Maryland has a very forgiving inheritance tax policy. In general, close family members and charities are exempt, while everyone else is taxed at a rate of 10%.

Close family members will not need to pay an inheritance tax. Maryland defines close family members as:

  • spouses
  • parents and grandparents
  • siblings
  • children and grandchildren
  • spouses of children
  • adopted children and stepchildren

Are There Any Non-Familial Exemptions?

The non-familial exemptions are:

  • Any non-profits registered with the State of Maryland
  • Inheritance of less than $1,000
  • The proceeds of a life insurance policy
  • The deceased’s primary residence

The final exemption is where the estate is small. If the estate is worth less than $30,000, no inheritance tax is levied by Maryland.

Gifts Made Prior to Death

Gifts made 2 years prior to death are gifts made in contemplation of death. These gifts will be taxed.

Tax Payments

Tax is 10 percent of the clear value of the estate, which is the gross value minus any expenses. The executor or administrator of the estate must file an inventory with the probate court to see what the deceased owned. The county register normally notifies the executor or administrator of the estate. If the executor or administrator do not pay, then the inheritors will be responsible. Taxes must be paid before distribution of the estate.

If the inheritors are indigent and cannot pay the inheritance taxes, then the inheritors may set up a payment plan with the State.

Consulting an Attorney

Please consult a Maryland estate lawyer if you are confused about the probate process or if there is a contested will. Additionally, an estate lawyer well versed in estate taxes can help you save money.