SoMD Estate Planning

Estate Planning Attorneys in Southern Maryland

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How to Protect Your Children’s Inheritance from Being Spent Too Quickly

Leaving money to your children is natural — but have you thought about what happens if they receive a large sum before they are ready? Without proper planning, an inheritance can be spent impulsively, lost to creditors, or mismanaged.

The Risks of Outright Inheritance

If your will leaves assets directly to children, they receive them outright at age 18 in Maryland. A trust solves this by letting you set conditions — milestone distributions at ages 25, 30, and 35, or distributions only for education, healthcare, or a first home. A spendthrift provision prevents beneficiaries from pledging their inheritance as collateral and protects trust assets from creditors.

Want to learn more about protecting your children’s inheritance? Contact SoMD Estate Planning for a free consultation.

Maryland Estate Tax vs. Inheritance Tax: What Is the Difference?

Maryland is one of only a few states in the nation that imposes both an estate tax and an inheritance tax. These are two separate taxes that can significantly impact what your family receives. Understanding the difference — and how to plan for both — is essential for protecting your legacy.

The Maryland Estate Tax

The estate tax is a tax on the total value of a deceased person’s estate before it is distributed to heirs. Maryland’s estate tax exemption is $5 million — meaning estates valued above this threshold are subject to Maryland estate tax at rates up to 16%. This is separate from and in addition to the federal estate tax exemption, which is significantly higher.

The Maryland Inheritance Tax

The inheritance tax is different — it is a tax on what individual beneficiaries receive, not on the estate as a whole. Maryland’s inheritance tax rate is 10% on the value of assets received. However, certain beneficiaries are exempt: spouses, parents, grandparents, children, grandchildren, siblings, and certain other close relatives pay no inheritance tax. The tax primarily affects more distant relatives and non-related beneficiaries.

How Both Taxes Can Apply Simultaneously

In a worst-case scenario, a large estate could be hit with both the estate tax on the overall estate value and the inheritance tax on distributions to non-exempt beneficiaries. Proper planning can minimize or eliminate both taxes through strategies like lifetime gifting, charitable giving, trust structures, and proper use of marital deductions.

Plan Ahead to Protect Your Family

Tax planning is a critical component of estate planning in Maryland. At SoMD Estate Planning, we help families understand their potential tax exposure and implement strategies to minimize it. Contact us for a free consultation to review your situation.

Choosing the Right Executor for Your Will: A Practical Guide

Your executor — called a personal representative in Maryland — is the person responsible for carrying out the instructions in your will. Choosing the right person for this role is one of the most important decisions in your estate plan, yet many people make this choice without fully understanding what the job entails.

What Does an Executor Actually Do?

Your executor files the will with the court, inventories your assets, notifies creditors, pays outstanding debts and taxes, manages estate assets during probate, distributes assets to beneficiaries, files final tax returns, and provides accountings to the court. It is a significant responsibility that can take months to complete.

Qualities to Look For

The best executor is someone who is trustworthy and honest, organized and detail-oriented, financially responsible, willing to serve, available to dedicate the time required, and able to remain impartial if family dynamics are complex. While it does not need to be a family member, it should be someone you trust completely.

Can You Name a Professional Executor?

Yes. Some people choose to name an attorney, accountant, or professional fiduciary as their executor. This can be a good option if family dynamics are complicated, your estate is large or complex, or no suitable family member is available or willing.

Always Name a Backup

Always designate an alternate executor in case your first choice is unable or unwilling to serve when the time comes. Without a named backup, the court will appoint someone.

Need help choosing the right executor and structuring your will? Contact SoMD Estate Planning for personalized guidance.

What Happens to Your Home When You Die Without a Trust in Maryland?

For most Maryland families, their home is their largest asset. Yet many homeowners in Southern Maryland have not planned for what happens to their property when they pass away. Without a trust or other probate-avoidance strategy, your home will go through the full probate process — costing your family time, money, and stress.

Your Home and Probate

When you die, any real property titled solely in your name becomes a probate asset. In Maryland, this means the Orphans’ Court oversees the transfer of your home to your heirs. Your family cannot sell, refinance, or transfer the property until the probate process is complete — which can take six months to over a year.

How a Trust Protects Your Home

By transferring your home into a revocable living trust, you retain full control during your lifetime but ensure the property passes to your beneficiaries immediately upon your death — without probate. Your successor trustee can manage, sell, or distribute the property according to your wishes without court involvement.

Other Options for Homeowners

Joint tenancy with right of survivorship automatically transfers ownership to the surviving co-owner. However, this approach has limitations — especially if you want the property to pass to someone other than a co-owner. A trust provides more flexibility and control.

If you own a home in Charles County, Calvert County, St. Mary’s County, or Prince George’s County, proper planning for your real estate is essential. Contact SoMD Estate Planning to discuss the best approach for your situation.

Estate Planning for Blended Families: Protecting Everyone You Love

Blended families — where one or both partners bring children from a previous relationship — face unique estate planning challenges. Without careful planning, assets may not pass as you intend, and family conflicts can arise during an already emotional time.

The Challenge: Competing Interests

In a blended family, your natural desire to provide for your current spouse can conflict with your obligation to your children from a prior relationship. Under Maryland intestacy law, if you die without a will, your spouse and children share your estate according to a formula that may not reflect your wishes. If your current spouse inherits your assets outright, there is no legal guarantee that those assets will eventually pass to your children.

Trusts: The Key to Protecting Everyone

A trust can be structured to provide for your current spouse during their lifetime while preserving the underlying assets for your children. For example, a QTIP trust or a life estate arrangement can ensure your spouse has income and housing security without depleting the inheritance intended for your kids.

Critical Steps for Blended Families

Have open conversations with your spouse about your estate planning goals. Review and update all beneficiary designations. Consider separate and joint assets carefully. Create clear, legally binding documents that leave no room for ambiguity. Consider whether a prenuptial or postnuptial agreement should coordinate with your estate plan.

Blended family estate planning requires extra care and attention. At SoMD Estate Planning, we have experience navigating these sensitive situations with compassion and precision. Contact us for a free consultation.