Maryland and DC Estate Tax Planning

Maryland Estate Tax Planning 

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Smart Strategies to Preserve More of What You’ve Built

If your estate exceeds $5 million, your heirs could face significant estate tax liability—even if your assets are primarily in real estate, retirement accounts, or a family business. Maryland and the District of Columbia are one of the few jurisdictions that impose their its own estate tax, separate from the federal system.



At Eleff Law, we help individuals and families across all Maryland counties as well as DC understand how estate tax works in Maryland and DC—and implement proactive strategies to reduce or eliminate the burden.

Estate Tax Basics

Maryland Estate Tax Exemption (2026):

  • Approx. $5 million per person
  • No portability between spouses (unlike federal law) for DC
  • Tax rates range from 0.8% to 16% on the taxable estate
  • Applies to all Maryland and DC residents

Even if you don’t consider yourself “ultra-wealthy,” you may reach the threshold quickly when factoring in:

  • Real estate value
  • Retirement accounts and life insurance
  • Business interests
  • Investment portfolios

Without planning, the estate tax could cost your heirs hundreds of thousands of dollars—or more.

Who Needs Estate Tax Planning?

We recommend a formal estate tax plan if:

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Your total estate is valued at $3.5 million or more (you’re approaching the threshold)

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You own real estate in Montgomery, Frederick, or Howard County

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You are widowed or divorced, and lack portability protections

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You hold significant IRAs, 401(k)s, or business equity

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You want to preserve assets for children or grandchildren without a tax drain

Proactive planning now can prevent rushed decisions, forced sales, or unnecessary court involvement later.

Common Estate Tax Planning Strategies

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Credit Shelter Trusts (Bypass Trusts)

Allow married couples to shelter the first spouse’s $5M exemption from being wasted—essential in Maryland since portability doesn’t apply.

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Gifting Strategies

Make use of the federal annual gift tax exclusion ($18,000 per person in 2024) and lifetime gift tax exemption while it’s still high.

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Irrevocable Life Insurance Trusts (ILITs)

Keep large life insurance payouts out of your taxable estate, protecting liquidity for your heirs.

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Charitable Remainder Trusts (CRTs)

Allow you to reduce estate tax exposure while supporting causes you care about and receiving income during your lifetime.

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Family Limited Partnerships (FLPs)

Transfer business or real estate interests to the next generation at a discount while maintaining control and reducing estate size.

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Generation-Skipping Trusts

Help transfer wealth to grandchildren or future generations while avoiding repeated taxation at each generational level.

Every client’s situation is different. We’ll help you implement the strategies that make the most sense for your family, asset mix, and long-term goals.

Coordinate Across State Lines

If you:

  • Own property outside Maryland
  • Are moving into or out of the state
  • Have out-of-state heirs or executors

…your plan must account for multi-jurisdictional rules. We guide clients in structuring plans that hold up across state lines and avoid unnecessary probate or taxation in multiple places.

Preserve Wealth. Minimize Tax. Maximize Control.

You’ve worked hard to build your legacy. We’ll help ensure more of it goes where you want—not to the state.

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Bethesda • Silver Spring • Frederick

Contact Attorney Susan Eleff to build a customized estate tax plan tailored to Maryland law by calling our office or filling out our online contact form. A free initial consultation of up to 15 minutes is available.