Updated on January 26, 2024

When it comes to handling estate matters in Maryland, understanding the state’s estate tax laws is crucial. Dealing with inheritance, especially in the context of estate taxes, can be complex. In this blog, we’ll explore the need-to-know information about Maryland estate tax inheritance to help you navigate this often intricate area of financial planning.

Maryland Estate Tax Basics

Maryland is one of the states in the U.S. that imposes an estate tax. The Maryland estate tax is separate from the federal estate tax, so it’s important to be aware of the differences and how they may apply to your situation.

1. Maryland Estate Tax Exemption

The Maryland estate tax exemption is the threshold at which an estate becomes subject to state estate taxes. As of January 2024, Maryland’s exemption was set at $5 million per individual. Estates valued at or below this amount were not subject to Maryland estate tax. It’s important to note that exemption amounts can change, so it’s advisable to verify the current exemption threshold, which may have been adjusted since then.

2. Maryland’s Inheritance Tax

Maryland also has an inheritance tax, which is different from the estate tax. The inheritance tax applies to certain individuals who inherit property from an estate. The relationship between the deceased and the inheritor plays a significant role in determining whether the inheritance tax applies.

  • Spouses, parents, children, and grandchildren are exempt from the inheritance tax.
  • Other relatives and unrelated individuals may be subject to the inheritance tax, which can be as high as 10%.

3. Combined Federal and State Estate Tax Implications

While the federal estate tax applies to larger estates (over $13 million per individual as of January 2024), Maryland’s estate tax can affect a broader range of estates. This means that individuals in Maryland with estates under the federal threshold may still need to plan for Maryland estate taxes.

4. Estate Tax Planning

Estate tax planning is essential to minimize tax liability and ensure that your assets are distributed according to your wishes. Strategies such as gifting, creating trusts, and utilizing the marital deduction can be effective ways to manage estate tax obligations.

5. Seek Professional Advice

Navigating Maryland’s estate tax laws and inheritance tax regulations can be complex, and the laws can change over time. Therefore, it’s highly advisable to consult with experienced professionals, such as estate planning attorneys and certified public accountants like the experts at Goldin Group CPAs.

Conclusion

Understanding Maryland estate tax inheritance is vital for anyone involved in estate planning, whether you’re an individual preparing your estate or an heir receiving an inheritance. The specific regulations and exemption thresholds can change, so staying informed is essential.

At Goldin Group CPAs, we have a team of tax preparation experts well-versed in Maryland’s estate tax and inheritance tax laws. We can provide personalized guidance to help you navigate the complexities of estate planning, minimize tax liabilities, and ensure a smooth transition of assets to your beneficiaries.

In the world of estate planning, knowledge is power, and professional guidance is invaluable. Contact Goldin Group CPAs today to ensure that your estate and your heirs are well-prepared for Maryland’s estate tax inheritance regulations.