Estate Planning in Maryland

Married with children (same marriage)

If all children are adults, the spouse receives the first $15,000 plus half the remaining estate. If any minor child survives, the spouse receives half the estate with no preferential dollar amount. Children split the rest.

Married with children from a prior relationship

The spouse receives half the estate — no preferential dollar amount when children from a prior relationship survive. Children split the other half.

Married, no children

If one or both parents survive, the spouse receives the first $15,000 plus half the remaining estate. If no parents survive, the spouse inherits everything.

Single with children

Children inherit everything equally by representation.

Single, no children

Parents inherit equally. If no parents survive, siblings inherit by representation. The chain continues through grandparents and more distant relatives.

What makes a will valid

A will must be in writing, signed by the testator (or by another person in the testator's presence and by the testator's express direction), and attested and signed by two or more credible witnesses in the presence of the testator.

What people think

That a handwritten will is valid in Maryland, or that the inheritance tax applies to all beneficiaries equally.

What actually happens

Holographic wills are not valid for civilians in Maryland. And the inheritance tax is selective — close family members (spouse, children, grandchildren, siblings) pay nothing, while non-lineal beneficiaries (nieces, nephews, cousins, friends) owe 10% on everything they receive. This distinction catches many families off guard, especially those who want to leave something to nieces, nephews, or close friends.

Common failure

Not addressing the inheritance tax implications of bequests to non-lineal beneficiaries. A $50,000 bequest to a nephew costs the nephew $5,000 in inheritance tax. The will can direct the estate to pay the tax instead, but many wills fail to address this.

When a trust is better

When estate tax planning is needed (estates approaching $5M), when managing the augmented estate elective share, when privacy matters, when managing property in multiple states, or when minimizing the inheritance tax burden on non-lineal beneficiaries.

Execution checklist

1. Sign the will with two credible witnesses present — both must sign in the testator's presence
2. Consider a self-proving affidavit for streamlined probate — though Maryland allows self-proving through proper execution alone
3. Do NOT rely on a handwritten will — Maryland does not recognize holographic wills for civilians
4. Address inheritance tax allocation in the will if any bequests go to non-exempt beneficiaries
5. File portability election (Maryland estate tax return) after the first spouse's death even if no tax is due

What it does

Grants authority to a named agent to manage financial, legal, and property affairs on your behalf.

Key rule

Maryland recognizes durable powers of attorney that survive the principal's incapacity. The document must include explicit durability language. Notarization is recommended for recording and third-party acceptance.

Real-world friction

Financial institutions may reject POAs they consider outdated, unclear, or non-standard. Using the Maryland statutory form and keeping the document recently executed reduces friction.

Common mistake

Confusing the financial POA with the advance directive for health care. They are separate documents with entirely different legal authority.

What it covers

Your preferences for life-sustaining treatment, end-of-life care, and the designation of a healthcare agent authorized to make medical decisions if you become unable to do so.

What's different

Maryland's advance directive can combine both the living will (treatment instructions) and the healthcare power of attorney (agent designation) into a single document. The state provides a statutory form.

Execution requirements

Must be signed by the declarant and witnessed by two competent adults. The healthcare agent should not serve as a witness. Notarization is not required but is recommended.

Common misunderstanding

Assuming that the advance directive covers financial decisions. In Maryland, healthcare and financial decision-making require separate documents with separate execution requirements.

When required

When assets are held solely in the decedent's name without a beneficiary designation, survivorship rights, or trust.

What makes Maryland different

Maryland probate is administered through the Orphans' Court and the Register of Wills — a court system distinctive to Maryland. But the most significant planning consideration is the double layer of death taxation: Maryland is the only state in the country that imposes both an estate tax (on estates over $5 million) and an inheritance tax (10% on non-exempt beneficiaries). The estate receives a credit for inheritance tax paid, so the same assets aren't fully double-taxed — but the combined burden is unique and requires careful planning.

Probate paths

What people get wrong

Not understanding the inheritance tax. Many families assume that because their estate is under $5 million, they don't need to worry about death taxes. But the 10% inheritance tax applies regardless of estate size — any bequest to a non-lineal beneficiary triggers it. A $100,000 bequest to a nephew costs the nephew $10,000.

When a trust is useful

When estate tax planning is needed (estates approaching $5M), when minimizing inheritance tax on bequests to non-lineal beneficiaries, when managing the augmented estate elective share, when avoiding the Orphans' Court process, or when privacy matters.

When a trust is unnecessary

Very small estates that qualify for small estate administration, or straightforward estates where all beneficiaries are exempt from the inheritance tax and the estate is well below $5M.

Key mistake

Creating a trust but not understanding that trust assets ARE included in the augmented estate for elective share purposes and may be subject to estate tax. A trust avoids probate but does not automatically reduce the tax burden without careful structuring.

Not understanding the double layer of death taxation

Maryland is the only state with both an estate tax (on estates over $5M) and an inheritance tax (10% on non-exempt beneficiaries). Many families who don't exceed the estate tax threshold still face the inheritance tax when leaving assets to nieces, nephews, cousins, friends, or unmarried partners.

Relying on a holographic will

Maryland does not recognize holographic wills for civilians. Only military personnel serving outside the US can make holographic wills, and those are automatically voided one year after discharge.

Not filing the portability election after the first spouse's death

Maryland's estate tax exemption ($5M) is portable between spouses — but only if a timely estate tax return is filed after the first death. Failing to file means the unused exemption is lost, potentially exposing the surviving spouse's estate to unnecessary tax.

Not addressing inheritance tax allocation in the will

When the will includes bequests to non-exempt beneficiaries (nieces, nephews, friends), the 10% inheritance tax is paid by the recipient unless the will directs otherwise. Many wills fail to address this, surprising beneficiaries with an unexpected tax bill.

Assuming the elective share is limited to probate assets

Maryland's elective share extends to the augmented estate, which includes non-probate assets like life insurance proceeds, retirement accounts, and revocable trust assets. Strategic use of non-probate transfers will not defeat the spouse's elective share.

Not understanding the Orphans' Court system

Maryland probate is administered through the Orphans' Court and Register of Wills — a distinctive court system with its own procedures. Families unfamiliar with this system often underestimate the filing requirements and timelines.