Maryland is the only state in the country that charges both an estate tax and an inheritance tax, and probate adds its own fees on top. The right titling and beneficiary forms cut all three costs. This guide covers the legal tools that keep your assets out of probate court, and the main move that beats Maryland's 10 percent inheritance tax.
General information, not legal advice. This guide explains Maryland law in general terms for the public. It isn't legal advice and isn't a substitute for the advice of an attorney licensed in Maryland. Taylored Tax is a firm of Enrolled Agents, enrolled to practice before the Internal Revenue Service. We don't practice law, draft legal documents, or recommend which legal instrument you should use. Reading this guide or booking a call doesn't make you our client.
Maryland is the only state in the United States that charges both an estate tax and an inheritance tax. Ohio has no estate or inheritance tax, so a family there plans only around probate. In Maryland you're planning around three separate costs at once.
Avoiding probate doesn't, by itself, avoid the inheritance tax. Maryland's inheritance tax applies to assets that never go through probate court: living trust distributions, joint accounts, payable-on-death accounts, retirement accounts, and real estate passed by a transfer-on-death deed. So you need both halves of the plan: the tools that keep assets out of probate, and the main structure that beats the inheritance tax.
| What your family faces at death in Maryland | 2026 reality |
|---|---|
| Maryland estate tax | $0 below the $5,000,000 exemption. Up to 16 percent of the taxable estate above it. A married couple can share exemptions for up to $10,000,000 combined if a Maryland estate tax return (Form MET-1) making the election is filed on time at the first death. The $5,000,000 exemption doesn't rise with inflation. |
| Maryland inheritance tax | $0 for a spouse, child, parent, sibling, grandchild or stepchild. A flat 10 percent on most of what passes to a niece, nephew, cousin, friend or unmarried partner. Applies whether or not the asset goes through probate. |
| Federal estate tax | $0 below $15,000,000 per person. A married couple can pass up to $30,000,000 with a timely portability election or a bypass trust at the first death. Public Law 119-21 (2025) set the $15,000,000 with no scheduled end date. |
| Register of Wills fee | $0 under $50,000, rising on a set schedule to $10,000 plus 0.02 percent of the amount over $10,000,000, with no ceiling. $2,000 on a $1,000,000 estate. Set by Maryland statute. |
| Personal representative commission | Up to 9 percent on the first $20,000, then up to 3.6 percent of everything above that, unless the will allows more. Set by Maryland statute. Up to 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. |
On a $1,000,000 estate that includes a home, regular Maryland probate can cost $47,000 to $59,000 in commissions, attorney fees and court costs when a personal representative outside the family takes the maximum commission. The estate is locked up for most of a year. The commission is a ceiling. A personal representative can waive it, and when a spouse or child serves, the commission stays in the family. Larger estates and gifts to non-exempt heirs also owe the estate tax and the inheritance tax. Inheritance tax paid is credited against the Maryland estate tax, so the two only partly stack.
Maryland law gives you clean, well-worn ways to pass assets to your family without probate court handling them. Read each one with the inheritance tax in mind. A tool can skip probate and still owe the 10 percent if the person inheriting is non-exempt.
You set up a trust, name yourself as trustee while you're alive, and retitle your home, accounts and other assets into the trust's name. At your death a successor trustee hands everything out by your instructions, with no probate. A funded trust is the most complete probate-avoidance tool in Maryland. Since October 1, 2026, a recorded transfer-on-death deed (Tool 5) can also keep a Maryland home out of probate. A trust does more: it covers incapacity, and it lets you control how and when several beneficiaries receive property. A trust has two limits. It avoids probate only on assets you actually retitle into it, so an unfunded trust avoids nothing. And since Maryland's 2020 reform, trust assets count toward a surviving spouse's elective share. Authority: Maryland Trust Act, Estates and Trusts Article, Title 14.5.
Commonly used for: A primary home, rental property, multiple properties, business interests, blended families, and people who want one document that handles both death and incapacity.
Your 401(k), IRA, Thrift Savings Plan (TSP) and life insurance policy each let you name a beneficiary who inherits directly, by contract, with no probate. In Maryland, life insurance is also the best tax move. Life insurance paid to a named person (or to a trust) is exempt from Maryland's inheritance tax, whoever the beneficiary is. The mistake to avoid 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. Terrence holds the life insurance licenses on our team and is paid when a policy is placed. Authority: named-beneficiary life insurance exemption, Tax-General Article, section 7-203.
Commonly used for: Maryland residents with a retirement account or life insurance. Naming the estate as beneficiary is a common and costly mistake. Families commonly review these forms every five years and after major life events.
On a savings account, checking account or certificate of deposit (CD) you can add a payable-on-death (POD) designation naming who inherits the balance. On a brokerage account you can register it in transfer-on-death (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're alive. POD and TOD forms don't avoid the inheritance tax. They keep the account out of probate. But if the person you name is non-exempt, such as a niece, a friend or an unmarried partner, Maryland still charges 10 percent.
Commonly used for: Maryland bank and brokerage accounts, 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. 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.
Commonly used 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).
Starting October 1, 2026, Maryland lets you sign a transfer-on-death deed that names who receives your Maryland real estate when you die. It works only if it's recorded in the county land records before your death. While you're alive you keep full ownership. You can change or cancel the deed at any time while you have the mental capacity to make a will. You do it by recording a new TOD deed, a revocation, or a deed that sells or gives away the property. A later will can't override it. If you and a joint owner with survivorship rights signed the deed together, both of you (if living) must sign the revocation. A tenant in common can revoke as to their own share. At your death the property passes to your beneficiary outside probate, still subject to any mortgage or lien.
The deed works as intended for married co-owners only when both sign it. Say you and your spouse own the home with survivorship rights and both sign the TOD deed. The survivor takes the home first, and the deed takes effect at the survivor's death. If only one of you signs, the deed may never take effect. Owners who hold the home as tenants in common aren't joint owners under the law, so this rule doesn't apply to them.
A TOD deed has five limits. It doesn't avoid the inheritance tax, so a home left to a niece or friend still owes 10 percent. The property still counts toward a surviving spouse's elective share. A divorce cancels a TOD deed in favor of your ex-spouse unless the deed or decree says otherwise. Marrying after you record it and then having or adopting a child who survives you also cancels it, whoever the beneficiary is. And it does nothing if you become incapacitated. Authority: Maryland Transfer-on-Death Deed Act, Real Property Article, sections 14-1001 to 14-1014 (Chapters 750 and 751 of 2026).
Commonly used for: A Maryland home or other real estate going to a spouse, child or other exempt relative, when the goal is to keep it out of probate without moving it into a trust.
If the probate assets total $50,000 or less, Maryland offers a faster small-estate process. The limit is $100,000 when the surviving spouse is the only heir. There's no Register of Wills fee under $50,000. Property distributed from a qualifying small estate also owes no Maryland inheritance tax, even to a niece or friend. A creditor who gets written notice has 30 days to file, instead of two months in a regular estate. Every claim is cut off six months after death at the latest. Small estates typically close in two to four months, usually with no Orphans' Court involvement. Authority: Estates and Trusts Article, section 5-601.
Commonly used 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 can't be fully avoided, Maryland's modified administration is the faster, cheaper path. It's open when 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. Authority: Estates and Trusts Article, section 5-702.
Commonly used 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.
Maryland's inheritance tax applies whether or not an asset goes through probate. It applies to living trust distributions, joint accounts, payable-on-death accounts, retirement accounts, and real estate passed by a transfer-on-death deed just the same. So the trust, the POD form and the TOD deed that keep your assets out of court do nothing about the 10 percent if the person inheriting is non-exempt.
Whether the tax applies depends on 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 rate is a flat 10 percent, so the dollars are easy to see. A few narrow exemptions apply, such as gifts to qualifying charities, inheritances of $1,000 or less to any one person, and property distributed from a qualifying small estate. If one person receives more than $1,000, the 10 percent applies to all of it. A charity qualifies if it meets one of three tests. It's incorporated in Maryland, it does a substantial part of its work in Maryland or the District of Columbia, or it's based in a state that gives Maryland charities the same break. For a large gift to a non-exempt heir, life insurance is the main structure that beats the tax.
| 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 a $1,000,000 life insurance death benefit, with her as named beneficiary (you pay the premiums during life) | $0 |
Life insurance paid to a named beneficiary is the strongest move in Maryland for a gift to a niece, nephew or friend. It's exempt from the inheritance tax no matter who inherits. For a non-exempt heir, a policy you own or one held by an irrevocable life insurance trust (ILIT) can carry the same dollars to the same person. The 10 percent is erased. A policy you own still counts toward Maryland's estate tax if your estate is over $5,000,000; one held by an ILIT doesn't. The policy isn't free: weigh the premiums you'd pay during life against the $100,000 of tax. The rest of your estate still passes as before, and most of what else you leave your niece still owes 10 percent. Naming the estate as beneficiary is a common and costly mistake.
Plus 9 to 12 months of court administration. The estate becomes public record.
Trust assets usually transfer within weeks, outside the public record. If a personal representative outside the family would have taken the full commission, the family keeps roughly $35,000 to $54,000.
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. Everything here goes to children, so the Maryland inheritance tax is $0 in both plans and the comparison shows probate costs alone. Your actual numbers depend on county, asset mix, beneficiaries and complexity. This isn't legal or tax advice.
We're Enrolled Agents. We work on the tax: what your estate would owe the IRS, which filings it triggers, and what each choice is worth in dollars. We don't draft documents and we don't practice law.
Every tool on this page is a legal instrument. Which one fits your family, how it's drafted, and how it works with the documents you've already signed are questions for a Maryland attorney. It helps to know what each choice is worth in tax before you sit down with that attorney.
This is a probate-avoidance guide, not a full estate plan. Five Maryland issues go beyond probate and need separate attention:
Every term below appears in this guide or in the documents your attorney will hand you.
| Term | What it means |
|---|---|
| Probate | The court process that moves what you owned into the names of the people who inherit it. |
| Orphans' Court | Maryland's name for the county court that oversees probate. |
| Register of Wills | The county office that opens estates, takes the probate filings and charges the probate fee. |
| Personal representative (PR) | The person who settles your estate. Called an executor in many other states. |
| Personal representative commission | The fee the personal representative can take from the estate. Maryland caps it unless the will allows more, and the personal representative can waive it. |
| Revocable living trust | A trust you control and can change during your life. Assets titled in it skip probate. |
| Funded trust | A trust that actually holds your assets because you retitled them into it. An unfunded trust is an empty box. |
| Pour-over will | A will that sends anything you left outside your trust into it at death. Those leftover assets still go through probate. |
| Power of attorney, healthcare directive | Documents that name who handles your money and your medical decisions if you can't. |
| Transfer-on-death (TOD) deed | A recorded deed that names who inherits your Maryland real estate without probate. Available in Maryland since October 1, 2026. |
| County land records | The public file of deeds kept in each county. A TOD deed works only if it's recorded there before death. |
| Joint owner | For a TOD deed, someone who owns the property with you with survivorship rights, such as a spouse. A tenant in common isn't a joint owner. |
| Payable on death (POD), transfer on death (TOD) registration | A beneficiary named directly on a bank or brokerage account. The account passes to that person without probate. |
| Beneficiary designation | The form on a retirement account or insurance policy that names who receives it at your death. |
| Right of survivorship, tenancy by the entirety | Ways to co-own property so the survivor owns it all at the first death. Tenancy by the entirety is the version for married couples. |
| Irrevocable life insurance trust (ILIT) | A trust that owns a life insurance policy and holds the death benefit for your heirs under rules you set. |
| Death benefit | What a life insurance policy pays when you die. |
| Thrift Savings Plan (TSP) | The retirement savings plan for federal employees and members of the military. |
| Estate tax | A tax on what you leave, paid by the estate before anyone inherits. Maryland has one and so does the federal government. |
| Inheritance tax | A tax on what a person receives, set by that person's relationship to you. Maryland's is 10 percent for non-exempt heirs. |
| Exempt heir, non-exempt heir | An exempt heir (spouse, child or other descendant, stepchild, parent, stepparent, grandparent, sibling, and the spouse of a child) owes no Maryland inheritance tax. A non-exempt heir, such as a niece or friend, owes 10 percent. |
| Qualifying charity | A charity that receives your gift free of Maryland inheritance tax: one incorporated in Maryland, one doing a substantial part of its work in Maryland or the District of Columbia, or one based in a state that gives Maryland charities the same break. |
| Gross estate | Everything you owned at death for estate tax purposes, counted before any deductions. |
| Taxable estate | What's left after deductions. The estate tax is figured on this amount above the exemption. |
| Exemption, exclusion | The amount that passes free of estate tax: $5,000,000 per person for Maryland and $15,000,000 per person for the federal tax in 2026. Federal law calls it an exclusion. |
| Portability | A surviving spouse's right to use whatever exemption the first spouse didn't. It takes a timely estate tax return at the first death that makes the election. Maryland and federal law each have their own version. |
| Maryland estate tax return (Form MET-1) | The return a Maryland estate files. Filing it on time at the first death is how a married couple shares the Maryland exemption. |
| Bypass trust | Also called a credit shelter trust. A trust set up at the first death to hold up to that spouse's exemption, so the money isn't taxed again at the second death. |
| Marital deduction | The rule that lets property pass to a surviving spouse with no estate tax at the first death. |
| Elective share | A surviving spouse's right to claim a share of the estate instead of what the will leaves them. |
| Augmented estate | The pool the elective share is figured on. In Maryland it includes revocable trusts and assets that pass outside probate. |
| Prenup, postnup waiver | An agreement signed before or during marriage in which a spouse gives up the elective share. |
| Small estate administration | Maryland's short probate process for estates with $50,000 or less in probate assets ($100,000 when the spouse is the only heir). |
| Modified administration | Maryland's faster probate process for a solvent estate left to exempt heirs. One final report replaces the inventory and interim accounts. |
| Inventory, interim accounts | The formal list of estate assets and the periodic reports of money in and out that regular probate requires. |
| Residuary beneficiary | The person who receives what's left after specific gifts, debts and expenses are paid. |
| Solvent | An estate that can pay all of its debts. |
| Domicile | The state you treat as your permanent home. It decides which state's estate and inheritance taxes apply to most of what you own. |
| Medicaid estate recovery | The state's claim against the estate of someone who received Medicaid long-term care benefits. |
| Estates and Trusts, Tax-General, Real Property Articles | Parts of the Maryland Code, the state's written law. A citation such as "section 7-601" points to one numbered section of an Article. |
| Chapters 750 and 751 of 2026 | The two matching 2026 Maryland laws (Senate Bill 651 and House Bill 738) that created the TOD deed. |
| Public Law 119-21 | The 2025 federal law that set the $15,000,000 federal estate tax exclusion with no scheduled end date. |
We're always glad to talk about how the federal estate tax works. For anything about how Maryland's estate and inheritance taxes apply to your estate and heirs, or about drafting or choosing legal documents, talk with a Maryland attorney.
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