Monthly Archives: June 2014

The Current Status of Estate and Inheritance Taxes in Maryland

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Author: Charles F. Fuller

At some point in time, many of us are confronted with the issue of whether or not to have tax planning included in our estate plan, i.e., within a will or trust. Dating back to 2002, the Maryland Legislature decided that Maryland would impose its own estate tax, separate from the federal estate tax. This process was known generally as “decoupling.” As a result, since 2002, decedents in Maryland were subject to an estate tax at the rate of 16% on assets in excess of $1 million. A married couple with appropriate estate tax planning could shield up to $2 million in assets from the Maryland estate tax.

During the 2014 legislative session, the Maryland Legislature amended the Maryland estate tax law. Over the next several years, the amount of assets that a decedent must have before the Maryland estate tax is imposed upon them will increase until this amount is equivalent to the amount exempt from Federal estate taxation. Under the new law, effective January 1 of each year, the amount of assets exempt from Maryland estate taxes will increase as follows:
Year Assets Exempt From Tax
2015 $1.5 Million
2016 $2 Million
2017 $3 Million
2018 $4 Million
2019 Equal to the Amount of Assets Exempt Under Federal Estate Tax Law
Currently, it is projected that in 2019 both Maryland and Federal estates will be free from estate taxes so long as a decedent’s estate does not have assets exceeding $5.9 million. The estate tax is paid by the estate, and the personal representative is responsible for filing the necessary estate tax returns and paying the required estate taxes.

While Maryland has changed its estate tax laws, its inheritance tax has not been changed. Currently, Maryland imposes a 10% inheritance tax on both probate and non-probate property that passes to certain beneficiaries who are not exempt from the tax. As a general rule, close family relatives are exempt from the inheritance tax in Maryland, and all others receiving property are subject to the tax. The group that is exempt from the tax includes the following family members of a decedent: a surviving spouse, parents and grandparents, children and other lineal descendants, spouses of children and other lineal descendants, stepparents, stepchildren, brothers and sisters, and corporations where all of the stockholders consists of the above exempt family members. It is important to note that this tax applies to property received by non-exempt beneficiaries that was jointly owned with the decedent at the time of death and to transfers made by the decedent within two years of death. Thus, inheritance taxes are imposed upon persons who receive an interest in property from the decedent outside of their estate. The inheritance tax is often paid by the personal representative prior to distributing property to the beneficiary. If there is no estate to be administered or if the personal representative does not pay the tax prior to distribution, the beneficiary is liable for payment of the inheritance tax directly to the Register of Wills in the county of the decedent’s residence or where the property is located.

Although the law has changed recently in regards to the Maryland estate tax, it can still be very important for you to include in your estate plan appropriate tax planning to avoid the imposition of the estate tax while the exemption amount is being incrementally increased. Further, it may be important to plan gifting and other transfers of property in order to attempt to avoid the imposition of the Maryland inheritance tax.

Please feel free to contact me or any of the other attorneys at McChesney & Dale at (301) 805-6080 if you have questions regarding the Maryland estate or inheritance taxes.

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2014 Estate Planning Discount

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Author: Shameka Sterling

McChesney & Dale Announces New Special Discount

McChesney & Dale, P.C., now offers a 10% discount on estate planning services for government and military employees. This discount is valid from 06/01/2014 to 12/31/2014 and will apply to all Maryland state and local government employees, as well as personnel of all branches of the U.S. military.

Preparation of estate planning documents now will free your family members from having to make tough choices for you in the future and also minimizes the risk of family conflict. McChesney & Dale can assist with the preparation of last will and testaments, powers of attorney, living will/advance medical directives, and trusts.

Call McChesney & Dale today for your estate planning needs; it’s never too early to get started! Please reference coupon code EP2014 during your initial consultation.

Discount Details:

10% off Estate Planning
Valid: 6/01/2014 – 12/31/2014
Coupon Code: EP2014

Police/Fire/EMS, Teachers, Federal Government Employees, MD State Employees, MD Local Employees (cities/counties within MD)

Army, Navy, Coast Guard, Marines, Air Force, Peace Corp

For more information on estate planning, follow the links below.

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