Estate Taxes and Inheritance Taxes in Maryland
There are plenty of reasons to love Maryland. Its weather lasts long enough in each season for you to enjoy them but not for the weather to become tiresome; we get enough snowfalls to allow for a few snowy selfies, but not enough that you feel you are enduring month after month of dreary sludge. You are close enough to the Chesapeake Bay and to Amish Country that, within a single day’s foodie road trip, you can seek out both the best crab cakes and the best pretzels. If you choose to live out your final days in Maryland because your loved ones are here, you will leave your family and friends with many happy memories. When the closest people in your life administer your estate in probate and inherit property from you, though, they will be in for an unpleasant surprise. Not only does Maryland charge estate taxes on high-net-worth estates during probate, but it also collects taxes from some beneficiaries on inherited wealth. For advice on how to leave property to your family and friends without leaving your heirs with an enormous tax burden, contact a Washington, D.C. estate planning lawyer.
Estate Taxes on Multimillion Dollar Estates
Maryland imposes an estate tax on the most valuable estates. If your net worth is less than a million dollars, you do not have to worry about estate taxes. You might even be able to brag that you are just a small-time millionaire, rich enough to enjoy your good fortune but of sufficiently modest means to fly under the radar of the IRS. If the value of your estate exceeds $5 million, though, your estate will be subject to estate tax, which the estate must pay before it settles. The rate of estate tax varies according to the value of the estate, beginning at $0.8 percent for a $5 million estate and going all the way up to 16 percent for the largest estates.
Friends and Distant Relatives Pay Taxes Even on Small Amounts That They Inherit
Most states do not charge inheritance taxes, but Maryland does. First-degree relatives, such as the spouse, sons, daughters, and siblings do not have to pay taxes on their inheritance; neither do lineal descendants, such as grandchildren and great-grandchildren. Extended family members such as nieces, nephews, and cousins must pay inheritance taxes, and so must friends whom the decedent includes as beneficiaries of his or her will. The rate of inheritance tax is ten percent, no matter how big or small. This means that, if a generous professor leaves $1,000 each to 50 of his former students in his will, each student must pay $100 in taxes on the inheritance and only gets to take home $900.
Contact Tobin O’Connor Concino P.C. About Being Generous Without Subjecting Your Heirs to Burdensome Taxes
A Washington, D.C. estate planning attorney can help you implement strategies to prevent your heirs from having to pay a lot of money in estate taxes and inheritance taxes. Contact Tobin O’Connor Concino P.C. in Washington, D.C. or call 202-362-5900.
Source:
registers.maryland.gov/main/taxes.html
