Probate

The Law Office of Richard K. Abraham provides representation in Estate Administration and Orphans’ Court Representation.

Estate Administration, (Probate)

Probate is the court process for administering the estate of someone who died, resolving outstanding matters and overseeing the distribution of property in the estate.

Maryland probate doesn’t have to be overwhelming. An experienced probate attorney, can effectively and sensibly guide you through estate administration. The right procedure depends on the value of the probate estate and the number and age of those inheriting.

Estate administration can occasionally include more complex matters such as federal and state estate tax, will contests, and litigation. Hiring an experienced probate attorney can ensure every step is handled correctly, estate tax returns are filed, and the estate is properly distributed.

Richard K. Abraham meeting with clients at the conference table

Maryland Probate

Maryland estate administration should include, but may not be limited to:

Regardless of whether the asset comes into the estate (or not), determining the date of death value and ownership for everything you own at death
Completing all paperwork to open the estate
If required, obtaining the estate bond
Obtaining Letters of Administration, appointing the Personal Representative (executor)
Completing the Inventory or Schedule B, establishing the date-of-death values for estate assets
Completing the Information Report, establishing the date-of-death value of assets that pass to co-owners or named beneficiaries who are subject to Inheritance Tax
Paying all valid debts
Completing the Final Administrative Accounting
Distributing the net estate

Probate Court (Orphans’ Court) Representation

Probate court is called “Orphans’ Court” in Maryland. This court handles most probate litigation arising during estate administration. This Court works with that jurisdiction’s Register of Wills to ensure estates are properly administered. The Orphans’ Court also approves the final administrative accounting and the petitions for attorneys’ fees or Personal Representative’s commissions.

The most common cases litigated before the Orphans’ Court determine whether a Will is a valid document called a Caveat proceeding, deciding who should be appointed as Personal Representative in an intestate estate or a hearing to remove that person.

The attorneys at The Law Office of Richard K. Abraham provide dedicated representation in probate litigation, and offer consultation for anyone seeking a better understanding of these often complicated matters.

Probate: Estate Taxes

Little has changed since Benjamin Franklin stated: “In this world nothing can be said to be certain, except death and taxes.” Taxes that result from your death can include income tax owed for the year of your death, estate taxes based on the value of your what you own at death, estate income tax and inheritance tax. These are governed by complex federal and state laws.

Income Tax

Your death may not eliminate the necessity to prepare and file that year’s federal and state income tax returns. Those returns are signed by the Personal Representative to your estate. Your estate should also file state and federal income tax returns.

Estate Tax

Your estate may be subject to Federal Estate Tax (FET), which first became law in 1916. This tax is calculated on, the value of both probate and non-probate property you own at death. FET rates graduate upward based on the total value, minus any debt you owe on the asset. The current FET exemption is $15 million per person and $30 million per married couple. The FET exemption is indexed (increases) annually based the inflation rate.

If you believe your estate is subject to FET your estate will normally also be subject to Maryland Estate Tax (MET). It is possible for your estate to have an MET liability without owing FET.

Maryland first enacted its estate tax in 1929. Initially it was closely tied to FET which resulted in an occasional Maryland estate tax being collected. However, as the federal exemption amount rose; Maryland collected less and less estate tax. As a result, Maryland decoupled, (broke away from) from the FET in 2002.

Like the FET, MET is graduated based on what you own at death. The MET has a top rate of 16% on estates valued more than $1 million above the allowed exemption. The current MET exemption is $5 million per person and $10 million per married couple.

Today, Both FET and MET allow portability. (See Mr. Abraham’s video on this topic.)

Maryland Inheritance Tax, (MIT)

Maryland is the only state which has both Maryland Estate Tax and Inheritance Tax. MIT is levied on the act of inheriting. Unlike the estate tax, MIT doesn’t graduate by value. The fixed rate is 10%. As someone inheriting, MIT solely depends on your relationship to the Decedent. Today, MIT only applies to friends, nieces, nephews, cousins, aunts, and uncles, on what they inherit.

There are several ways to reduce or eliminate estate tax, no single method fits everyone, and each plan can be tailored to your goals and needs. The real question is: are you prepared for death and the taxes that may come with it? Planning ahead puts you in control of the answer as “Failing to Plan is Planning to Fail.”