Living Trust Attorney in Maryland — Estate and Inheritance Taxes, Probate and Trust Planning

Maryland is the only state with both an estate tax and an inheritance tax. This guide from a living trust attorney in Maryland perspective explains both taxes, how Maryland probate works and how trusts help.

A living trust avoids probate. However, it does not avoid Maryland's inheritance tax or estate tax by itself. Nevertheless, a properly structured trust can reduce estate tax for married couples. Therefore, planning matters.

How Maryland probate works

Maryland probate is handled by the Register of Wills and the Orphans' Court in each county. The personal representative files inventories and accounts and notifies creditors.

For small estates below a set limit, with a higher limit when a spouse is the sole beneficiary, Maryland offers small estate administration. Our Probate Documents service helps.

Maryland estate tax

Maryland taxes estates above $5 million. The Maryland exemption is portable between spouses in some circumstances, but planning is still important. Consequently, families with substantial assets should review their exposure.

A credit shelter trust or other trust planning can help married couples. A living trust consultation explains the options.

Maryland inheritance tax

Maryland also has an inheritance tax, generally 10%, on assets passing to beneficiaries who are not close relatives. Spouses, children, grandchildren, parents and siblings are generally exempt.

Assets in a revocable trust are still subject to inheritance tax. Therefore, if you leave assets to nieces, nephews or friends, plan for the tax.

Funding your trust in Maryland

A trust only avoids probate for assets it actually owns. Therefore, funding is the step that makes everything work.

Real estate

Maryland homes are transferred to the trust by deed, recorded in the county land records. Transfers into your own revocable trust are generally exempt from transfer and recordation taxes when correctly documented. Make sure the homestead credit continues.

Accounts, retirement and insurance

Next, retitle bank and brokerage accounts into the trust's name, or add the trust as the payable-on-death beneficiary where allowed. Retirement accounts usually stay in your name with beneficiary designations instead. Similarly, life insurance can name the trust or individuals.

Personal property

Finally, an assignment of personal property moves household items into the trust. Our Living Trust package includes step-by-step funding instructions for Maryland. Consequently, nothing important is left behind.

Blended families, children and choosing a trustee in Maryland

Blended families need careful planning. For example, a parent may want to support a new spouse while protecting an inheritance for children from an earlier marriage. In addition, Maryland gives a surviving spouse an elective share in many cases, which can affect plans for children from an earlier marriage. Therefore, a trust can hold assets for the surviving spouse for life and then pass the remainder to the children.

Similarly, a trust can manage money for minor children until they are older, instead of handing everything over at 18. Moreover, you choose the successor trustee. Pick someone organized, honest and willing, or name a professional trustee when family dynamics are complex.

If you already have a trust, a trust review checks whether it still fits your family and Maryland law.

Flat fee living trust pricing and documents in Maryland

Our Living Trust service starts at $199 for Maryland. The standard package tailors the trust to Maryland law and your family. Meanwhile, the premium package adds attorney review.

A complete plan also needs a durable power of attorney and an advance directive for health care, each with Maryland signing requirements. Our Estate Plan Bundle prepares these to Maryland standards. In addition, our durable power of attorney and healthcare directive services are available individually.

Not sure whether a trust is worth it for you? A living trust consultation compares a trust with a will and other probate-avoidance tools. For more, read our national guide to flat fee living trusts.

Common living trust mistakes in Maryland

The most common mistake is signing a trust but never funding it. Consequently, assets left outside the trust may still need probate. In Maryland, another frequent problem is assuming a trust avoids Maryland inheritance tax. It does not, so gifts to nieces, nephews or friends may still be taxed.

Similarly, many people forget to update beneficiary designations on retirement accounts and life insurance. As a result, money can go to an ex-spouse or the wrong person. Therefore, review every designation when you sign your trust.

Finally, keep the trust current. Marriage, divorce, a new grandchild or a large change in assets should all prompt a review. In addition, store the original documents safely and tell your successor trustee where they are.

What the trustee does after a death in Maryland

When the trust creator dies, the successor trustee takes over without court involvement. First, the trustee obtains death certificates and secures the assets. Next, the trustee notifies beneficiaries as Maryland law requires.

After that, the trustee pays debts, expenses and any taxes. In particular, the trustee should evaluate both Maryland estate tax and inheritance tax filings. Then the trustee transfers or sells real estate by recording documents with the county land records office.

Finally, the trustee distributes the remaining assets under the trust's terms and keeps records. Consequently, the family avoids probate and keeps matters private. Our executor documents service helps trustees and executors stay organized.

Out-of-state property and moving to Maryland

Many Maryland families own property elsewhere, such as homes in the Eastern Shore, Delaware or Virginia. Without a trust, each state may require its own probate, called ancillary administration. Therefore, deed out-of-state property to your trust too.

If you move to Maryland with a trust from another state, it generally remains valid. However, it may not reflect Maryland's tax rules, property law or signing requirements for related documents. Consequently, a review after a move is wise. In addition, update your powers of attorney and healthcare documents to Maryland forms, because banks and hospitals accept familiar forms more readily.

Who benefits most from a living trust in Maryland?

A living trust is not essential for everyone. However, it adds real value in several situations. First, homeowners who want to keep their house out of probate benefit. Second, people who own property in more than one state avoid multiple probates.

Third, anyone concerned about incapacity benefits, because the successor trustee can step in without a court guardianship or conservatorship. Fourth, parents of young children or beneficiaries who need help managing money gain control over how and when assets are distributed.

In addition, Maryland has both an estate tax and an inheritance tax, so careful trust planning matters for larger estates and non-family beneficiaries. Consequently, many Maryland families find a trust worth the modest cost. A living trust consultation helps you decide.

Maryland tax planning in brief

Because Maryland has two death taxes, coordinate your beneficiary choices with your trust. For example, leaving taxable gifts to non-family beneficiaries from assets already subject to estate tax can increase the total bill. Therefore, review both taxes together.

Our Living Trusts services in Maryland

Every service below has a fixed price, is prepared by a qualified attorney and is delivered online — wherever you are in Maryland. Additionally, you can upload evidence, message your attorney and track progress from your secure client dashboard.

Living Trusts across Maryland — cities we serve

We work with clients in every part of Maryland, entirely online. Therefore, it does not matter whether you live downtown or hours from the nearest courthouse. Your documents follow Maryland law and your county's local practice. Choose your city below to see local details and prices.

• Baltimore: Revocable Living Trust in Baltimore · Complete Estate Plan Bundle in Baltimore · Living trust consultation in Baltimore
• Columbia: Revocable Living Trust in Columbia · Complete Estate Plan Bundle in Columbia · Living trust consultation in Columbia
• Germantown: Revocable Living Trust in Germantown · Complete Estate Plan Bundle in Germantown · Living trust consultation in Germantown
• Silver Spring: Revocable Living Trust in Silver Spring · Complete Estate Plan Bundle in Silver Spring · Living trust consultation in Silver Spring
• Frederick: Revocable Living Trust in Frederick · Complete Estate Plan Bundle in Frederick · Living trust consultation in Frederick
• Rockville: Revocable Living Trust in Rockville · Complete Estate Plan Bundle in Rockville · Living trust consultation in Rockville
• Annapolis: Revocable Living Trust in Annapolis · Complete Estate Plan Bundle in Annapolis · Living trust consultation in Annapolis
• Bethesda: Revocable Living Trust in Bethesda · Complete Estate Plan Bundle in Bethesda · Living trust consultation in Bethesda

More Maryland services

Complete Estate Plan Bundle in Maryland · Living trust consultation in Maryland · Durable Power of Attorney in Maryland · Advance Healthcare Directive / Living Will in Maryland · Probate Documents Package in Maryland · Trust review in Maryland. See all legal services in Maryland.

Nearby states

Moving between states, or is the other party elsewhere? We also cover Revocable Living Trust in Virginia, Revocable Living Trust in District of Columbia, Revocable Living Trust in Pennsylvania, Revocable Living Trust in Delaware. See every location we cover.

Frequently asked questions

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Related guides

This guide is general information, not legal advice for your situation. Every case is different — speak to a qualified attorney before you act.