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Maryland estate tax is due within nine months of a death, and Maryland taxes estates above $5 million at rates reaching 16 percent. If the value is locked up in a house and a business, the people you leave behind have three options: sell something quickly, borrow against it, or scramble. Families rarely get a good price on a forced sale, and the ones who end up there almost never saw it coming.
There is a second version of the same problem inside family businesses. A plan that divides everything equally on paper can be deeply unequal in practice when one child has spent fifteen years in the business and another has not. Without a buy sell agreement and a written succession plan, that disagreement gets settled after you are gone, by people who are grieving.
Both problems have well established solutions, and every one of them has to be put in place years ahead. Life insurance held in the right structure creates cash without adding to the taxable estate. A residence trust can move a high value home to the next generation at a reduced transfer cost. Staged lifetime gifting shifts value while you are still here to direct it.
Cliff Cohen is admitted to practice in Maryland, the District of Columbia, Florida, Massachusetts, and Illinois, which matters more than it sounds for Potomac families who keep a place in Florida or maintain ties to another state. Property in a second state can trigger an entirely separate probate proceeding unless it is titled to avoid one.
He opened the firm in 1981 and has concentrated on estate planning, elder law, and business planning ever since. He earned his law degree at the University of Miami and studied business at Boston University. He serves with the Estate and Trust Section of the Montgomery County Bar Association, belongs to the Trusts and Estates Section of the D.C. Bar, and has spoken to professional groups on advanced planning with life insurance and business succession.
Design, drafting, and signing are handled by Cliff personally. Clients regularly bring adult children into the first meeting, and we encourage it, because a plan works better when the people who will administer it already understand it.
If the total, counting real property, retirement accounts, business value, and life insurance, approaches $5 million, Maryland estate tax is a live issue no matter what your federal exposure looks like. That is a much lower bar than most people assume.
It can, and it is one reason Cliff maintains Florida admission alongside Maryland and the District. Out of state real property often requires a second probate in that state unless it is titled correctly.
Yes, and we prefer to. Plans fail at the seams between professionals, so coordinating the tax picture, the account titling, and the legal documents is part of the job.
A will becomes a public record once it is filed. A properly funded trust does not. For families who would rather their affairs stay out of a searchable county file, that difference is usually decisive.
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5335 Wisconsin Ave NW #440, Washington, DC 20015