Maryland is the only state in the country that charges both an estate tax and an inheritance tax. Then probate takes its own cut on top. Here is what costs your family money at death, the legal tools that keep your assets out of probate court, and the one move that beats Maryland's 10 percent inheritance tax.
Maryland is the only state in the United States that imposes both an estate tax and an inheritance tax. That one fact changes the whole conversation. In a state like Ohio there is no death tax at all, so the only thing to plan around is the probate process. In Maryland you are planning around three separate costs at once.
And here is the part most people miss: avoiding probate does not, by itself, avoid the inheritance tax. Maryland's inheritance tax reaches assets that never touch probate court at all -- living trust distributions, joint accounts, payable-on-death accounts, retirement accounts. So you need both halves of the plan: the tools that keep assets out of probate, and the one structure that beats the inheritance tax. This guide covers both.
| What your family faces at death in Maryland | 2026 reality |
|---|---|
| Maryland estate tax | $0 below the $5,000,000 exemption. Up to 16 percent above it. Can be shared between spouses for a combined $10,000,000. The exemption is frozen at $5M and does not rise with inflation. |
| Maryland inheritance tax | $0 for a spouse, child, parent, sibling, grandchild, or stepchild. A flat 10 percent on whatever passes to a niece, nephew, cousin, friend, or unmarried partner. Applies whether or not the asset goes through probate. |
| Federal estate tax | $0 if your estate is below $15M (single) or $30M (married). Permanent under the 2025 federal law. |
| Register of Wills fee | $0 under $50,000, rising on a set schedule to a cap of $10,000 plus 0.02 percent on the part above $10M. Set by Maryland statute. |
| Personal representative commission | 9 percent on the first $20,000, then 3.6 percent of everything above that. Set by Maryland statute. About $37,000 on a $1,000,000 estate. |
| Probate attorney fee | Must be "fair and reasonable" by statute, with no fixed schedule. Typically $3,000 to $20,000 for a clean case, far more if anything is contested. |
| Time tied up | 9 to 12 months for a regular estate. Faster under small-estate or modified administration. Years if contested. |
Put the probate piece together: a $1,000,000 estate run through regular Maryland probate typically pays roughly $46,000 to $58,000 in commissions, attorney fees, and court costs, and is locked up for the better part of a year. The two death taxes sit on top of that for larger estates and for gifts to non-exempt heirs. None of it goes to your family.
Maryland law gives you clean, well-worn ways to pass assets to your family without probate court touching them. Most Maryland families use three or four. Read each one with the inheritance tax in the back of your mind: a tool can dodge probate and still owe the 10 percent if the person inheriting is non-exempt. The next section handles that.
You set up a trust, name yourself as trustee while you are alive, and retitle your home, accounts, and other assets into the trust's name. At your death a successor trustee distributes everything by your instructions, with no probate. This is the main probate-avoidance tool in Maryland, because Maryland does not currently offer a statutory transfer-on-death deed for real estate the way some states (like Ohio) do. A funded revocable trust is how you keep a Maryland home out of probate. Two honest cautions: a trust only avoids probate on assets you actually retitle into it, so an unfunded trust avoids nothing; and since Maryland's 2020 reform, trust assets can be reached by a surviving spouse's elective share. Authority: Maryland Trust Act, Estates and Trusts Article, Title 14.5.
Best for: A primary home, rental property, multiple properties, business interests, blended families, and anyone who wants one document that handles both death and incapacity.
Your 401(k), IRA, TSP, and life insurance policy each let you name a beneficiary who inherits directly, by contract, with no probate. In Maryland this is also where the single best tax move lives: life insurance paid to a named person (or to a trust) is exempt from Maryland's inheritance tax, no matter who the beneficiary is. The failure mode is naming "my estate" or leaving the form blank. That pulls the money into probate, and for life insurance it throws away the inheritance-tax exemption. Authority: named-beneficiary life insurance exemption, Tax-General Article, section 7-203.
Best for: Every Maryland resident with a retirement account or life insurance. Never name your estate. Review every form every five years and after every major life event.
On a savings account, checking account, or CD you can add a "POD" designation naming who inherits the balance. On a brokerage account you can register it in "TOD" form to do the same. The named person deals directly with the bank or broker, with no probate, and you keep full control while you are alive. One honest Maryland caveat: POD and TOD keep the account out of probate, but they do not keep it out of the inheritance tax. If the person you name is non-exempt, such as a niece, a friend, or an unmarried partner, Maryland still charges 10 percent on what they receive.
Best for: Every Maryland bank and brokerage account, especially when the beneficiary is a spouse, child, or other exempt relative. Setup cost is zero, filed directly with the institution.
When a married couple owns a Maryland home as "tenants by the entirety," the surviving spouse takes full title automatically at the first death, outside probate, and during life the home is shielded from a creditor of just one spouse. Any two co-owners can hold title with right of survivorship to get the probate-avoidance part. Authority: tenancy by the entirety, recognized under Maryland law.
Best for: Married couples who want the home to pass to the survivor without probate. Most couples pair entireties titling (handles the first death) with a funded revocable trust (handles the second death and what the children eventually receive).
If the probate assets total $50,000 or less ($100,000 or less when the surviving spouse is the only heir), Maryland offers a streamlined small-estate process: no Register of Wills fee, a shorter two-month creditor period, and typically two to four months start to finish, usually with no Orphans' Court involvement. Authority: Estates and Trusts Article, section 5-601.
Best for: Smaller estates, or estates where good titling and beneficiary work has already moved most assets outside probate, leaving only a small amount behind.
When probate cannot be fully avoided, Maryland's modified administration is the faster, cheaper path. If the estate is solvent and every residuary beneficiary is exempt (spouse, children, parents, siblings) and consents, you skip the inventory and the interim accounts and file a single final report within 10 months, and that report does not need court approval. Authority: Estates and Trusts Article, section 5-702.
Best for: Families whose plan leaves everything to a spouse and children, where the goal is to close the estate quickly with as little court supervision as possible.
This is the part of Maryland that surprises people. The inheritance tax does not care whether an asset went through probate. It reaches living trust distributions, joint accounts, payable-on-death accounts, and retirement accounts just the same. So the trust and the POD form that keep your assets out of court do nothing about the 10 percent if the person inheriting is non-exempt.
Whether the tax applies comes down to one thing: who inherits.
| Who inherits | Maryland inheritance tax |
|---|---|
| Spouse or registered domestic partner | $0 -- exempt |
| Child, stepchild, grandchild, other descendants | $0 -- exempt |
| Parent or grandparent | $0 -- exempt |
| Brother or sister | $0 -- exempt |
| Son-in-law or daughter-in-law | $0 -- exempt |
| Niece, nephew, aunt, uncle, cousin | 10 percent of what they receive |
| Friend, unmarried partner (not registered), godchild | 10 percent of what they receive |
The dollars are easy to see, because the rate is a flat 10 percent. And there is exactly one structure that beats it.
| The same $1,000,000, three ways | Maryland inheritance tax |
|---|---|
| Left to your child (exempt) | $0 |
| Left to your niece (non-exempt), by will, trust, or POD | $100,000 |
| Paid to your niece as life insurance to a named beneficiary | $0 |
That last row is the highest-leverage move in Maryland estate planning. Life insurance paid to a named beneficiary is exempt from the inheritance tax no matter who inherits. So for a non-exempt heir, funding the gift through life insurance, or through an irrevocable life insurance trust, can carry the same dollars to the same person with the 10 percent erased. The rule to never break: never name your estate as the beneficiary.
Plus 9 to 12 months of court administration. Estate is public record.
Assets transfer in weeks, not months. Private. The family keeps roughly $35,000 to $50,000.
Numbers are illustrative, based on Maryland's statutory personal representative commission schedule (Estates and Trusts section 7-601) and Register of Wills fee schedule (section 2-206), plus typical practitioner flat-fee ranges. Because everything here goes to children, the Maryland inheritance tax is $0 in both plans, so this comparison is purely the probate-friction stack. Your actual numbers depend on county, asset mix, beneficiaries, and complexity. This is not legal or tax advice.
This is a probate-avoidance guide, not a full estate plan. Several Maryland-specific issues sit alongside probate and need separate attention:
Our Enrolled Agents and advisors can review your current titling, beneficiary forms, and estate documents, then tell you exactly which of the tools above keeps the most of your estate with your family, and whether the inheritance tax touches any of your heirs. Book a no-cost discovery call.
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