Administration of Estates in Maryland

Overview

ezProbate.com does not offer legal advice. This webpage is intended to help assist you in gaining knowledge about the Maryland Probate Process and aid you in determining whether it would be in your best interest to hire an ezProbate Attorney. If you have additional questions or a specific situation not addressed below, please contact the ezProbate Attorney (contact form) or the Register of Wills before you proceed. ESTATES AND TRUSTS LAWS ARE SUBJECT TO CHANGE BY THE LEGISLATURE AT ANY TIME.

Forms and procedures described below are mandated by Maryland Code and Maryland Rules. (Forms are available from the Register of Wills Office or you may hire an attorney to assist you.)

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Legal Requirements

If a person dies owning any property in his or her name alone or as tenants in common it is necessary to open an estate and report all assets to the Register of Wills office.  The assets in the name of the decedent alone or as tenants in common determine the type of estate that is required.  (See Types of Estates below for further information). 

Maryland law requires that the custodian of a document appearing to be the last Will (including Codicils, if any) of the decedent shall file it promptly with the Register of Wills in the county where the decedent was domiciled at the time of death, even if it is not to be offered for probate.

Even if the decedent did not have any property in their name only or as tenants in common you are still required to file the will with the Register of Wills office in the county in which the decedent had his or her domicile at the time of his or her death. A custodian who willfully fails or refuses to deliver a will to the register after being informed of the death of the testator/testatrix is liable to a person aggrieved for the damages sustained by reason of the failure or refusal.   

A Personal Representative must be appointed by the Register of Wills or the Orphans' Court before disposing of any assets. When appointed, Letters of Administration will be issued to the Personal Representative.

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Who handles the administration?

Appointment of Personal Representative  

 

The Register of Wills may admit the will to probate and appoint a personal representative.  The duties and powers of a personal representative commence upon the issuance of Letters of Administration. In granting letters the register observes an order of priority as established in Maryland law.  The usual order begins with persons named in a will, spouse, children, etc., to creditors or any other person.  Maryland law has established restrictions on the right to letters of administration.    The following is a partial list of some of the persons excluded:

  1. under the age of 18 years;
  2. mentally incompetent;
  3. convicted of a serious crime;
  4. not a citizen of the United States unless the person is a permanent resident of the United States and is:

(a) spouse of the decedent;

(b) an ancestor of the decedent;

(c) a descendant of the decedent; or

(d) a sibling of the decedent.

Upon appointment, the Register of Wills office will issue a schedule of mandatory filing deadlines.  As the personal representative of a regular estate you are required to make a reasonably diligent effort to ascertain the names and addresses of the decedent’s creditors, and mail or deliver a notice to those creditors.  The person representative is also required to file: within 20 days, sufficient copies of the notice of appointment provided to you by the newspaper for mailing by this office to all interested persons; within three months of appointment the Inventory and Information Report; and within nine months of appointment the Accounting.  Unless a complete and accurate list of interested persons was previously filed, a list of interested persons with correct addresses including zip codes and a contact person for organizations listed must also be filed within 20 days.   

A nonresident of the State cannot qualify to be appointed personal representative unless on file with the Register of Wills office is an irrevocable designation by the nonresident of an appropriate person who resides in the State. That person upon signing a form with their address then becomes the resident agent.  The only responsibility of the resident agent is to accept service of process in the same manner and with the effect as if it were served personally in the State on the nonresident. 

Responsibilities of a Personal Representative

The personal representative of an estate has a fiduciary obligation to settle the estate and distribute the assets as promptly as possible, in accordance with the terms of the will or the laws of intestacy.

The position of personal representative is one of confidence, trust and good faith.  It is held to the highest standard of care acknowledged by the law.  The personal representative may incur personal liability if he/she fails to meet this standard.

Powers and Duties of a Personal Representative

The personal representative may exercise the authority granted him/her by statute or in the will, without approval of the court.

These powers include: receiving and holding assets, depositing funds, depositing assets in restricted accounts, satisfying charitable pledges made by the decedent, paying or compromising claims, paying funeral expenses and other debts or expenses, paying taxes, insuring property, investing or selling property, continuing a business, performing contracts entered into by the decedent, employing specialists to advise or assist, and making partial or final distributions during the administration of the estate.

Other powers may be granted to the personal representative by the court upon written request.

In addition to the above powers, the personal representative has a statutory obligation to timely file all required documents, comply with all court orders, and give proper notice to interested persons when necessary.

A personal representative may appraise the following: 

  1. Motor Vehicles – Instead of an appraisal of the fair market value, a motor vehicle may be valued by a personal representative on the basis of the average value of the motor vehicle set forth in:  (a) The 
    National Automobile Dealers’ Association official used car guide; or (b) any substantially similar price guide designated by the register;  
  2. Corporate stocks listed on a national or regional exchange or over the counter securities;
  3. Debts owed to the decedent including bonds, notes and loans made by the decedent to others which remain unpaid;
  4. Bank Accounts and money; and
  5. IRAs, annuities and life insurance proceeds payable to the estate or which have no named beneficiary.
A personal representative must obtain an appraisal by a qualified and disinterested appraiser for all other categories. Instead of an appraisal real and leasehold property may be valued at the full cash value for property tax assessment purposes, as of the most recent date of finality. (This valuation method cannot be used for farmland, woodland, or national registry land.)

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Who oversees the process?

Register of Wills

The Register of Wills is a public office established under the Constitution of Maryland. The Constitution provides for a Register of Wills in each county and Baltimore City.  The Register is elected every four years.  The Register of Wills, or designated employee, may assist and advise any person in the preparation of forms for administrative probate; but are prohibited from rendering legal advice.

Orphans’ Court 

In some jurisdictions the Circuit Court sits as the Orphans’ Court, while in other jurisdictions, there is a dedicated Orphans’ Court.  The Judges of the Orphans’ Court hear matters involving controversial estates and judicial appointments.  The Orphans’ Court approves accounts, and in cases where a petition is required awards personal representative’s commissions and attorney’s fees.  The Orphans’ Court may determine the validity of wills and title to personal property not exceeding $20,000.00 in value.

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Types of Estates

SMALL ESTATES
 Assets subject to administration valued at $30,000 or less ($50,000 if the spouse is the sole legatee or heir)

(FOR PERSONS DYING ON OR AFTER JANUARY 1, 1998 ONLY, Small Estate value is determined by the fair market value of property less debts of record secured by the property, as of the date of death, to the extent that insurance benefits are not payable to the lien holder or secured party for secured debt.)

  1. Petition for Probate with Schedule B attached (Required appraisals must be submitted. The value of each item shall be fairly appraised as of the date of death. The Personal Representative may appraise corporate stocks listed on a national or regional exchange or over-the-counter securities, debts owed to the decedent, bank accounts, building or savings and loan association shares, and money. All other assets must be appraised by qualified disinterested appraisers. For persons dying on or after January 1, 1998, an alternate procedure is available for valuing real estate.)
  2. List of Interested Persons listing the names and addresses of those named in the Will, if any, and those who would inherit if there were no Will. (See "How Will My Property Be Distributed If I Die Without A Will?" )
  3. Consent to Appointment of Personal Representative (Only applicable if the person named in the Will, if any, or the person entitled to appointment, is not applying.)
  4. Appointment of Resident Agent if petitioner is not a Maryland resident
  5. Proof of Execution of Will if Will lacks an attestation clause
  6. Information Report listing trusts, jointly held property, retirement and P.O.D. accounts, gifts made within two years of death, and other non-probate property
  7. Notice of Appointment ~ Notice to Creditors designating an approved newspaper for publication may be required for certain small estates. (Leave dates blank except date of death.)
  8. Bond (Required in certain small estates.)
  9. Paid funeral bill
  10. Copy of death certificate (available from Division of Vital Records)
  11. Commissions are not available under a Small Estate administration.
  12. Petition for Probate with Schedule C attached A request for a Limited Order to locate the Assets or locate the Will requires the name, address and a statement as to why the limited order is necessary. The limited order will either allow the search for assets titled in the name of the decedent or the entrance of the safe deposit box in the presence of the Register of Wills or authorized deputy to locate the Will for delivery to the office.

Fees will be assessed according to the following schedule. If more than four Letters of Administration are required, an additional fee of $1.00 each will be charged. The estate shall pay the expense of mailing the Notice of Appointment. Fees shall be assessed on the value of the small estate at the following rates:

Estate is at least: But less than: The Fee is:
0 200 $ 2
200 5,000 1% of the value of the small estate
5,000 10,000 $ 50
10,000 20,000 $ 100
20,000 50,000 $ 150
 

REGULAR ESTATES
 Assets subject to administration in excess of $30,000 ($50,000 if the spouse is the sole legatee or heir)

  1. Petition for Probate with Schedule A attached
  2. Notice of Appointment ~ Notice to Creditors designating an approved newspaper for publication (Leave dates blank except date of death.)
  3. Bond (Required by law. )*
  4. Consent to Appointment of Personal Representative (Only applicable if the person named in the Will, if any, or the person entitled to appointment, is not applying.)
  5. Appointment of Resident Agent if petitioner is not a Maryland resident
  6. Proof of Execution of Will if Will lacks attestation clause
  7. List of Interested Persons** (names and addresses of those named in the Will, if any, and those who would inherit if there were no Will as set forth in "How Will My Property Be Distributed If I Die Without A Will?" )
  8. Copy of death certificate (available from Division of Vital Records)

*In Judicial Probate, this form must be filed immediately after the Court appoints a Personal Representative or a Special Administrator.

**Must be filed (a) within 20 days after appointment of a Personal Representative under Administrative Probate, or (b) at the time of filing a Petition for Judicial Probate.

It is the duty of every Personal Representative or Special Administrator of a regular estate to timely file the following documents in the Register of Wills Office:

Inventory and Information Report-WITHIN THREE MONTHS from date of appointment, a complete Inventory with Schedules and an Information Report (see #6 under Small Estates) along with the required appraisals, must be submitted. The value of each item shall be fairly appraised as of the date of death and stated in the Inventory. The Personal Representative may appraise corporate stocks listed on a national or regional exchange or over-the-counter securities, debts owed to the decedent, bank accounts, building or savings and loan association shares, and money. All other assets must be appraised by qualified disinterested appraisers. (For persons dying on or after January 1, 1998, an alternate procedure is available for valuing real estate.)

First Account-WITHIN NINE MONTHS from the date of appointment, the First Account must be filed. The Account must include the inventoried assets and all activity of the administration. All receipts, including income, sales and redemptions, disbursements, distributions, and value of assets remaining in the hands of the Personal Representative must be reported. Documentation of transactions is required.

Subsequent Accounts-MUST BE FILED as required by law until the estate is closed.

Petitions for Personal Representative Commissions and Attorneys Fees- Fees and commissions are subject to Court approval UNLESS the person died on or after January 1, 1998 AND (1) each creditor, who has filed a claim that is still open, and all interested persons consent in writing to the payment; (2) the combined sum of commissions and attorneys fees does not exceed the amounts provided below; and (3) the signed written consent form states the amounts of the payments and is filed with the Register of Wills.

Commissions may not exceed those computed as follows:

If the property subject to administration is: The commission may not exceed:
Not over $20,000 9.0%
Over $20,000 $1,800 plus 3.6% of the excess over $20,000
 
 

Fees-The following fees will be assessed at the time of filing the First Account. Additional fees will be assessed when filing each subsequent Account if the probate estate increases. The value of the probate estate is the sum of all Inventories, principal and income receipts, and increases realized on a disposition, less decreases realized (other than a distribution to beneficiaries). While the probate fee covers the cost of filing and recording documents in non-controversial estates, additional fees will be charged in controversial estates and for more than twelve Letters of Administration or two certified copies of the Will. The estate shall pay the expense of mailing the Notice of Appointment.

Value of probate

Estate is at least:

But less than: The Fee is:
0 10,000 $ 50
10,000 20,000 $ 100
20,000 50,000 $ 150
50,000 75,000 $ 200
75,000 100,000 $ 300
100,000 250,000 $ 400
250,000 500,000 $ 500
500,000 750,000 $ 750
750,000 1,000,000 $ 1,000
1,000,000 2,000,000 $ 1,500
2,000,000 5,000,000 $ 2,500
5,000,000 ---- $ 2,500 plus

.02% of excess over $5,000,000

 

MODIFIED ADMINISTRATION
 For persons dying on or after October 1, 1997, Modified Administration is an option available to a Personal Representative within three months from the date of appointment. The process, which is to be completed within twelve months, is available only if all residuary legatees or heirs are exempt from inheritance tax or the decedent's personal representative and all trustees of any trusts are limited to the decedents Personal Representative, spouse and children, and if the estate is solvent and sufficient assets exist to satisfy all testamentary gifts. All of the stated persons must file a written consent. (Forms and reporting requirements are different from those noted above under Regular Estates.)

FOREIGN PERSONAL REPRESENTATIVE
 When the decedent died domiciled other than in Maryland owning real property in Maryland at the time of death, the person appointed Personal Representative in that jurisdiction shall file an Application by Foreign Personal Representative to Set Inheritance Tax with the Register of Wills for the county where the largest part in value of the Maryland property is located. This form, which lists the necessary requirements for filing, may be obtained from any Register of Wills Office in Maryland. Probate fees, costs and inheritance taxes will be assessed by the Register.

Commencing on appointment until the time for filing claims has expired, the Personal Representative shall make a reasonably diligent effort to ascertain the names and addresses of the decedent's creditors and mail or otherwise deliver to them a copy of the Notice of Appointment-Notice to Creditors.

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Taxes

INHERITANCE TAXES
(Effective for persons dying on or after July 1, 2000. Different laws apply for persons dying prior to that date.)

Property subject to inheritance tax:

  1. Property passing by Will or under the laws of intestacy
  2. Any interest as a joint owner (other than a surviving spouse) in any real or personal property, including credit union, bank, or other financial institution accounts
  3. A material part of the decedent's property transferred by the decedent within two years of death (other than a bona fide sale) in the nature of a final disposition or distribution, including any transfer that resulted in joint ownership of property, if the transfer is made in contemplation of death
  4. Property over which the decedent retained any dominion at the time of death, including a beneficial interest, a power of revocation, or a power of appointment by Will or otherwise. This includes trusts, P.O.D. accounts, annuities or other public or private employee pension or benefit plans that are taxable for federal estate tax purposes, life estates and other interests less than absolute, in trust or otherwise.
Exemptions from inheritance tax::
  1. Property that passes from a decedent to or for the use of a grandparent, parent, spouse, child or other lineal descendant, spouse of a child or other lineal descendant, stepparent, stepchild, brother or sister of the decedent, or a corporation if all of its stockholders consist of the surviving spouse, parents, stepparents, stepchildren, brothers, sisters, and lineal descendants of the decedent and spouses of the lineal descendants
  2. Life insurance benefits not payable to the estate of the insured
  3. Grave maintenance up to $500 passing under a Will for the perpetual upkeep of graves
  4. Property passing to a non-profit organization which is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code if incorporated in Maryland or if there is a reciprocal agreement with the jurisdiction where the organization has its principal office
  5. State, county or municipal corporations
  6. Property administered under a Small Estate proceeding
  7. Property passing to any one person not exceeding a total of $1,000
  8. Personal property of a non-resident with the exception of tangible property located in Maryland
  9. Income, including gains and losses, accrued on probate assets after the date of death of decedent (However, it is reportable to the State of Maryland as estate income.) (# 9 became effective January 1, 1998.)

Lineal Tax Rate applies to distributions to lineal heirs or legatees from a decedent dying prior to July 1, 2000, and may be obtained by contacting the Register of Wills Office.

Collateral Tax Rate of 10% applies to property passing to persons or organizations not identified as exempt. If the decedent died prior to July 1, 2000, brothers and sisters are included in collateral, however, their rate varies and is determined by the date of death.

ESTATE TAXES
 (Subject to change by the legislature) The Maryland estate tax return must be filed within nine months of the decedent's date of death unless an extension has been granted by the Comptroller's Office.

The filing requirement varies depending on the year of the decedent's death. Generally, a return is required for every estate whose federal gross estate, plus adjusted taxable gifts, is equal to or greater than the minimum filing requirement if the decedent at the date of death was a Maryland resident or a nonresident but owned real or tangible personal property having a taxable situs in Maryland.

Year Gross estate
2002-present $1,000,000
2000-2001 $675,000
1999 $650,000
 

Gross estate

The gross estate includes all property, real or personal, tangible or intangible, wherever situated, in which the decedent had an interest. It includes such items as annuities, joint assets with right of survivorship, transfers made without adequate consideration, the includible portion of tenancies by the entirety, certain life insurance proceeds, and general power of appointment property, to name a few.

Probate estate

The probate estate is property of the decedent owned individually or as tenants in common. Non-probate property is property that passes by the terms of the instrument under which it is held or by operation of law. The total gross estate for estate tax purposes includes probate and non-probate property. To determine the value of the gross estate, visit the IRS Web site and review § 2031 of the Internal Revenue Code.

Form MET-1

You must complete the federal estate tax return first before filing the Maryland estate tax return. If the estate is not required to file a federal return, you must still complete a pro forma federal return. Using information from the federal return, you should complete the Maryland estate tax return, Form MET-1. Form MET-1 must be filed with the Register of Wills office for the county in which the estate is being administered. For nonresident decedents, this is the jurisdiction in Maryland where the decedent's property is located.

Use the form appropriate for the date of the decedent's death:

2008: http://forms.marylandtaxes.com/08_forms/MET-1-2008.pdf

2007 and prior: contact the ezProbate attorney for your state.

Payment

The estate tax payment should be paid directly to the Comptroller of Maryland on or before the due date of the Maryland estate tax return. The payment should not be sent to the Register of Wills.

Interest and Penalty Charges

If the Maryland estate tax liability is not paid on or before the due date of the estate tax return, Maryland law provides for the assessment of interest and late payment penalty. There is also a penalty for undervaluation of assets.

Interest

The interest rate is set annually and applies to late payments, including an increase in the tax that is due to a change resulting from action taken by IRS or the estate, and to payments made under an alternative payment schedule. For current interest rates, see Administrative Release No. 14 - Interest Rates for Refunds and Delinquent Taxes.

Penalty

A penalty not exceeding 10 percent of the unpaid tax will be assessed if the tax is paid after the due date. A penalty of 25 percent will be assessed for failure to comply with a notice and demand for a return. In addition, the Comptroller shall assess a penalty of 25 percent of the amount of the underpayment of tax which is attributable to any substantial estate tax valuation understatement. A substantial estate tax valuation understatement occurs if the value of any property claimed, or should have been claimed, is 60 percent or less of the amount determined to be the correct amount of that valuation. The underpayment penalty cannot be assessed unless the portion of the underpayment attributable to substantial estate tax valuation is greater than $5,000.

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How will my estate be distributed if I die without a Will?

IF THE DECEDENT IS SURVIVED BY:

  1. Spouse and minor children of the decedent- spouse receives one-half, children share remaining one-half

  2. Spouse and children (all adult) of the decedent-spouse receives $15,000 plus one-half of remaining estate-children divide balance (the interest of a predeceased child passes to issue of that child)

  3. Children only of the decedent-children (does not include step-children) divide entire estate (the interest of a predeceased child passes to issue of that child)

  4. Spouse and parents of the decedent- spouse receives $15,000 plus one-half of remaining estate-both parents divide balance or surviving parent takes balance

  5. Spouse of the decedent without other heirs listed above-spouse receives entire estate

  6. Parents of the decedent without other heirs listed above-both parents divide entire estate or surviving parent takes all

  7. Brothers/sisters of the decedent without heirs listed above-brothers and sisters divide estate equally (share of deceased sibling goes to their issue-nieces and nephews of the decedent)

  8. Grandparents without other heirs listed above-grandparents divide entire estate or, if deceased, to their issue (see applicable law for details)

  9. Great-grandparent without other heirs listed above-great-grandparents divide entire estate or, if deceased, to their issue (see applicable law for details)

  10. Step-children-if there are no heirs listed above

  11. No living heirs or step-children-If decedent was a recipient of long-term care benefits under the Maryland Medical Assistance Program at time of death, net estate is paid to Department of Health and Mental Hygiene. Otherwise, the net estate is paid to the Board of Education.

All references to "Estate or Administration", only control assets that are in the decedent's name alone or as tenants in common. 

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