What property is subject to the Maryland inheritance tax?

There are circumstances in which a person's property will be subject to an inheritance tax in Maryland. If a person has a will that passes on their property to someone else or, in the absence of a will, that property passes on to another person via the state's intestacy laws, that property may be subject to the inheritance tax, although there are many exceptions.

In addition, if a person who is not a surviving spouse has an interest in a piece of property as a joint owner, then that interest may be subject to the inheritance tax. This includes accounts with financial institutions.

Furthermore, if a material portion of the property owned by the person who has passed away is transferred within a couple years after that person passes away as a final distribution, and if the transfer is completed with the thought of the original owner of the property passing away, then this property may also be subject to the inheritance tax.

Finally, property in which the person who has passed away kept any dominion of when they passed away, such as trusts, annuities, pensions subject to federal taxation and other types of property that fall in this category, may be subject to the inheritance tax.

This may seem like much of a person's property is subject to the Maryland inheritance tax. However, there are some very important exceptions to these rules that make it so that many times a person may be able to inherit property without it being subject to the inheritance tax.