Maryland Estate Planning: What It Costs and What You Actually Need

Estate planning in Maryland isn't optional — it's a financial necessity. Maryland is the only state that imposes both a state estate tax (with a $5 million exemption) and a separate 10% inheritance tax on transfers to non-lineal heirs. Without planning, families lose money to taxes, probate fees, and court proceedings that could have been avoided.

The question isn't whether to plan. It's how much to spend and what approach fits your situation.

The Core Documents Everyone Needs

Regardless of your net worth, a complete Maryland estate plan includes:

1. Durable Financial Power of Attorney — authorizes someone to manage your finances if you can't. Under Maryland's statutory form (ET § 17-202), this requires notarization and two witnesses.

2. Healthcare Advance Directive — names a healthcare agent and records your treatment preferences. No notarization required, but needs two witnesses (the healthcare agent can't be one of them).

3. Last Will and Testament — directs how your probate assets are distributed and names a personal representative to manage the process.

4. Beneficiary designations — these aren't documents you draft separately, but reviewing and updating beneficiaries on retirement accounts, life insurance, and bank accounts is a critical part of the planning process.

For families with assets above $5 million, a revocable living trust becomes important for estate tax management and probate avoidance.

What Estate Planning Costs in Maryland

Attorney-Drafted Plans

Maryland estate planning attorneys typically charge:

• Basic plan (will, POA, Advance Directive): $1,500-$2,500
• Comprehensive plan (add revocable trust, pour-over will, funding guidance): $3,000-$5,000
• Complex estates (business succession, charitable planning, irrevocable trusts, tax optimization for estates above $5 million): $5,000-$15,000+
• Hourly rates for estate attorneys: $250-$500/hour in the Baltimore-Washington corridor

These fees cover the drafting, execution ceremony, and initial consultation. They don't include ongoing trust administration, annual reviews, or tax return preparation.

DIY and Online Options

• Free government forms: Maryland's statutory POA and Advance Directive are available as free PDFs from the Attorney General's office and the People's Law Library. But they're bare templates with no instructional context — a leading cause of execution errors that render documents useless.

• National online services (LegalZoom, Rocket Lawyer, Nolo): $39-$249 for document packages. These use questionnaire-driven templates that may miss Maryland-specific requirements, like the two-witness rule for financial POAs or the county land records recording requirement for real estate POAs.

• State-specific kits: Purpose-built for Maryland's legal framework, with step-by-step execution instructions and county-specific guidance. Significantly less than attorney fees, significantly more reliable than generic national templates.

Why Maryland's Tax Structure Makes Planning Urgent

The State Estate Tax

Maryland's estate tax exemption is fixed at $5 million per individual — not indexed for inflation. The federal exemption, by contrast, jumped to $15 million under the One Big Beautiful Bill Act of 2025. This creates a $10 million gap where an estate owes zero federal tax but faces Maryland estate tax rates of up to 16%.

For married couples, the surviving spouse can claim the deceased spouse's unused Maryland exemption (portability), but only if the personal representative files a timely Maryland Estate Tax Return (Form MET-1).

The Inheritance Tax

Separate from the estate tax, Maryland imposes a 10% inheritance tax on property passing to non-lineal heirs — nieces, nephews, cousins, friends, and unmarried domestic partners. Lineal heirs (spouses, children, parents, siblings) are completely exempt.

This means a $500,000 bequest to a nephew triggers $50,000 in inheritance tax that wouldn't apply to a bequest to a child. Planning around this — using trusts, lifetime gifting, or beneficiary designations — can save families significant money.

The Tax Credit Timing Trap

Inheritance tax paid to the Register of Wills can be claimed as a dollar-for-dollar credit against the estate tax. But the estate tax is due nine months after death. If the inheritance tax hasn't been paid by that deadline, the credit can't be claimed on time — and interest accrues on the full estate tax liability until the inheritance tax is physically paid. The Maryland Supreme Court confirmed this timing trap in Comptroller v. Jameson.

What to Prioritize by Life Stage

Young adults (18-30): Healthcare Advance Directive and basic financial POA. Total cost: $0-$200.

Parents with minor children (30-45): Will naming a guardian, POA, Advance Directive. Consider a minor child POA for travel or emergencies. Total cost: $1,500-$2,500 with an attorney, or under $100 with a state-specific kit.

Pre-retirees (50-65): Full estate plan review — update beneficiary designations, consider a revocable trust if assets exceed $5 million, review POA language for Medicaid planning authority (the 2023 SB 851/HB 18 expansions allow agents to execute Medicaid spend-down strategies). Total cost: $2,500-$5,000.

Retirees (65+): Review and update everything. Ensure the financial POA is immediately effective (not springing) and includes expanded authority for Medicaid planning, gifting, and trust funding. Coordinate with a Medicaid strategy if long-term care is likely. Total cost: $3,000-$5,000+ depending on complexity.

The Cost of Not Planning

The alternative to a few hundred or a few thousand dollars in planning costs:

• Guardianship proceeding: $5,000-$15,000+ in attorney fees, plus ongoing court oversight and annual accounting requirements
• Probate fees: Up to $10,000+ for estates over $10 million, plus personal representative commissions (up to 9% on the first $20,000 and 3.6% on the remainder)
• Preventable estate tax: Estates between $5 million and $15 million that don't plan around the state exemption face up to 16% in Maryland estate tax on the excess
• The inheritance tax on non-lineal heirs: 10% on every dollar to non-exempt beneficiaries

The Maryland Power of Attorney Kit covers the POA and Advance Directive components of the estate plan with Maryland-specific execution instructions, including the witness rules, notary requirements, and real estate recording procedures that generic templates miss.

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