Estate planning can be complex. There are many estate complexities to consider, including to whom to leave property, whom to assign to administer the estate, and tax responsibilities. As discussed on this blog back in May, many Marylanders are concerned about the state's estate tax, whose exemption was only $1 million. Many legislators believed this exemption, much smaller than the federal exemption of more than $5.3 million, drove people out of the state. It also caused many Marylanders trouble when it came to estate planning and estate administration.
Now, though, the state has elected to increase its estate tax exemption starting in 2015 with gradual increases so that it will match the federal level by 2019. The state's Comptroller said evidence showed that Maryland's smaller tax exemption was driving those with significant wealth and philanthropic tendencies out of the state, causing great harm to the state's economy. Though some are concerned that the exemption's increase will short change the state's budget, the Comptroller said those losses would be recouped by increased economic activity generated by those who choose to stay in-state.
Though this increase in the estate tax exemption is good for those who are planning their estates, it is important to realize that the increase will be gradual over several years. Therefore, it is still imperative that those managing their wealth are aware of how the current exemption level will affect their estate upon transfer.
A local attorney can help individuals plan their estates in a way that takes advantage of current exemptions and avoids as many taxes as possible. Other legal issues can be addressed, too, allowing an individual to transfer his or her wealth exactly as intended without costly consequences.