Inheriting a House in Maryland: Probate, Taxes, and Selling

You inherited a house in Maryland - here’s what actually happens

First, take a breath. Nothing about the house has to be decided this week. The property does not vanish, the state does not seize it, and the mortgage company generally cannot demand immediate payoff just because the owner died.

Maryland runs probate through the Register of Wills and the Orphans’ Court in each county (and Baltimore City), with a regular track and a lighter small-estate track. What happens next depends on how the owner held title. A house in a living trust or held in joint tenancy or tenancy by the entirety can pass without probate. A house solely in the deceased person’s name usually goes through probate. Maryland is one of only a couple of states with both an estate tax and an inheritance tax, so the tax section below matters more here than in most places. And if you live out of state, which is common with inherited Maryland property, all of this can be handled remotely.

Does it go through probate?

Not always. The off-ramps:

• Living trust. A house held in a revocable living trust passes outside court. The successor trustee transfers or sells it directly.
• Joint tenancy or tenancy by the entirety with survivorship. A surviving spouse or co-owner takes title automatically. Married couples commonly hold the home as tenants by the entirety, which passes to the survivor outside probate.
• No transfer on death deed. Maryland does not authorize transfer on death (beneficiary) deeds for real estate. There is no recorded-deed shortcut, so a solely owned house without survivorship or a trust generally goes through probate.
• Small estate procedure. Maryland’s small estate track is available when the probate estate is $50,000 or less (or $100,000 or less when the surviving spouse is the sole heir). Unlike some states, Maryland’s small estate procedure can include real property valued within the limit - but most houses exceed it, so they land in regular estate administration.

If the house was solely owned and above the small estate limit, it goes through regular probate.

The Maryland probate timeline

Maryland probate is moderately paced:

1. Opening the estate (weeks 1-6). The will (if any) and a petition are filed with the Register of Wills in the county where the person lived, and a personal representative is appointed and issued “letters.”
2. Notice and inventory (months 1-3). The representative publishes notice to creditors, notifies interested persons, and files an inventory of estate assets, including the house, within three months of appointment.
3. Creditor and tax period (months 2-6). Creditors generally have six months from the date of death to file claims. Any Maryland inheritance tax is paid through the Register of Wills, and an estate tax return is prepared if the estate is large enough.
4. Accounting and closing (months 6-12+). The representative files accountings, settles debts and taxes, and distributes what remains.

A regular estate commonly runs nine months to over a year. The six-month creditor period and the inheritance tax accounting set a practical floor.

Taxes when you inherit

Maryland is unusual: it has both an estate tax and an inheritance tax. Most families still owe neither, but it is worth understanding both.

Maryland estate tax. The estate itself owes Maryland estate tax only if it exceeds $5 million (a flat exemption that has not changed since 2019 and is not indexed for inflation, and is not portable between spouses). Estates below $5 million owe no Maryland estate tax. Federal estate tax starts far higher, at $15 million per person (2026).

Maryland inheritance tax - depends on who inherits. This is a flat 10% tax on property passing to certain beneficiaries, based on relationship, not estate size. Close relatives are fully exempt: a spouse, children and other lineal descendants (and their spouses), parents, grandparents, and siblings pay no inheritance tax. So most people inheriting a family home owe nothing. The 10% applies to more distant heirs - nieces, nephews, cousins, friends, unmarried partners. If you are in the exempt group, the size of the inheritance does not matter; you owe no inheritance tax.

The stepped-up basis applies for everyone. When you inherit, the house’s cost basis for capital gains resets to its fair market value on the date of death. Sell soon after near that value and there is little or no capital gains tax on decades of appreciation. This is federal law and separate from Maryland’s estate and inheritance taxes.

Can you sell during probate in Maryland?

Yes, in most cases.

• Personal representative with authority (the common case). Once appointed, and where the will or the Estates and Trusts Article grants the power, the representative can list and sell the house on the open market as part of administration. To buyers and title companies it looks close to a normal sale.
• Orphans’ Court approval. In some situations the sale of real estate needs approval from the Orphans’ Court, particularly where the will does not grant a power of sale. A Maryland probate attorney will know which applies.
• Sold outside probate. If the house passed by survivorship or a trust, the new owners of record sell like any other sellers.

Because inheritance tax (where owed) is collected through the Register of Wills, title companies will want to see it addressed. Proceeds during administration flow into the estate first and are distributed once debts and taxes are settled.

If you live out of state

A large share of inherited Maryland homes belong to heirs elsewhere. It works fine:

• Maryland allows out-of-state personal representatives (a nonresident may need to appoint a resident agent), and probate can usually be handled through a Maryland attorney with minimal or no travel.
• The physical side - securing the property, insurance on a vacant house, winter freeze risk, clearing out belongings, and repairs - needs boots on the ground.
• A local agent experienced with inherited and probate sales becomes your proxy: checking on the house, lining up cleanout and contractors, advising on as-is versus fix-first, and running the sale while you manage things from home.

You do not need to relocate to Maryland for months. You need one trustworthy local professional and a real number on the house.

What’s the house worth?

Every path - keep, rent, or sell - starts with an accurate value. Online estimates are least reliable exactly where inherited houses live: original-condition properties in neighborhoods full of remodeled comps, and older rowhouses the algorithm struggles with.

You will want the fair market value at the date of death (that sets your stepped-up basis and feeds any estate or inheritance tax filing, so document it) and today’s as-is value versus its fixed-up value. The spread between those last two tells you whether repairs are worth it. A local agent can pull all of this for free.

Frequently asked questions

How long does probate take in Maryland? A regular estate commonly runs nine months to over a year, with the six-month creditor period and inheritance tax accounting setting a practical floor. Trust assets and survivorship property skip the process.

Do I pay taxes on a house I inherit in Maryland? Maybe, depending on who you are. Maryland has an estate tax (over $5 million) that most estates never trigger, plus a 10% inheritance tax that exempts close relatives - spouses, children and descendants, parents, grandparents, and siblings. More distant heirs pay 10%. The federal stepped-up basis limits capital gains for everyone.

Does Maryland allow a transfer on death deed? No. Maryland does not authorize beneficiary or TOD deeds for real estate, so a solely owned house without survivorship or a trust goes through probate.

What happens to the mortgage? It stays attached to the house. Inheriting relatives can generally keep paying it - federal rules block the lender from calling the loan due in most family transfers - or it is paid off from the sale proceeds at closing.

What if my siblings and I disagree about selling? The personal representative controls the sale during administration where authorized, subject to fiduciary duties. Once heirs own the house jointly, any co-owner can ultimately force a sale through a partition action, though a negotiated buyout or agreed sale is almost always cheaper.