SimplyTrust Knowledge Base

A: The Maryland estate tax is a tax on the transfer of assets from someone who has passed to their heirs or beneficiaries. It applies when the value of the estate exceeds a certain threshold, known as the exemption amount.As of 2024, Maryland’s estate tax exemption is $5 million. This means if your taxable estate is valued below that amount, no Maryland estate tax is due. If it’s above $5 million, the excess amount may be taxed at rates ranging from 0.8% to 16%, depending on the total value of the estate.Importantly, Maryland does not index its exemption to inflation, unlike the federal estate tax. This means the exemption amount may stay the same even as asset values rise over time.

A: A revocable living trust lets you keep control during life and name who handles things after a passing. Assets titled to the trust generally avoid probate, which can save time and paperwork. These points hold true in both states. The limits also match: revocable trusts typically don’t offer asset protection.However, Nevada supports “directed” trust structures (investment or distribution advisers, trust protectors) and robust decanting options. These are tools that can add flexibility if an estate later becomes complex. While these features matter most with irrevocable trusts, they help shape trustee selection and administrative choices even for revocable trusts that may become irrevocable later. Also, Maine is a common-law (equitable distribution) state, which influences how spouses own and retitle assets to a trust. Nevada is a community-property state and even allows community property with right of survivorship, a form of title that can coordinate with trust planning.

A: An inheritance tax is paid by beneficiaries, often at different rates depending on their relationship to the person who has passed. An estate tax, on the other hand, is calculated on the total taxable estate before assets are distributed. Maine is among the states that skip inheritance taxes altogether and rely solely on an estate tax with a high threshold.Maine once had an inheritance tax, but lawmakers began moving away from it in the early 1980s. In 1981, the Legislature passed legislation to transition away from the old system. For deaths after June 30, 1986, the inheritance tax was fully replaced by the Maine estate tax. Later statutory clean-up formally repealed remaining inheritance-tax provisions.

A: Yes. The tax applies to the Maine taxable estate, which starts from federal concepts and then adds state-specific adjustments. Maine uses brackets of 8%, 10%, and 12% on amounts above the exclusion.Maine once used an inheritance tax. In 1981, lawmakers enacted a reform to phase down the inheritance tax and replace it with an estate tax tied to federal mechanics. That change became fully effective for passings after mid-1986, and the state has updated thresholds over time. Maine Revenue Services lists historical exclusion amounts, showing the rise from $1,000,000 in the late 2000s to $7,000,000 today.

A: A revocable living trust is primarily a probate-avoidance and incapacity-planning tool. You stay in control, and you can change or revoke it anytime. That’s true in both Kentucky and Nevada. Revocable trusts are usually “grantor trusts.” That means trust income is reported on the grantor’s personal return, regardless of where the trust is based. If a Kentucky resident creates a Nevada revocable trust, the income is still taxed to the Kentucky resident at the personal level. For everyday families, revocable trusts in Kentucky versus Nevada function much the same: they streamline transfers and keep affairs organized. Key distinctions arise from Kentucky’s inheritance tax exposure for some beneficiaries and Nevada’s community-property system and tax climate.

A: Kentucky does not impose a separate estate tax on the estate itself. Instead, the Kentucky inheritance tax is a tax on the right to receive property, and the amount owed depends on who receives it. Two heirs can face different outcomes on the same asset, depending on their relationship to the person who passed.Kentucky adopted an inheritance tax in 1906, making it one of the state’s oldest General Fund taxes. Over time, lawmakers refined exemptions and rates. A major update in 1995 fully exempted “Class A” beneficiaries and expanded that class to include siblings alongside spouses, children, stepchildren, grandchildren, and parents. This change shifted the burden toward more distant relatives and unrelated heirs, where the tax still applies today. Kentucky groups beneficiaries into classes. Class A beneficiaries are fully exempt. That generally includes a spouse, children, stepchildren, grandchildren, parents, brothers, and sisters. No return is required when only Class A beneficiaries inherit; courts often accept an affidavit of exemption instead of a tax filing. Class B beneficiaries include certain relatives such as nieces, nephews, aunts, uncles, sons-in-law, daughters-in-law, and great-grandchildren. They get a small exemption and then pays graduated rates. Class C is everyone else not in A or B. They get an even smaller exemption and faces slightly higher starting rates.

A: Before 2005, states could “pick up” a credit against the federal estate tax. The 2001 federal tax law phased out that credit, and Kentucky’s linked estate tax went dormant. Later federal legislation cemented the change, keeping the state estate tax at zero unless Kentucky enacts a new stand-alone tax—which it hasn’t. Kentucky’s inheritance tax remains in force, and the state updates it periodically. For example, the Department of Revenue’s 2025 guidance reiterates how transfers to non-exempt beneficiaries can be taxable, including certain gifts made within three years of someone’s passing. Beneficiaries in “Class B” and “Class C” may face exemptions as low as $1,000 or $500 with graduated rates up to 16%.