SimplyTrust Knowledge Base

A: Both states allow revocable living trusts, but there are a couple things to keep in mind.Maryland taxes revocable trusts as grantor trusts, which means income from the trust is taxed to the person who created it. Meanwhile, the state levies income, estate, and inheritance taxes. In fact, Maryland is the only state in the union that has both an estate tax and an inheritance tax. Therefore, there are no state-specific tax benefits to establishing a revocable trust in Maryland. Meanwhile, Nevada is a trust and tax powerhouse. It offers flexible trust administration rules, some of the best trust privacy protections in the country, strong asset protection, and easy trust modification through its decanting laws. Meanwhile, the state does not levy an income, estate, or inheritance tax. The state is the best choice for many people setting up trusts, even if they don’t live in the state. (Yes, you can set up a trust in Nevada no matter where you live in the United States.)

A: Have you ever thought about what will happen to your assets after you’re gone? If you don’t have a clear estate plan, you could be setting your family up for disputes. Without a valid Will, your assets may be distributed according to state laws that might not align with your wishes, leaving your loved ones in confusion and conflict.

A: While many people confuse it with the estate tax, the two are entirely different. The estate tax is paid by the estate. The inheritance tax is paid by the person receiving the assets, depending on their relationship to the person who passed.The Maryland inheritance tax is a tax on the right to receive property from someone’s estate. It applies to most types of inherited property—including money, real estate, personal belongings, and even business interests—unless the recipient is exempt. The tax rate is 10% of the value of the inherited property, and it applies only to non-exempt beneficiaries. That means who inherits the assets matters just as much as what they inherit.Maryland exempts many close family members from inheritance tax. These beneficiaries do not pay: spouses, children (biological, adopted, or stepchildren), parents and grandparents, siblings, grandchildren, and spouses of children and grandchildren. Everyone else, however, is generally subject to the tax: nieces and nephews, cousins, friends, unmarried partners, and in-laws.

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.