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Maryland Reduces Evidentiary Requirements to Exempt Primary Residence of Domestic Partners from Inheritance Tax

On May 4, 2017, Maryland’s Governor signed into law H.B. No. 1104, effective July 1, 2017, reducing the evidentiary documentation required from domestic partners to evidence the qualification of their joint primary residence for the Maryland inheritance tax exemption.

Maryland law provides that, in a domestic partnership, the inheritance tax will not apply to the surviving domestic partner’s receipt of the predeceasing partner’s interest in the joint primary residence if the property (1) was held as a joint tenancy by both domestic partners at the time of death and (2) passes to or for the use of the surviving domestic partner.

As of July 1, 2017, to evidence a domestic partnership for purposes of qualifying a joint primary residence for Maryland’s inheritance tax exemption, the surviving domestic partner can provide EITHER (1) an affidavit signed under penalty of perjury by the two individuals stating that they established a domestic partnership (DP affidavit) OR (2) any two of the following documents of proof (DP proof documents):

  • Joint liability of the individuals for a mortgage, lease, or loan;

  • Designation of one of the individuals as the primary beneficiary under a life insurance policy on, or a retirement plan of, the other;

  • Designation of one of the individuals as the primary beneficiary of the will of the other;

  • Health care or financial durable power of attorney granted by one individual to the other;

  • Joint ownership or lease by the individuals of a motor vehicle;

  • Joint checking account, joint investments, or a joint credit account;

  • Joint renter’s or homeowner’s insurance policy;

  • Coverage on a health insurance policy;

  • Joint responsibility for child care, such as guardianship or school documents; or

  • Relationship or cohabitation contract.

Before enactment of this new law (and until July 1, 2017), the surviving domestic partner had to provide BOTH the DP Affidavit AND two DP proof documents to qualify for the exemption.

Cites:  See Md. Ann. Code § 6-101(b); Maryland H.B. 1104 (2017).

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