Maryland Governor Wes Moore’s proposed 2025 budget includes significant changes to the state’s estate tax laws, making now a critical time for residents to review their estate plans. With a lower estate tax exemption and other tax adjustments on the horizon, careful planning is essential to preserve wealth for future generations.
What’s Changing in Maryland’s Estate Tax Laws?
Maryland is the only state that imposes both an estate tax and an inheritance tax. Under Governor Moore’s proposal, the Collateral Inheritance Tax—which applies to certain transfers of wealth—would be eliminated. While this change may ease some tax burdens, another key provision will significantly lower the estate tax exemption, meaning more estates could be subject to taxation:
- Current Exemption: $5 million per individual ($10 million for married couples)
- Proposed Exemption: $2 million per individual ($4 million for married couples)
If enacted, these changes would take effect in July 2025, leaving a limited window for estate planning adjustments.
How Will This Impact Maryland Residents?
With a lower exemption threshold, more Maryland families could face higher estate tax liabilities. To minimize tax exposure and protect assets, individuals should proactively work with a team of professionals—including attorneys, accountants, wealth managers, and valuation experts—to develop a sound estate plan.
The Role of Valuation Professionals in Estate Planning
Effective estate planning requires a coordinated effort among attorneys, accountants, wealth managers, and valuation professionals to ensure compliance with tax laws, minimize tax liabilities, and facilitate the smooth transfer of assets. Valuation professionals provide objective, well-documented assessments necessary for estate and gift tax reporting.
A comprehensive valuation process helps determine the fair market value of privately held businesses, real estate, and other significant assets—critical for:
- Estate and Gift Tax Compliance: Accurate valuations ensure that estate transfers and gifts are properly reported to the IRS, reducing the risk of audits and penalties.
- Strategic Estate Structuring: Understanding asset values allows for tax-efficient wealth transfers, ensuring heirs receive the maximum benefit.
- Charitable Giving & Trust Planning: Reliable asset valuations support the structuring of charitable contributions and trusts to align with philanthropic goals.
Valuation professionals work closely with other estate planning experts:
- Attorneys rely on valuations to draft estate plans that comply with regulations and optimize asset distribution.
- Accountants incorporate valuation figures into tax filings, ensuring proper documentation and IRS compliance.
- Wealth managers use valuation insights to guide investment and asset transfer strategies, aligning estate plans with long-term financial objectives.
Valuation professionals help reduce the risk for the transfer of assets by using rigorous methods and following professional standards.
Ensure Your Estate Strategy is Ready for Change
With Maryland’s proposed tax changes on the horizon, now is the time to take a proactive approach to estate planning. If you need assistance determining the value of your business or other assets, Evergreen Advisors’ valuation experts are here to help. Contact us today to discuss how we can support your estate planning strategy.