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Important inheritance laws you should know in Maryland

On Behalf of | Jul 19, 2022 | Heirs & Beneficiaries |

Maryland has rules for how it will divide the estate in situations in which a decedent doesn’t leave behind a will. There is also an inheritance tax that non-family members may have to pay if they are a beneficiary in a will among many other inheritance laws.

Inheritance tax

Maryland could charge an estate tax and an inheritance tax. Depending on the size of the estate, estate tax ranges from 0% to 16%. The inheritance tax rate is 10%. Most residents won’t have to worry about the federal estate tax because that typically only applies to estates valued at $11.8 million or more. Estate taxes apply to the entire estate whereas inheritance taxes are individual.

Spouses, children, parents, grandparents, siblings, step-parents, step-children, lineal descendants of the decedent and spouses of children or lineal descendants of the decedent are exempt from Maryland’s inheritance tax. The primary residence of a couple in a domestic partnership is exempt from inheritance tax. Another important aspect of estate administration to know is when you give away an asset within two years of your death Maryland considers it part of your estate and will tax the recipient unless they are exempt from the state’s inheritance tax.

Intestate succession

If you die without a will, then intestate succession law determines what happens to your estate. It would go to your surviving spouse if you have no surviving children or parents. When a decedent has a child who’s a minor, half of their estate may go to their surviving spouse and the other half to their child. Otherwise, your estate goes to your children when there’s no surviving spouse.

In situations where you have a spouse and adult children, then your spouse receives $15,000 plus half of the remaining estate. The leftover would go to your descendants.

Legally adopted children have the same inheritance rights as biological children. If you have step-children, you would need to legally adopt them in order for them to receive part of your estate through intestate succession. Children who were born outside of the marriage are also able to receive an inheritance under Maryland’s intestate succession law.

Maryland has numerous laws around inheritance to determine how much of the decedent’s estate family would receive if the decedent died without a will. The state also charges a small inheritance tax for beneficiaries of an estate who aren’t lineal descendants.