In the State of Maryland, any assets passed through inheritance are taxed at 10%. This applies to assets passing through the Probate Court as well as anything of value passed through Trust Administration.
There are a few exceptions and rules that can make this a little more complicated for some people.
Lineal Heirs are exempt from paying Inheritance Taxes. That means that any inheritance received by your Spouse, Children, Grandchildren, Sibling, Parents, or Grandparents are not taxed.
Additionally if the dispository documents such as a Will or Trust instructs your estate to pay these taxes for the recipient, then that tax payment is seen as income to the beneficiary and will be taxed recursively. This results in a Inheritance Tax Rate of 11.11111%.
The calculator below will allow you to layout the distribution pattern of a dispository document, identify the beneficiaries and their relationships to a decedent, and calculate a projected inheritance tax invoice.
Did you know that Maryland is 1 of only 6 states in the country that collect Inheritance Taxes, and the only state to collect Estate Taxes?
Pennsylvania has a range of taxes depending on your relationship, whereas Maryland has a flat 10% tax for everyone regardless of the relationship to the decedent.
Maryland also has an additional advantage over Pennsylvania since Descendants and Siblings are exempt as well as the Spouse.
The Register of Wills in Maryland will receive from the Estate an Application to Fix Inheritance Taxes for all Non-Probate assets where they will render an Invoice for Inheritance Taxes due to the State of Maryland. Otherwise the inheritance taxes will be determined upon filing the Estate Information Report and Invoice to the appropriate parties.
The Final Accounting of the Estate will not be accepted until all Inheritance Taxes are paid in full. Further, the Inheritance Taxes will be charged a 10% late fee for delinquent payment.
Any Estate considered to be a "Small Estate" (under $30,000) will be exempt from all inheritance taxes as well.