Massachusetts has an estate tax for any estate larger than $1,000,000 and the top marginal tax rate is 16%.
Life insurance policies directly owned by an individual who dies as a Mass resident has the total of their life insurance proceeds included in their gross estate for the estate tax computation.
Life insurance in Massachusetts is exempt from income tax in most situations. If the death benefit is paid to the beneficiary in installments, the interest earned is subject to income tax. If the death benefit has interest earnings in addition to the face amount, the interest may be taxed. And if the face amount is cashed in before death, there are some tax implications for the policy owner.
Aside from that, however, life insurance is not charged income tax as long as the beneficiary is a person, trust, or other entity.To avoid paying income tax, do not make the beneficiary the estate.
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Life insurance policies directly owned by an individual who dies as a Mass resident has the total of their life insurance proceeds included in their gross estate for the estate tax computation.
Aside from that, however, life insurance is not charged income tax as long as the beneficiary is a person, trust, or other entity.To avoid paying income tax, do not make the beneficiary the estate.