Domestic Partnership and Inheritance Taxes
Updated: Jul 20, 2021
A domestic partnership, as described in the Maryland statute means a relationship between two people (opposite sex or same sex) who are at least 18 years of age, are not related to each other, are not married or in civil union or domestic partnership with someone else, and agree to be in a relationship of mutual interdependence (which means that each contributes to maintaining, supporting and helping the other and the relationship).
The Register of Wills is required by law to have documented proof of the domestic partnership. Valid proof of a domestic partnership is considered to be an Affidavit of Domestic Partnership supported by two additional documents to be chosen from a list provided by the Register.
In 2009, the Maryland Legislature passed a law adding “domestic partner” to the list of family members who are exempt from paying the 10% state inheritance tax on non-probate assets that pass from a deceased domestic partner.
The exemption only applies to a primary residence that is jointly titled and occupied by the partners at the time of the death of one partner. To qualify for the exemption, at the beginning of their marriage, couples should complete an Affidavit of Domestic Partnership to claim that they are domestic partners. The Affidavit must be signed before a notary public and held in a safe place.
The inheritance tax is imposed on the property’s value which passes from a decedent to certain beneficiaries. The tax is levied on jointly held property passing under a will, intestate laws of succession, and property passing under a trust, lease, joint ownership or otherwise. The Register of Wills in the county where the decedent either resided or owned property collects the tax.
As you can see, apart from the more common issues, there are several factors to consider when crafting an estate plan that not only protects your assets but protects your loved-ones after you are gone. For any questions related to your specific case and for an evaluation of your circumstances, schedule a consultation with our office and let's get started.