Death Taxes in Maryland
Maryland is probably the costliest state in which to die in 2019. The state imposes both an estate tax and an inheritance tax.
The estate tax exemption here was set at $4 million as of the end of 2018. The tax rate is a flat but pretty significant 16 percent for all estate values over that amount. In other words, if your estate is worth $4,000,001, it will pay 16 cents. If it’s worth $4,100,000, it will pay $16,000 in estate tax.
But Maryland is making some changes, too. The estate tax exemption is expected to increase in 2019 to match the federal exemption, and the federal exemption is extremely generous. So Maryland estates can count on not paying estate taxes on values of up to at least $11.4 million for deaths that occur in 2015. And the federal exemption will most likely increase a little each year because it’s indexed for inflation.
As for Maryland’s inheritance tax, this tops out at 10 percent for distant relatives and unrelated beneficiaries. But combine that with the current estate tax and a single bequest can be hit by a combined 26 percent in death taxes.
