Maryland has made it cheaper to administer small estates proceedings by increasing the probate fee for regular estate proceedings. In an effort to alleviate the disproportionate financial burden on small estates the Maryland General Assembly passed House Bill 187. Small estates are those valued at $50,000.00 or less, unless a spouse is the sole legatee/heir, then a small estate is considered an estate valued at $100,000.00 or less. Regular estates are those valued above $50,000.00 or in the event the spouse is the sole legatee/heir, then above $100,000.00. So, effective October 1, 2022, if your loved one dies with a small estate there will be no probate fee. This does not apply for estates that are opened before October 1, 2022.
Probate assets are, generally, belongings, assets or properties that someone owns at the time of their death without any beneficiary or payable-on-death/transfer-on-death designations assigned. Probate assets are subject to the probate process, which is the administrative court proceeding that supervises the disposition of a decedent’s probate assets. To initiate the probate process, one needs to open a probate estate with the Register of Wills of the county in which the decedent domiciled at the time of their death. Therefore, if your loved one dies only owning assets that have designated beneficiaries who survived your deceased loved one, you would likely not need to open a probate estate since there are no probate assets. But, for example, if your loved one died owning several bank accounts in their name alone without any payable-on-death designations on those accounts, then those accounts are considered probate assets, subject to the probate process, and there is a need to open a probate estate.
The term estate for this blog piece is going to refer to the probate estate described above.
With the new law, for estates opened on or after October 1, 2022, there will be no probate fee for a small estate, and the new fee schedule applied to estates are as follows:
|Value of Probate Estate:||Probate Fee:|
|$10,000,000.00+||$10,000.00 plus .02% of the excess over $10,000,000.00|
Our estate attorneys employ various strategies to reduce the value of a probate estate, or avoid the probate process altogether. Some of these strategies include retitling property, designating beneficiaries on accounts/assets, and creating inter vivos revocable trust agreements (a/k/a Living Trusts). However, one size does not fit all. Depending on a person’s estate planning goals, the size and construct of their family, and the value and types of their assets and liabilities, our estate attorneys may advise someone to employ one or more of these strategies. It is also possible that the cost of avoiding probate outweighs the actual cost of the probate fee.
If you have created an estate plan and believe you may be impacted by this new law or would like to find out what strategies can be used to help minimize the financial burden of the new probate fee schedule, contact us today to schedule a consultation with one of our skilled estate planning attorneys.