Massachusetts Estate Tax Cases

Last updated: 18 Oct 2025 • Author: Alexander Foelsche CPA (US), WP (DE), RE (CH)

Massachusetts Estate Tax — Cases & Authorities

Authorities-first “case notes” for recurring Massachusetts estate tax issues. Each note points to the controlling statute, regulation, or official DOR guidance so you can verify positions before filing Form M-706 or requesting a lien release.

Scope. Massachusetts estate tax is governed primarily by M.G.L. c. 65C and regulations at 830 CMR 65C. In 2023, Massachusetts enacted a major reform: a $2,000,000 exclusion and a credit mechanism that eliminates the former “cliff”. DOR issued technical guidance and updated M-706 instructions accordingly.

Authority Note 1 — Framework & 2023 Reform ($2M Exclusion; Anti-Cliff Credit)

Data: M.G.L. c. 65C (as amended 2023); DOR Technical Information Release & M-706 instructions (current year).

Issue in brief: Whether a Massachusetts estate owes tax and how to compute liability post-reform.

Rule/Holding: For decedents on/after Jan 1, 2023, apply a $2,000,000 exclusion and a credit that prevents tax from exceeding the amount above $2M (eliminates the pre-2023 “cliff”). Computation still uses a federalized base with Massachusetts-specific adjustments per c.65C and 830 CMR.

Comment: Confirm year-specific brackets and the credit worksheet in the current M-706 instructions. Prior-year decedents (before 2023) remain under the old regime unless otherwise directed by DOR guidance.

Authority Note 2 — State-Only QTIP; Portability Not Allowed

Data: M.G.L. c. 65C; 830 CMR 65C; DOR directives/rulings; M-706 instructions (QTIP schedules).

Issue in brief: May an estate elect a Massachusetts-only QTIP separate from the federal return, and is portability available?

Rule/Holding: Massachusetts permits a state-only QTIP election on a timely M-706 even if no federal QTIP is made. Massachusetts does not allow federal-style portability of DSUE. Property elected into MA QTIP is includible in the survivor’s Massachusetts estate by reference to federal inclusion concepts.

Comment: Attach a detailed asset schedule with income rights and governing instrument citations. Track basis and later inclusion for the survivor’s M-706.

Authority Note 3 — Nonresident Situs & Apportionment

Data: M.G.L. c. 65C (nonresident provisions); DOR M-706 instructions (apportionment worksheets).

Issue in brief: What portion of a nonresident’s estate does Massachusetts tax?

Rule/Holding: Compute estate tax as if the decedent were a Massachusetts resident, then apportion by a fraction that generally limits tax to Massachusetts-situs real property and tangible personal property. Intangibles (stock, bank accounts) of nonresidents are generally excluded unless a Massachusetts business situs is established.

Comment: Keep strong evidence of physical location at death and of any within-one-year transfers of MA real/tangible property. Entity interests are typically intangibles—avoid facts creating Massachusetts business situs.

Authority Note 4 — Filing Deadlines, Extensions & Payment

Data: M.G.L. c. 65C (returns & due date); DOR administrative guidance; M-706 instructions.

Issue in brief: When to file and pay; how extensions work.

Rule/Holding: Massachusetts estate tax return M-706 is generally due 9 months after date of death. DOR may recognize extensions to file (often by attaching IRS Form 4768 approval or via MA procedures). Time to pay is separate; interest accrues on unpaid tax.

Comment: Use the latest instructions for mailing, e-pay options, and payment vouchers. Retain proof of timely filing and payment.

Authority Note 5 — Automatic Lien & Discharge

Data: M.G.L. c. 65C (lien provisions); DOR lien/discharge procedures; Registry practice.

Issue in brief: How the estate tax lien affects sales/refinancings and how to clear title.

Rule/Holding: An estate tax lien attaches to Massachusetts real and tangible property at death and is released upon satisfaction/certification of tax or by recorded discharge issued pursuant to DOR procedures. Title companies typically require a Certificate of Release/Discharge before closing.

Comment: If a sale is pending, coordinate early with DOR and the Registry to avoid recording delays. Provide proof of filing/payment or acceptable security per DOR instructions.

Practice tip. If no M-706 is required but closing counsel requests comfort, consult DOR’s procedure for statements or clearances in lieu of a full return—requirements vary by facts and year of death.

References (Primary Sources)

M.G.L. c. 65C — Massachusetts Estate Tax (as amended, incl. 2023 reform and $2M exclusion).
830 CMR 65C — Department of Revenue Regulations (estate tax computation, elections, apportionment).
Massachusetts Form M-706 & Instructions — current year (computation, credit/anti-cliff worksheet, QTIP schedules, apportionment).
DOR Technical/Administrative Guidance on 2023 estate tax changes (exclusion & credit mechanics; refunds/retroactivity notes).
DOR lien/discharge instructions; Registry of Deeds recording practices for estate tax releases.