Maryland Inheritance Laws: When someone passes away in Maryland without leaving a will, that situation will be called “intestate.” In this circumstance, Maryland law resolves this issue and decides who is going to inherit the property of the person who has died (also known as the decedent). In order to help you out in understanding the Inheritance Laws of Maryland, we have gathered some crucial information that will be helpful for you.
Table Of Contents
- 1 About Maryland Inheritance Laws
- 2 Inheritance Tax or Estate Tax: What Does Maryland Have?
- 3 Inheritance Tax & Estate Tax: What’s the Difference?
- 4 Inheritance Tax
- 5 Estate Tax
- 6 Assets Passed by Intestate Succession
- 7 Maryland Intestacy Law Overview
- 7.1 Decedent Having Children but No Spouse
- 7.2 The Decedent Has a Spouse but no Surviving Parents or Children
- 7.3 The Decedent has a Spouse and Children (minors- under 18)
- 7.4 The Decedent has a Spouse and Children (not minor)
- 7.5 The Decedent has a Spouse and Surviving Parents but No Children
- 7.6 The Decedent has living Parents but no Spouse or Children
- 7.7 Decedent having siblings, but no spouse, children, or living parents:
- 8 Some Other Specifics about Maryland Intestacy Law
About Maryland Inheritance Laws
Maryland collects the Inheritance Tax when certain recipients inherit property from someone who lived in Maryland. Some close relatives and charities are exempt from the Tax while other inheritors Pay at the 10% Rate. The Maryland inheritance tax is 10% of the “Clear Value” of the inherited property. The Clear Value means the fair Market value of the Property, less certain expenses. The Powerful representative needs to file ab inventory of the Deceased Person’s Property.
Inheritance Tax or Estate Tax: What Does Maryland Have?
Whether it’s Inheritance Tax or Estate Tax, Maryland has both. However, there are many families in the state which usually don’t consider the federal estate tax due to the exceedingly high $11.18 million estate exception that the federal government currently charges for the tax.
On the other hand, the Maryland citizens or the individuals who own property in Maryland should take note that they should keep Inheritance Tax as well as the Estate Tax while considering the estate planning. At the present date, the Maryland Inheritance Tax rate is 10 percent, while the estate tax is a rate that usually goes up ranging from 0 percent to 16 percent, on the basis of the current estate size.
Inheritance Tax & Estate Tax: What’s the Difference?
Usually, the dissimilarity between the estate tax and the inheritance tax is that the estate tax has been charged to the whole estate, while it doesn’t matter who becomes heir to the same. In the meantime, the inheritance tax applies only to some heirs of an estate, as well as it is charged to the heirs, instead of to the estate itself.
In Maryland, there are some people who are exempted from the inheritance tax on the basis of their relationship to the decedent. At the present date, the property that passes to a spouse, child, step-child, parent, step-parent, grandparent, sibling, or else to another blood relative in the direct descent line, or an organization that has only people in this grouping as stockholders, is completely exempt from the inheritance tax of Maryland.
In addition to that, if a primary residence has been possessed by domestic partners and is held in joint tenure at the time of any partner’s demise then it is also exempt from the Maryland Inheritance Tax. But, if a property that passes to any other inheritor other than those mentioned is possibly affected by the inheritance tax.
Furthermore, the property that has been given away “in contemplation of death” is also affected by the inheritance tax of Maryland. In simple words, it means that if you give away your estate “material part” within 2 years of passing away, then the property that you have given away also turns out to be subject to the Maryland Inheritance Tax.
Back in the year 2018, the estate tax inception for Maryland was $4 million; however, it then increased to $5 million for the year 2019. One must take note that if the worth of your estate is worth less than the estate tax that was a starting point after the time of your death, then the estate won’t be obligated of anything to the state of Maryland.
On the other hand, for every dollar that is more than the estate tax threshold, there is an increasing tax rate that may go up to 16 percent that your estate is going to require in order to pay before your inheritors can get their inheritance. Meanwhile, starting in the year 2019, the exemption is going to be transferrable, which in simple terms means that a married couple can access a double exemption after both spouses have deceased. Additionally, starting in 2019, the Estate Tax threshold for married couples concludes up efficiently being $10 million after their passing away.
Assets Passed by Intestate Succession
The individuals should take note that the assets that would have passed through your will are the only ones that will be affected by intestate succession laws. Commonly, that consists of only those assets that you own alone, and are in your own name.
There are many-valued assets that don’t go through your will as well as those assets are also not affected by intestate succession laws such as:
- The Life insurance proceeds
- Payable-on-death accounts
- Property that you have transferred to a living trust
- The funds in an IRA, 401(k), or in any other retirement account, etc.
All these assets are going to pass to the surviving beneficiary that you have named, whether you have a will or not.
Maryland Intestacy Law Overview
Under Maryland Intestacy Law, who gets what is based on the facts whether you have a living or surviving beneficiary after your demise. To let you more aware of these situations, here’s a quick overview about the same:
Decedent Having Children but No Spouse
In this case, children will receive everything.
The Decedent Has a Spouse but no Surviving Parents or Children
Here spouse is going to inherit everything.
The Decedent has a Spouse and Children (minors- under 18)
Here spouse is going to take over ½ of an intestate property while the children will inherit everything else.
The Decedent has a Spouse and Children (not minor)
In this case, the spouse will receive the first $40,000 along with the rest of ½ of the intestate property while descendants will inherit everything else.
The Decedent has a Spouse and Surviving Parents but No Children
Here, in this case, the spouse will inherit the first $40,000 and ½ of intestate property, whereas the living parents will get everything else.
Note: However, this only implies when the spouse and the decedent have been married for 5 or less than five years. But, if the spouse and the decedent have been wedded for at least 5 years or more then in that case the spouse will get everything.
The Decedent has living Parents but no Spouse or Children
In this situation, the parents are going to inherit everything.
Decedent having siblings, but no spouse, children, or living parents:
Here siblings are going to receive everything.
Some Other Specifics about Maryland Intestacy Law
Other than the above-listed situations, if the decedent has adopted children then they will receive an intestate share just like biological children. However, foster children, as well as stepchildren, are not eligible to inherit an automatic share.
In the meantime, if the decedent does not have a will or any family at the time of his/her death, then automatically the property is going to be taken over by the state. In simple words, it means that the property is going to be forwarded to the Maryland Department of Health, or else it may go to the county board of education in the province or district where the decedent has resided.