Estate planning often feels like navigating uncharted waters, especially for domestic partners who historically lacked many of the legal protections afforded to married couples. Recent changes in Maryland law now provide new opportunities for domestic partners to protect their futures.
If you are two unmarried adults who meet the legal definition of “domestic partnership,” it is important for you to understand these developments, especially if you do not have an estate plan.
Expanded Estate Rights for Domestic Partners
As of October 1, 2023, Maryland expanded inheritance rights to “domestic partners,” a term applying to some unmarried adult cohabitants. Domestic partners without wills who register as domestic partners, pay the filing fee, and secure a Certification of Domestic Partnership can inherit from one another like a married couple without estate planning documents. Before this change in the law, the estates of domestic partners without wills were treated no differently than those of two unrelated individuals. They had no claim to their deceased partner’s assets unless that entitlement was provided for in a Will or other estate planning documents, and even then, their inheritances were subject to a 10% inheritance tax. This created significant estate planning hurdles for unmarried couples in Maryland.
Under the new framework, registered domestic partners are now entitled to inherit from one another’s estates in the absence of a will, including qualifying for a ten thousand dollar allowance. Domestic partners now also have priority when seeking an appointment as the Personal Representative (or executor) of their partner’s estate. These changes significantly benefit domestic partners, giving them a level of legal recognition that helps protect their financial stability after the death of their partner.
It’s important to note that while registered domestic partners gain these rights, they do not receive every benefit spouses enjoy. For example, spouses can claim an elective share of their partner’s augmented estate if they’re not satisfied with the terms of a Will, but this option is not currently available to domestic partners. Consequently, it is vital for Maryland domestic partners to have a lawyer help them draft estate planning documents instead of remaining without such documents and simply securing a Certification of Domestic Partnership. This new law is an additional estate planning tool for certain unmarried cohabitants in Maryland rather than a replacement for estate planning.
Inheritance Tax Exemption
One of the most beneficial elements of the new law is the full inheritance tax exemption for registered domestic partners. Historically, Maryland’s 10% inheritance tax applied to domestic partners inheriting from one another with limited exemptions for jointly owned primary residences.
The law now eliminates the inheritance tax for surviving registered domestic partners entirely, aligning their treatment with that of spouses and close family members. This exemption ensures that partners can inherit assets without worrying about a significant tax burden, creating greater financial security and peace of mind.
While these changes are beneficial, they do not replace the need for estate planning documents. A Certification of Domestic Partnership and even a Domestic Partnership Agreement, though helpful, cannot substitute for documents like Wills, Trusts, Advance Medical Directives, and Financial Powers of Attorney. These documents provide clarity about your wishes, designate trusted individuals to act on your behalf when you cannot, and can help save your loved ones time, money, and stress.
Have Us Help You Plan Your Future
Your domestic partnership deserves the same care and protection as any other long-term relationship. I can help ensure your estate plan takes full advantage of Maryland’s recently updated laws on domestic partnerships. Contact Navigate Law Firm to schedule a consultation and take the first step in protecting your family, property, and legacy.
