Estate planning carries with it many assumptions and misconceptions, more so than other areas of law. Families often arrive at an initial consultation with beliefs picked up from the internet, well-meaning relatives, or experiences in other states. Some are partially true. Others are not, and acting on them can create costly problems. Here are five of the most common misconceptions about estate planning in Massachusetts.
Misconception 1: Gifts Are Taxable to the Giver or Receiver
Families often worry that if they give money to a child or grandchild, someone will owe income tax on the transfer. In reality, gifts are not subject to a tax for either party.
Under the federal gift tax framework, an individual can give up to $19,000 per recipient per year (as of 2026) without any reporting obligation. A married couple can together transfer up to $38,000 per recipient per year.
Gifts above the annual exclusion are still not taxed at the time of the transfer. They do require reporting on IRS Form 709 (the gift tax return), and they reduce the giver’s remaining federal lifetime exemption ($15 million per person as of 2026). Until cumulative reportable gifts exceed that amount, no gift tax is owed. Massachusetts does not impose its own gift tax on gifts made during life, regardless of the amount.
Misconception 2: A Will Avoids Probate
This is perhaps the most persistent misconception in estate planning. A will governs the probate process and the assets subject to probate. A will does not avoid probate, although it can make probate easier. It is the document that tells the Probate and Family Court how to distribute assets that pass through the court process.
In Massachusetts, when a person dies with a will, the Personal Representative files the will with the court, the court admits it to probate, and the estate is administered through the probate process. Assets titled in the decedent’s individual name, with no beneficiary designation and no joint owner, must go through this process regardless of whether a will exists.
What a will does accomplish: it names a Personal Representative, nominates guardians for minor children, and provides instructions for distributing probate assets. Without a will, these decisions fall to Massachusetts intestacy law. A will makes probate more organized and predictable, but it does not eliminate probate.
The tools that actually keep assets out of probate include revocable trusts (for assets retitled in the trust’s name), beneficiary designations (for retirement accounts, life insurance, and POD/TOD accounts), bank accounts with surviving joint owners, and joint ownership of real estate with rights of survivorship.
Misconception 3: The Person Named as Executor Holds That Role Automatically
Many assume that once a will names someone as executor (Personal Representative in Massachusetts), that person immediately has authority to act. However, a will is a nomination, not an appointment.
Only the Probate and Family Court can appoint a Personal Representative. A nominee’s powers commence upon appointment and issuance of Letters of Authority. Appointment requires submitting the necessary probate forms to the court, submitting the will, if any, and notifying MassHealth. Until the court issues Letters of Authority, the nominee has no legal power to access accounts, sell property, or make distributions.
This distinction matters in practice. Banks and financial institutions will not release assets to someone who claims to be the executor without court-issued Letters of Authority. Informal probate in Massachusetts (the most common track) typically produces Letters of Authority within a few weeks if the paperwork is filed correctly and promptly, and no one contests the appointment.
For families with properly funded revocable trusts, this gap is less significant because the successor trustee can act immediately under the trust terms without court involvement.
Misconception 4: Revocable Trusts Provide Creditor Protection for the Grantor
This misconception comes from a reasonable but incorrect leap of logic. Many people believe that if trust assets are protected from beneficiaries’ creditors, that they are also protected from the grantor’s creditors. Unfortunately this is not the case, and relying on this belief can be costly.
A revocable trust provides no creditor protection for the person who created it (the grantor) during their lifetime. Because the grantor retains the power to revoke the trust and reclaim the assets, creditors can reach those assets as if the trust did not exist. This principle is well established in Massachusetts law and in the Uniform Trust Code.
After the grantor’s death, when the trust becomes irrevocable, spendthrift provisions can protect a beneficiary’s interest and distributions from the beneficiary’s creditors before receipt by the beneficiary. However, assets of a trust that was revocable at the grantor’s death remain reachable by the grantor’s creditors.
A revocable trust offers many benefits during the grantor’s lifetime (probate avoidance, incapacity management, control), but creditor protection for the grantor is not one of them.
Misconception 5: Revocable Trusts Are Expensive and Burdensome to Maintain
Some families hesitate to establish a revocable trust because they assume it will require ongoing legal fees, separate tax filings, and administrative overhead. In practice, a revocable trust is one of the least burdensome legal structures a family can create.
During the grantor’s lifetime, a revocable trust is generally taxed as a grantor trust and may report under the grantor’s Social Security number without a separate tax return.
The setup cost varies by firm, but a revocable trust as part of a comprehensive estate plan is generally modest relative to the benefits it provides. There are no annual filing fees, no state registration requirements, and no ongoing legal costs unless the trust is amended. Compare this with an LLC or corporation, which requires annual reports, a registered agent, and separate tax filings.
The real cost is the effort of funding it, which may require retitling accounts, recording new deeds, and updating beneficiary designations. But this is a one-time process (with periodic updates as new assets are acquired), and it is what makes the trust effective. An unfunded trust provides almost none of the benefits it was designed to deliver.
Planning Ahead
Misconceptions about estate planning may lead to inaction, which is the most expensive outcome of all. Families who delay planning based on incorrect assumptions often leave their loved ones with problems that proper planning would have prevented.
Massachusetts families considering an estate plan, or reviewing one they already have, can schedule a consultation with RackiLaw to separate fact from common misconception. Understanding the foundational concepts is the first step toward a plan that works for you.
References
IRC § 2503(b) (annual gift tax exclusion)IRC § 2513 (gift-splitting between spouses)IRC §§ 671 through 679 (grantor trust rules; income tax treatment of revocable trusts)Treas. Reg. § 1.671-4 (grantor trust reporting methods)MGL c. 65C (Massachusetts estate tax; no separate state gift tax)MGL c. 167D, § 3 (deposit account survivorship)MGL c. 184, § 7 (joint ownership and survivorship for real estate)MGL c. 190B (Massachusetts Uniform Probate Code)MGL c. 190B, §§ 2-101 through 2-103 (Massachusetts intestacy statute)MGL c. 190B, § 3-103 (court appointment of Personal Representative)