Massachusetts doubles inheritance tax breaks.

According to attorneys Sarah Wells, Laura Lerner and Matthew Tudino, this law would also reduce the inheritance tax on state estates worth more than $2 million by nearly $100,000.

Unlike the federal tax deduction, the Massachusetts tax deduction "does not take inflation into account and is not portable between spouses. That is, the first spouse to die by date must utilize the Massachusetts inheritance tax deduction by transferring assets worth $2 million to persons other than the testator's spouse, or to certain types of trusts for the benefit of the testator's spouse or others, or that spouse's deduction will be forfeited," say the attorneys at Morgan' s firm'Lewis.

In addition, "the value of real estate and tangible assets located outside Massachusetts will be included in a Massachusetts resident's tax base under the new law," the attorneys note. "However, the amount of inheritance tax payable in Massachusetts will be reduced in proportion to the value of assets located outside Massachusetts relative to the total gross value of the inheritance," they write.

For example, if the inheritance tax payable by a Massachusetts resident (including assets located outside Massachusetts) is $100,000 and the assets located outside Massachusetts are 20% of the total gross value of the inheritance, the tax payable will be reduced by 20% to''80,000 dollars,' attorneys tell

.

Since the law was passed Oct.

4, the Massachusetts Department of Revenue "has not yet published amended forms and instructions for the inheritance tax," the attorneys say. "If an inheritance tax return for a person who died this year has already been filed, a refund should be requested based on the new $2 million deduction. "

For inheritance tax returns due in the coming weeks and months, "it may be prudent to file an extension while the Department of Revenue is in the process of issuing amended forms," say attorneys at the firm Morgan Lewis.