2026 adjustments leaves many wondering how the pieces will all fit together.
“Does Massachusetts still have its own estate tax?”
Yes. Massachusetts continues to impose its own estate tax, which operates independently of the federal system. Even when federal rules change in 2026, state-level regulations will not automatically change. Families often assume that if they’re under the federal exemption, they’re in the clear, but Massachusetts tax rules still apply based on the state threshold.
Many estates that owe nothing at the federal level are still subject to taxation in Massachusetts. This is why working with Boston tax and estate planning professionals who understand both systems can be crucial.
“Is the threshold really as low as I’ve heard?”
The short answer is yes. Recent legislation raised the Massachusetts estate tax threshold from $1 million to $2 million, but it remains well below the current federal exemption level. For the estates of people who die on or after January 1, 2026, the federal estate tax exemption is set at $15,000,000 per individual. For a married couple, this means a combined exemption of up to $30,000,000 before the federal estate tax applies. This reflects recent federal tax law changes and IRS inflation-adjusted figures.
That gap is the source of much of the confusion. A couple with a home in Greater Boston, retirement accounts, and other savings can cross the $2 million mark easier than you might think.
Massachusetts also taxes the entire estate once it exceeds the threshold, not just the amount above it, so understanding your factual exposure matters. Families are often surprised at how quickly their estate enters taxable territory at the state level, even while remaining far below current federal limits.
If my net worth is close to the projected 2026 exemption, should I reconsider my estate plan?
The answer depends on various factors, including timing, liquidity needs, family structure, charitable goals, and tax considerations. SFA typically encourages clients to revisit their plans every few years, or whenever there are likely significant changes in the tax code
Do trusts still play a role in Massachusetts estate planning?
Trusts remain frequently used tax and estate planning tools that help answer questions such as:
- “Can a trust help manage estate tax exposure?”
- “Do I need to update an old trust before 2026?”
- “Is a revocable trust enough in Massachusetts?”
Revocable trusts can help with probate and organization, but they do not reduce estate taxes on their own. More advanced structures, such as credit shelter trusts, spousal lifetime access trusts (SLATs), irrevocable life insurance trusts (ILITs), or charitable strategies, may be part of the conversation if you want more flexibility in light of the upcoming exemption changes.
Many families created estate plans before the TCJA and have trusts drafted under the old thresholds. These documents may still be functional, but the assumptions underlying them may no longer accurately reflect current realities. Reviewing trust language with a Boston estate planning attorney and a financial advisor may help you clarify whether updates are worthwhile.
How Sherr Financial Associates (SFA) Can Help You Prepare for the 2026 Transition
Estate planning is not only about taxes. It’s about clarity, organization, and preparing your family for transitions that may occur years or even decades down the road. SFA brings a coordinated planning approach that blends financial analysis, estate guidance, and tax-aware strategy discussions.
Our team of Boston financial planners can help you:
- Review current estate documents in the context of the 2026 changes
- Understand how federal and Massachusetts rules interact
- Explore whether gifting strategies align with your broader goals
- Coordinate with attorneys and tax professionals
- Revisit long-term financial projections to see how different approaches fit
While every household is unique, the upcoming tax changes make this an ideal time to review your estate plan, especially if your assets have increased in value since your last review.
SFA is here to help you evaluate your options with clarity and confidence. Connect with us to discuss your estate planning needs.
Sherr Financial Associates does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
