Most of what an adult child needs to know about Maryland estate and incapacity planning concentrates in a few documents and two distinctive state-level taxes that together make Maryland one of the higher-friction estate environments in the US.
The four documents to have in place this year
1. Maryland Statutory Form Power of Attorney
Maryland adopted a statutory short-form Power of Attorney under Md. Estates & Trusts Code Ann. §17-202.1 Maryland banks and brokerages broadly accept the statutory form; non-statutory POAs are also valid but face more institutional scrutiny.
Key points:
- Durable— survives your parent’s incapacity (the default under the statute).
- Signed by your parent, witnessed by two adults, and notarized.
- Certain “hot powers” — gifts beyond modest amounts, beneficiary changes, creating/amending trusts — must be specifically granted in the document.
2. Maryland Advance Directive
Maryland combines health-care POA and living will into a single Advance Directive under the Maryland Health Care Decisions Act (Md. Health-General §5-601 et seq.).2 The directive:
- Names a health-care agent to make medical decisions when your parent cannot.
- Expresses your parent’s wishes about end-of-life care — including life-sustaining procedures in defined terminal, end-stage, or persistent-vegetative-state conditions.
- Should be paired with a Maryland MOLST (Medical Orders for Life-Sustaining Treatment) form for portable medical orders, particularly for residents in nursing or assisted-living facilities.
3. Last Will and Testament
Maryland wills are governed by Md. Estates & Trusts. The will must be signed by the testator and witnessed by two competent witnesses. Maryland recognizes self-proving affidavits, which streamline probate.
4. Revocable Living Trust
A revocable trust is often the right tool in Maryland for three reasons: probate avoidance (Orphans’ Court is more involved than informal probate in many states), estate- tax planning (Maryland’s $5M exemption is meaningfully below federal), and inheritance-tax planning (the trust can be structured to manage which beneficiaries fall inside vs outside the exempt class).
The Maryland estate tax
Maryland has a state estate tax with a $5M per-individual exemption. Unlike many other state estate taxes (and the federal exemption), Maryland’s exemption has not been adjusted in recent years, meaning rising asset values have pushed more Maryland families into the exposure zone. Maryland estate-tax rates are graduated, reaching up to 16% on amounts above the threshold.3
For estates between ~$5M and the federal exemption (~$13.99M for 2025), Maryland estate tax applies but federal does not. For estates above both thresholds, both apply.
The Maryland inheritance tax
Maryland is one of only six states with an inheritance tax, and one of only two (with New Jersey) imposing both inheritance and estate taxes. Maryland’s inheritance tax structure:4
- Exempt beneficiaries (0%): Spouses, children (and stepchildren), parents, grandparents, siblings, sons-in-law and daughters-in-law, and certain other related categories.
- Taxed beneficiaries (10%): Nieces and nephews, cousins, friends, unmarried partners, and most charities other than IRS-qualified ones.
Practical implications:
- If your Maryland parent wants to leave money to a niece, nephew, friend, or unmarried partner, the 10% inheritance tax applies. A $100,000 bequest costs $10,000 in MD inheritance tax.
- Charitable bequests to qualified 501(c)(3) charities are generally exempt. Bequests to unincorporated associations or non-qualified groups may not be.
- Inheritance-tax planning often involves changing the form of the bequest— for example, lifetime giving (subject to federal gift-tax rules), beneficiary designations on retirement accounts (which can sometimes bypass MD inheritance tax depending on structure ), or trusts.
Probate in Maryland: the Orphans’ Court
Maryland uses specialized Orphans’ Courts — one in each of Maryland’s 24 jurisdictions — to oversee probate. The process:
- Small estates (under $50,000 in probate property)can use the small-estate procedure under Md. Estates & Trusts §5-601 et seq. Faster and simpler.
- Regular estatesare administered through the Register of Wills and the Orphans’ Court — typically 6–12 months for an uncomplicated estate.
Maryland personal representative commissions and attorney fees are statute-based with regulatory caps; the structure is somewhat formulaic and predictable.5 Even so, probate is more involved than in pure informal-probate states, which makes the revocable trust more common in Maryland than in some neighbors.
If your parent moved to Maryland from another state
Out-of-state wills are generally valid in Maryland if valid where executed, but a Maryland review is wise:
- Out-of-state POAs are honored but may face friction at Maryland banks. A Maryland Statutory Form POA reduces friction.
- Estate plans drafted in states without an inheritance tax may name non-exempt beneficiaries (nieces, friends, partners) without realizing those bequests will be taxed in Maryland.
- Estates approaching the Maryland $5M exemption may face MD estate tax even if federal exposure is zero.
What to do this quarter
- Locate (or create) your parent’s four documents: POA, Advance Directive, Will, and (if appropriate) Revocable Living Trust.
- Audit beneficiary designations for inheritance-tax exposure. Identify any non-exempt beneficiaries.
- For net worth approaching $5M, schedule a Maryland estate- tax planning consultation.
- For our companion content on Maryland Medical Assistance planning and care-cost analysis, see the Maryland Medicaid guide and the Maryland care-settings guide.