Cody & Cody, LLC
One Pine Hill Drive
Batterymarch Park II, Fifth Floor
Quincy, MA 02169
Tel: 617.472.5151
Fax: 617.472.5252
January 2003
Dear Clients and Friends:
As you may know or may not know, former Governor Jane Swift, before she left office, signed the "Act Enhancing State Revenues". Among its many provisions was a change to the Massachusetts Estate Tax Exemption. Effective January 1, 2003, the Massachusetts Estate Tax Exemption will be reduced from $1,000,000 to $700,000. The chart below shows how the tax due will increase as the Federal Estate Tax Exemption increases.
Year |
Massachusetts Exemption |
Federal Exemption |
Massachusetts Estate Tax for an estate equal in value to the Federal Exemption |
| 2003 | $ 700,000 |
$1,000,000 |
$ 33,200 |
| 2004 | $ 850,000 |
$1,500,000 |
$ 64,400 |
| 2005 | $ 950,000 |
$1,500,000 |
$ 64,400 |
| 2006 | $
1,000,000 |
$2,000,000 |
$ 99,600 |
| 2007 | $
1,000,000 |
$2,000,000 |
$ 99,600 |
| 2008 | $
1,000,000 |
$2,000,000 |
$ 99,600 |
| 2009 | $
1,000,000 |
$3,500,000 |
$
229,200 |
| 2010 | $
1,000,000 |
Unlimited |
As you can see by the above chart, the Massachusetts Estate Taxes that would be due to the Commonwealth would be significant to anyone with an estate over $700,000. The good news is that we can change this result with an amendment to your trust. However, there is no uniform solution. Therefore, each case will require a decision based on your personal circumstances.
What should you do?
This change in the law will require all of our clients to examine their plans. Anyone, whether single or married, with a net worth of greater than $700,000 will need to consider making changes to their estate plan. As it is advisable to review your plan every few years, anyway, we have developed two options, outlined below in more detail, that should allow everyone to do so at a reduced cost.
While we would prefer to meet with all of our clients to discuss these changes (especially those that we have not seen in a long time), we realize that this may not be possible for all of you. Accordingly, we are offering everyone the ability to have their plan reviewed by us without requiring a meeting. Regardless of which option you choose, we ask that you complete the enclosed net worth statement in order to give us the best opportunity to properly advise you. If you keep your net worth documented in another form, we are happy to have you send that to us instead.
1. Schedule a Meeting - Clients may call our office or e-mail Mary Plourde at mary.plourde@cody-cody.com to arrange for a meeting with one of the attorneys in the office. We will charge a reduced hourly rate of $50 to meet with you to discuss your plan. We will recommend changes and quote flat fees for any work necessary. If the only change recommended is an amendment to your trust to address the decrease in the Massachusetts Estate Tax Exemption, the flat fee will be $500.
2. Correspond by Mail - Clients may send in their forms and ask us to comment on their estate plan and present options without meeting in person. We will charge $100 to examine your plan in light of the tax law change and your current circumstances. We will outline our recommended changes in a letter to you and quote flat fees for the work involved. If the only change recommended is an amendment to your trust to address the decrease in the Massachusetts Estate Tax Exemption, the flat fee will be $500.
As you have invested a significant amount of time, money and energy to create your plan, we encourage you to take advantage of this opportunity to review it. We look forward to hearing from you.
Sincerely,
Michael T. Cody Jamie Nadeau Cody
On behalf of Cody & Cody, LLC