It is very important to know inheritance tax Maryland rules, whether you are making an estate plan or whether you stand to inherit after someone has passed away. It is also important to know estate tax rules. In Maryland, there are laws requiring estate tax and inheritance tax to be paid under certain circumstances. Maryland is one of very few states which impose an inheritance tax. Because of the possibility of an inheritance tax and/or an estate tax being assessed after a death, the value of an inheritance could be reduced significantly. Careful planning is necessary to comply with the law and to try to protect as much wealth as possible.
Sinclair Prosser Gasior understands the rules for inheritance tax and for estate tax. Our legal team can help you to make smart money moves to protect an inheritance. Give us a call to find out more about how an Annapolis estate planning lawyer can assist you in complying with inheritance tax Maryland rules.
Inheritance Tax Maryland Rules
In Maryland, an inheritance tax may be imposed upon property that a decedent leaves behind for certain beneficiaries to inherit. The tax is assessed on basically all property that transfers through many different means. Maryland’s inheritance tax may be assessed on property that passes because it is jointly owned. It is also assessed on property which passes through trust administration, on property that passes under intestacy law, and on property that is transferred to new owners based on instructions which were left in a last will and testament.
Inheritance tax is not charged on every estate. The tax may be charged depending upon who inherits. For example, inheritance tax is not going to be assessed if a deceased person passes property on to a spouse; on to a child; on to a parent or to a grandparent; on to a sibling; and on to other lineal descendants. An experienced attorney can help you to determine if inheritance tax will be assessed based on who is going to inherit and based on the nature of the property to be inherited.
Inheritance Tax Versus Estate Tax
Inheritance and estate tax are very different. According to the Comptroller of Maryland, estate tax is: “a state tax imposed on the privilege of transferring property.” An inheritance tax, on the other hand is “a tax imposed on the privilege of receiving property.”
Most states do not have an inheritance tax. State-level estate taxes are more common than inheritance tax, but are still not assessed in every state. The federal government also imposes an estate tax on larger estates, but the IRS does not impose any type of inheritance tax when someone inherits.
The process of paying estate tax and of paying inheritance tax differ in Maryland. An estate tax is based on the value of all property and assets that a deceased person owned or had an interest in at the time of his or her death. The Comptroller of Maryland collects estate taxes, which are due within nine months from the date the deceased person passed away.
An inheritance tax is collected only after property is officially transferred to its new owners. The inheritance tax is collected by the Register of Wills that is located in the country where the property of the deceased person was owned.
You need to understand when and how to pay estate tax and inheritance tax to make certain that you are in full compliance with the law following a death. An experienced attorney can assist you with finding out Maryland rules for estate and inheritance tax and can help you to comply with tax requirements triggered by a death.
Getting Help from A Maryland Inheritance Tax Planning Lawyer
Sinclair Prosser Gasior knows how hard it is to amass wealth to leave a comfortable legacy. You should not have the value of your labor lost because of high taxes. For those who stand to inherit, we also understand that you may be counting on your inheritance and may find it hard to lose a lot of money to various taxes.
Our legal team works with you to understand inheritance tax Maryland rules both when making a legacy plan and when you inherit after a death. Our goal is to assist you in understanding the law and in finding legal tools to protect and preserve your wealth. Give us a call to find out more about the ways in which our legal team can assist you with inheritance tax planning, estate tax planning, and more.