Does Maryland have an inheritance tax?

Yes. Maryland is the only state in the country that imposes both an estate tax and a separate inheritance tax. The inheritance tax is assessed on assets received by certain beneficiaries — specifically those who are not lineal relatives or siblings of the decedent — at a flat rate of 10% on the clear value of the inherited assets.

What is the Maryland inheritance tax rate?

The Maryland inheritance tax rate is a flat 10% of the clear value — fair market value minus allowable expenses — of property inherited by nonexempt beneficiaries. Close family members, including spouses, children, grandchildren, parents, grandparents, siblings, and spouses of children, are generally exempt from the tax.

Who pays inheritance tax in Maryland?

The inheritance tax is paid by beneficiaries who fall outside Maryland’s exempt categories. Those who are not exempt include nieces, nephews, cousins, friends, unmarried partners, and other nonlineal or nonsibling relatives. The estate may pay the tax on the beneficiary’s behalf, in which case that payment can generate a credit against any Maryland estate tax owed.

How can I reduce or help avoid Maryland inheritance tax?

Several strategies may help reduce inheritance tax exposure. For many families, understanding how to avoid Maryland inheritance tax starts with the same fundamentals: directing assets to exempt beneficiaries through thoughtful estate planning; using trust structures that control how and to whom assets are distributed; and making lifetime gifts, which are not subject to the Maryland inheritance tax. Working with estate planning and tax professionals seeks to help coordinate these approaches for your specific situation.

Is the Maryland estate tax exemption the same as the federal exemption?

No. The Maryland estate tax exemption is $5 million per individual, which is not indexed for inflation and changes only through legislation. The federal estate tax exemption, permanently raised to $15 million per individual by the One Big Beautiful Bill Act in 2025, is significantly higher. That $10-million gap means Maryland residents with estates between $5 million and $15 million may owe Maryland estate tax even when no federal estate tax is due — making state-specific estate planning essential.

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Estate Planning

Protecting what you’ve built and ensuring it passes to the people you care about takes more than a basic will — it requires a thoughtful trust and estate plan that addresses taxes, family dynamics, business interests, and your long-term legacy goals. At Mercer Advisors, trust and estate planning is woven into every client’s comprehensive financial plan, with solutions spanning revocable and irrevocable trusts, estate tax strategy, and coordinated beneficiary planning. Explore the resources below to understand how a well-designed trust and estate plan can help protect your family and preserve your wealth.

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The Family Guide to Estate Planning: Helping To Protect What You’ve Built Across Generations

Maryland Estate and Inheritance Tax

Estate Planning for Blended Families: Key Considerations

When Your Child Turns 18: A Financial and Legal Planning Guide for Families

Estate Planning Strategies for Your Financial Future

What is a SLAT (spousal lifetime access trust)?

What is a GRAT (grantor retained annuity trust)?

What is a dynasty trust?

What is a QCD (qualified charitable distribution)?

What is the annual gift tax exclusion in 2026?

What is the SECURE Act 10-year rule for inherited IRAs?

How does the SECURE Act 10-year rule compare to the old “stretch IRA” strategy?

What is the difference between a will and a living trust?

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Want to learn more about Mercer Advisors?

Estate Planning

The Family Guide to Estate Planning: Helping To Protect What You’ve Built Across Generations

Maryland Estate and Inheritance Tax

Estate Planning for Blended Families: Key Considerations

When Your Child Turns 18: A Financial and Legal Planning Guide for Families

Estate Planning Strategies for Your Financial Future

What is a SLAT (spousal lifetime access trust)?

What is a GRAT (grantor retained annuity trust)?

What is a dynasty trust?

What is a QCD (qualified charitable distribution)?

What is the annual gift tax exclusion in 2026?

What is the SECURE Act 10-year rule for inherited IRAs?

How does the SECURE Act 10-year rule compare to the old “stretch IRA” strategy?

What is the difference between a will and a living trust?

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