Estate Planning Is Tax Planning: Why a Tax LL.M. Matters for Maryland Families

Most people think of an estate plan as a set of documents: a will, a trust, powers of attorney, a health care directive. Every one of those documents also makes tax decisions, whether anyone notices or not. Together they decide who pays income tax on a retirement account and whether the children owe capital gains tax when they sell the house. They even decide whether a niece you love owes Maryland ten cents of every dollar you leave her.

That is why we treat the tax side of a plan as seriously as the paperwork, and why our principal attorney, Jason C. Johnson, holds a Master of Laws in Taxation from Villanova University School of Law in addition to his J.D., with honors, from the University of Maryland School of Law. This article explains what that degree is and why it matters in Maryland in particular. It also shows what it changes in the plans we draft for families in Annapolis and across Anne Arundel County.

An LL.M. in Taxation is a graduate law degree devoted entirely to tax law. It builds on the Juris Doctor and is earned on top of a law degree, not instead of one. A law degree may include a course or two on tax, while an LL.M. in Taxation is a separate course of graduate study in nothing else.

Villanova’s program today, at what is now the Charles Widger School of Law, requires 24 credits of graduate tax coursework. Its required core covers federal income taxation, the taxation of corporations and shareholders, partnership taxation, and tax practice and procedure, and it offers a certificate in estate planning. Those are the same subjects that sit underneath a family business, a trust, and a retirement account.

It is an academic degree, not a certification, and it does not replace judgment or the work of listening to what a family wants. What it adds to a plan is training in reading a document’s tax consequences alongside its legal effect. It also means your CPA and financial advisor can work through those consequences with us in their own terms.

Maryland is the only state that charges both an estate tax and an inheritance tax. The Maryland estate tax applies to estates above $5 million, a threshold that is not indexed to inflation, at rates up to 16%. The federal exemption is far higher, at $15 million per person in 2026. The Maryland inheritance tax has almost no threshold. Apart from gifts of $1,000 or less, it takes 10% of what passes to anyone outside a list of close relatives.

Most families in Anne Arundel County will never owe estate tax, and that is good news, but it does not make their plans tax-free. The taxes that reach ordinary Maryland families are usually quieter ones, and they are decided by how the documents are drafted rather than by how large the estate is. Our guide to Maryland estate and inheritance tax covers the rates and exemptions in detail. The rest of this article is about the decisions.

Capital gains on the family home. Property that passes at death generally receives a new tax basis equal to its value on the date of death, which can erase decades of appreciation for income tax purposes. Property given away during life generally carries the original owner’s basis with it. A house bought in Arnold for $150,000 in the 1990s and worth $650,000 today can leave the children with very different tax bills depending on how it reaches them. Adding a child to the deed the wrong way, giving the house away early, and some trust designs can each give up that reset if they are not drafted with it in mind.

Income tax on inherited retirement accounts. A 401(k), an IRA, or a Thrift Savings Plan from a federal career is often the largest asset after the house. Every pre-tax dollar in it is taxed as income when it comes out. A Thrift Savings Plan pays a beneficiary other than a spouse in a single sum unless the money moves to an inherited IRA. Under the SECURE Act, most children and other beneficiaries who are not a spouse must empty an inherited account within ten years. IRS regulations enforced beginning in 2025 also require yearly withdrawals during that period when the owner died after required distributions were due to begin. Naming a trust as the beneficiary can protect a child or speed up the tax, depending on how the trust is written.

Income tax inside a trust. A trust that keeps its income pays federal income tax on a compressed schedule. In 2026 a trust reaches the top 37% bracket on taxable income above $16,000, while a single person does not reach it until $640,600. Whether a trust holds income or passes it out to beneficiaries in lower brackets is a drafting decision made in the trust document, years before anyone files a trust return.

Maryland’s inheritance tax. Spouses, children, stepchildren, grandchildren, parents, grandparents, siblings, and a child’s spouse are exempt, as are qualifying domestic partners. A niece, a nephew, a cousin, a close friend, or a partner who does not qualify under Maryland law pays 10% of what they receive. Leaving $400,000 to a niece you helped raise costs her $40,000 unless the plan accounts for it.

The estate tax, for larger estates. Couples whose combined estate could approach Maryland’s $5 million threshold can generally carry the first spouse’s unused exemption over to the survivor under both federal and Maryland law. It is not automatic. It takes an estate tax return after the first death, even when no tax is due, and that return has a deadline.

The tax questions show up in specific clauses that most clients never read closely. A few examples from the kinds of plans we prepare:

A Medicaid asset protection trust that keeps the step-up. An irrevocable trust can protect a home from long-term care costs once the five-year look-back has passed. It can also be drafted so the house is counted in the parent’s estate for estate tax purposes. That inclusion is what preserves the new basis at death. With a $15 million federal exemption and a $5 million Maryland exemption, that costs most families nothing in estate tax. Drafted without that feature, the same trust can leave the children with the parent’s old basis and a capital gains bill when they sell. We explain how these trusts work in our article on keeping the house and qualifying for Medicaid.

A retirement account and a trust that work together. When a trust is named as beneficiary, its terms decide how quickly the account must be paid out and who pays the tax. We draft the trust and the beneficiary designation together, so the protection a parent wants for a child is less likely to arrive with a tax bill the parent never intended.

A family business that keeps its tax status. Only certain kinds of trusts can own shares of an S corporation. If S-corporation stock passes to a trust that does not meet those requirements, the company can lose its S status, with consequences for every owner. A succession plan for a closely held Maryland business has to account for that before the stock moves.

A married couple that keeps both exemptions. For couples near Maryland’s threshold, the plan for the first death includes the estate tax return that carries the unused exemption to the survivor. That way the survivor’s estate can use both exemptions.

Consider a retired couple in Severna Park. They have a house they bought decades ago, a Thrift Savings Plan from a federal career, an IRA, a share of a family cottage on the Eastern Shore, and a niece they helped raise. None of that comes close to the federal estate tax. Every piece of it still carries a tax decision, from whether the house reaches their children with a new basis to how quickly the retirement accounts are taxed once they are gone. The cottage needs an owner and a form of ownership, and the niece’s share faces Maryland’s 10% inheritance tax unless the plan accounts for it. A plan that gets the documents right and the tax wrong can cost that family more than the plan itself did.

We work with families in Anne Arundel, Prince George’s, Queen Anne’s, Calvert, St. Mary’s, and Kent Counties, and elsewhere in Maryland, from our office on Old Solomons Island Road in Annapolis. Meetings can be in person or by video.

What is an LL.M. in Taxation? An LL.M. in Taxation is a graduate law degree in tax law, earned on top of the Juris Doctor. Jason C. Johnson earned his at Villanova University School of Law, whose LL.M. in Taxation requires 24 credits of graduate tax coursework.

Is an LL.M. in Taxation a certification? No. It is an academic degree. It shows graduate study in tax law, and it is not a state certification of specialization.

Why does tax matter in estate planning if my estate is under $5 million? Most Maryland families never owe estate tax. Their plans still decide capital gains on inherited property, income tax on inherited retirement accounts, the tax rate on income kept inside a trust, and whether Maryland’s 10% inheritance tax applies to a beneficiary.

Is Maryland the only state with both an estate tax and an inheritance tax? Yes. Maryland charges an estate tax on estates above $5 million and a separate 10% inheritance tax on property passing to beneficiaries outside the exempt group of close relatives.

Where is Johnson Law, and who does it serve? Johnson Law LLC is at 147 Old Solomons Island Road, Suite 301, in Annapolis, Maryland. The firm serves Anne Arundel, Prince George’s, Queen Anne’s, Calvert, St. Mary’s, and Kent Counties, and clients elsewhere in Maryland by video.

If your plan was written before the SECURE Act or before the federal exemption changed for 2026, it is worth a fifteen-minute introductory call. The same is true if no one has ever asked what each document does to your family’s taxes. We will tell you plainly what we see, and the flat fee is agreed before any work begins.

Call 410-570-1671 or schedule your introductory call.

Johnson Law LLC is an estate planning and elder law firm based in Annapolis, Maryland. This article is general information about Maryland and federal tax law as of 2026 and is not legal or tax advice for your situation. Tax figures change, often every year. An LL.M. in Taxation is an academic degree, not a certification of specialization. Reading this article does not create an attorney-client relationship.