*ALERT* Changes to Maryland Estate Tax Exemption for 2019
New Law:
On April 5, 2018, the Maryland General Assembly voted to hold the Maryland estate tax exemption at $5,000,000 per person beginning in 2019 and without adjustment for inflation thereafter. In addition, for the first time, married couples in Maryland will be allowed to share their exemptions. In light of the new law, it is especially important to review your estate planning documents.
History:
In 2014, the Maryland General Assembly passed a law that was intended to gradually increase the Maryland estate tax exemption annually until 2019, when the Maryland estate tax exemption was scheduled to match the federal exemption amount. However, the federal government temporarily raised the federal estate tax exemption to $11,180,000 per person in 2018. The Maryland General Assembly had not anticipated such an increase in the federal exemption, and in reaction, passed a law decoupling the Maryland estate tax exemption from the federal estate tax exemption, as described above.
Recommendations:
Because of Maryland’s new, lower estate tax threshold, it is especially important for Maryland residents to obtain legal advice to ensure that they take steps to minimize their potential Maryland estate tax liability. Furthermore, the recent changes to Maryland’s estate tax law may make it necessary to revise existing estate plans to ensure that they continue to achieve their desired goals. In many circumstances, the new law will allow for the simplification of existing estate plans. Feel free to contact us if you have questions about how the new Maryland estate law may affect you.
