Maryland Inheritance Laws

In 2021, an attorney was disbarred by the Maryland Court of Appeals. The reason for his exit from the legal profession was the misappropriation of estate funds. In a one-page order, the court explained that the attorney lied to his late client’s daughter about the need to sell her mother’s commercial property to settle estate taxes. 

Shortly after, the daughter sold the property for over $900,000. The proceeds from the sale totaled more than $850,000. However, rather than use the funds to pay taxes, the attorney transferred the money to his personal bank account over a period of several weeks. These funds were used for insurance premiums, credit card bills, and tuition fees. 

On top of that, the attorney lied to an Orphans’ Court that his client passed away without a will. This means that his client’s wishes — including a $30,000 disbursement to her grandchild — were never fulfilled. 

Such cases are not uncommon in Maryland. In fact, another attorney was disbarred for misappropriation in the same year. Two lawyers were also indefinitely suspended, and one was reprimanded for misconduct related to probate law. 

These cases underscore the need to know how inheritance laws work in Maryland. With that said, this article provides information about the process of admitting wills. It also discusses the role of personal representatives. In addition, the article shows the rules in place when people die without leaving a will. 

What Happens if Someone Dies With a Will in Maryland?

When a person with a will dies, their assets go through a process called probate. The will determines how their assets are distributed to their surviving family members and other beneficiaries. 

A will is valid if it meets the following requirements: 

• The document must be in writing. 

• The individual making the will, known as the testator, should be at least 18 years old. 

• That individual also needs to possess a “sound mind.” This means that the person who made the document understood its purpose. 

Maryland law also requires a minimum of two witnesses to sign the will. They can either be physically or electronically present when the document is created. It is crucial, though, for the witness to be a resident of and physically located in the U.S. for the will to be valid.

One thing to note is the difference between disinterested and interested parties. The former refers to individuals not set to receive anything from the will. Interested persons, meanwhile, may consist of heirs, legatees, and personal representatives. Only disinterested parties may be witnesses to a will.

Role of Personal Representatives

Individuals holding the original will must promptly file it with the Register of Wills after the death of the testator, otherwise known as the one who made the will. The person who submits the will is known as the personal representative.

The role of personal representatives is essential. They pay estate taxes and bills. They also distribute property according to the will. As such, state law imposes the following criteria before a person becomes a personal representative. These are:

• A statement that shows they accept their responsibilities.

• A written agreement that states they can face lawsuits for their actions.

• A bond, if necessary.

Bonds are part of the criteria as they act as a guarantee that the personal representative will not misuse estate funds. Given the importance of the role, Maryland law does not appoint certain individuals. These include those who are:

• Mentally incompetent.

• Under 18 years old.

• Non-citizens, except if they are a permanent resident and the decedent's spouse, descendant, sibling, or ancestor.

• Found guilty of serious crimes, unless they show good cause for the appointment.

Personal representatives are named in a will. If, for various reasons, they cannot fulfill their duties or there is no person named as such, the Register of Wills will select others for the role.

The person chosen depends on the order of priority. It begins with the surviving spouse or the registered domestic partner. The next in line are:

• The residuary legatees, or the individuals named in the will.

• The decedent’s children.

• The decedent’s grandchildren.

• The decedent’s parents.

• The decedent’s siblings. 

• Other surviving family members who apply for the role.

• The largest creditor of the estate.

• Any other person with a financial interest in how the estate is managed.

• Any other person.

Admitting the Will to Probate

When a personal representative admits the will to probate, the process of carrying out the decedent’s wishes begins. To start probate, one must file a petition, which needs to contain information like:

• Details about the decedent, including their domicile and name. Their date and place of death must also be included.

• The petitioner’s interest.

• The county where the decedent was domiciled during their death. If they were not a Maryland resident, it should be the county where the situs (location) of the most valuable part of their estate is.

• Details about other proceedings filed in and outside Maryland related to the estate.

Maryland’s Probate Process

The probate process starts when the testator passes away. There is no specific deadline for filing the will. However, as stated above, Maryland law requires the document to be submitted promptly. The personal representative needs to file the will with the Office of the Register of Wills in the county where the decedent lived at the time of their death.

In cases involving multiple wills, all original forms must be presented to the Register. Similarly, all existing amendments to the original will, or codicils, must be submitted together with the original wills.

Another thing that personal representatives must know is the value of the estate. The two types of estates under Maryland law are:

• Small estates: Worth $50,000 or less; can be designated for estates with $100,000 in value if the decedent’s spouse is the only heir.

• Regular estates: Worth $50,000 or more.

Small estates opened on or after October 1, 2022, are not subject to probate fees. Meanwhile, the fee for a regular estate would depend on its value.

When appointed, personal representatives are given the Letters of Administration by the Orphans’ Court. This document grants them the power to manage the estate.

Within 20 days of their appointment, personal representatives must provide two things to the Register. These are: 

• The first newspaper notice about their appointment.

• The list of the decedent’s legatees and heirs.

Within five days of receiving these items, the Register must send notices to the interested parties.

The duties of a personal representative also include completing and filing an inventory and information report within three months of their appointment date. This document contains a list of assets like real estate properties and corporate stocks. Its value must be fairly appraised based on its worth when the testator died.

First accounts, which are documents that show transactions related to the estate, need to be submitted within nine months from the appointment date. After six months from their filing date, subsequent accounts are required to be filed. These documents are needed until the estate is closed. 

During this time, a creditor may submit a claim against the estate. The deadline for such actions is the earlier of the two dates: 

• Within two months from the date the personal representative sends a notice, which states that claims are no longer allowed if they are filed after the two-month mark.

• Within six months of the decedent’s death.

When the final account is approved, the estate’s assets can finally be distributed. Remember that, in some cases, a personal representative may file a combined first and final account. All these accounts are subject to approval by the Orphans’ Court.

It takes six months at the earliest for the probate process to conclude. Factors like complex assets and creditors’ claims may lengthen probate by up to a year or longer. 

In light of these requirements, it can be easy to feel overwhelmed. As such, personal representatives or beneficiaries may find it necessary to obtain the assistance of an experienced probate attorney. 

Non-probate Assets

Some assets are not subject to probate rules. This means beneficiaries can receive these assets directly instead of going through the first, subsequent, and final accounts.

Some examples of non-probate property are:

• Assets with a named beneficiary, like IRAs, pension plans, and life insurance policies. 

• Assets that are transferred to a trust before the decedent passes away. 

• Assets jointly owned by the decedent and their spouse, like real estate properties.

Contesting a Will

To contest a will means to call attention to its validity. A petition for such an action is known as a caveat proceeding. This is also filed before the Orphans’ Court.

Petitions to contest a will must be submitted within six months from when the personal representative is appointed. In cases involving a new will or a codicil, the deadline is the later of the two:

• Within six months from the appointment date of the personal representative for the first will.

• Within three months after the codicil or new will is admitted to probate.

Here are multiple reasons why wills are contested. Beneficiaries may claim that there is fraud or forgery involved. Others can present evidence that the testator was under undue influence when they made the will.

Another reason is the presence of mental incompetence. If the testator suffers from conditions like Alzheimer’s, their will can be invalidated.

Note that although will contests start in the Orphans’ Court, the trial for the dispute may be held at the Circuit Court.

What Happens if Someone Dies Without a Will in Maryland?

When someone dies without a will, that situation is known as intestate. Without a document carrying out the decedent’s wishes, Maryland courts have to rely on the preference of the law to determine who obtains their assets.

Generally, state law prioritizes the surviving spouse and children. If the decedent was unmarried or had no children, other family members may receive part of their estate. However, the assets will be transferred to the government if no heir is identified. 

Whether there is a will or not, assets subject to probate must undergo the process. The difference lies in who becomes the personal representative. In cases that do not involve wills, a judge may choose the surviving spouse or a legatee for the role.

Spousal Rights

The rights of the surviving spouse in an estate depend on multiple factors, like whether children or parents are involved. The spouse receives one-half of the estate if a minor child is entitled to the other half.

If there are adult children, the surviving spouse obtains $15,000 and half of the estate. Meanwhile, the other half is split among the children. This rule is also applicable in cases where a decedent who had no children is survived by their parents and a spouse. In this situation, the parents obtain half the estate.

Meanwhile, spouses receive the entire estate if there are no living children. 

A concept to be aware of is elective share. This refers to the right of spouses to either claim what they are entitled to from the estate or choose to receive a fixed amount. The purpose of the elective share is to protect surviving spouses from disinheritance. 

With regards to surviving domestic partners, Maryland law grants them the same treatment as spouses as long as they are registered. Individuals divorced from the decedent, on the other hand, do not have the same rights as surviving partners. 

Children’s Rights

Children inherit everything if there is no surviving spouse or registered domestic partner. If there are surviving partners, then the children receive half the estate. 

Although it may seem straightforward, multiple situations can complicate how assets are distributed. The table below shows how various children face different estate rights:

Rights of Other Surviving Relatives

If there are no surviving partners or children, the following order determines who receives the decedent’s assets. These are: 

• Surviving parents only. 

• Surviving siblings only. 

• Grandparents if no other heirs listed above exist.

• Stepchildren if no other heirs listed above exist.

Estates With No Heirs

Some individuals may leave behind estates that cannot be passed on to heirs. In such cases, the government takes control of the assets. However, the agency that takes charge depends on the circumstances.

For instance, if the individual received long-term care benefits from the Maryland Medical Assistance Program up to their death, their net estate is converted to cash. The Maryland Department of Health then uses these proceeds. 

In other cases, the net estate is transformed into cash and transferred to the board of education in the county where the letters were granted.

Unique Situations in Maryland Inheritance Law

In some situations, the application of inheritance laws is not as straightforward as people like it to be. These circumstances affect certain individuals in Maryland. 

For Non-citizens

Among the states, Maryland saw the fifth-largest absolute growth in the population of children with immigrant parents from 2010 to 2021. Immigrants also make up 28% of all parents in Maryland with kids from 0 to 10 years old. These numbers underscore the importance of knowing how probate works for non-citizens.

For instance, a foreign will should meet Maryland requirements to be deemed valid. This means it must be:

• Signed by the testator and their witnesses.

• Attached with a certification from the foreign country, signifying its validity under that nation’s laws.

Another thing to note is jointly owned property. In a marriage that involves both a U.S. citizen and a non-citizen, the total value of the joint property may be taxed in the estate. This is different if both parties are U.S. citizens, wherein each only owns half of the property. To lower the value of the taxable estate, the non-citizen can show they made payments towards the property purchase.

For LGBTQ+ parents

Same-sex parents with kids represent over 20% of the population of gay couples in Maryland. This figure puts the state 12th nationwide. With same-sex marriages recognized since 2013, such parents must learn how their circumstances affect the probate process.

One concern is in relation to children. Under Maryland law, a child can inherit from their parents if they are biologically related. Adoption is also a way to help children obtain assets. Given this, same-sex couples must eliminate the possibility of disinheritance through wills. 

Does Maryland Impose Inheritance and Estate Taxes?

Yes, but do note that there is a difference between inheritance and estate taxes:

• Inheritance tax is the liability imposed on the heirs. 

• Estate tax is the liability imposed on the estate. 

The nearby District of Columbia levies an estate tax. Meanwhile, neighboring New Jersey only requires an inheritance tax. Maryland, on the other hand, is the only state that imposes both. 

The rates for these depend on multiple factors. For example, a 10% inheritance tax rate is imposed on property passed on to other individuals. This tax does not apply if assets are transferred to family members. 

Meanwhile, estates worth less than $5 million are not subject to an estate tax. If they exceed that amount, the rate would be 16%. Note that this tax is only applied to the portion over $5 million. 

Other forms of obligations personal representatives need to remember are federal gift and estate taxes. 

Legal Resources Related to Inheritance Law in Maryland

Maryland residents may refer to the resources below for guidance when it comes to probate. There is also a link to a program for individuals who have suffered misconduct from their attorneys. In addition to these, one can seek assistance from a Maryland probate lawyer.

Maryland Judiciary

The Maryland Judiciary aims to deliver access to justice for all who end up in its courts. One of the ways it fulfills its mission is through the Client Protection Fund of the Bar of Maryland. This program allows claimants to recover funds lost because of misappropriation by their attorneys. Aside from clients who have lost funds because of Maryland Bar members, the fund also reimburses those who sustained losses from out-of-state lawyers admitted to practice in Maryland. One may call 410-630-8140 for inquiries about the program.

Maryland Legal Aid

Through offices in locations like Baltimore, Annapolis, and Cumberland, Maryland Legal Aid is able to serve clients across the state. It assists eligible individuals looking to draft advanced directives and wills. The organization also helps victims of elder abuse. To contact Maryland Legal Aid, call its centralized intake number at 888-465-2468.

Senior Legal Services

Senior Legal Services is a program jointly managed by the Baltimore Bar Foundation and the Bar Association of Baltimore City. It provides estate planning solutions for individuals over 60 throughout the city. The program helps them resolve matters like financial powers of attorney and wills. To get in touch with Senior Legal Services, call 410-396-1322.