Governor Enacts Estate Tax Cut

On May 15, Governor Martin O’Malley signed a new law that will ease the estate tax burden for thousands of Maryland families. Under prior law, estates of decedents owning $1 million or less are exempt from Maryland estate tax, and larger estates are taxed on wealth in excess of $1 million (at an initial rate of 16%).  Under the new law, that $1 million exemption amount is going to increase in future years, as follows:

 

Year of Death                  Exemption Amount

2015                                       $1,500,000

2016                                       $2,000,000

2017                                       $3,000,000

2018                                       $4,000,000

2019                             [Federal Exemption]

 

In 2019 and later years, the Maryland estate tax exemption will equal the federal estate exemption, which is currently $5,340,000 and increasing for inflation annually.

 

Most clients of the Law Office of Jane Frankel Sims will not need to revise their estate planning documents to take advantage of the new tax cuts.  Although the cuts could not have been predicted before January of this year, we have long anticipated such changes and built a degree of flexibility into most clients’ tax plans.  If the Maryland estate tax exemption will rise above the expected value of your taxable estate at some point over the next four years, we advise you to contact us for a review of your plan before that time arrives.