What ancillary probate is
Real estate passes under the law of the state where it is located. A Maryland probate can settle a Maryland resident's Maryland property, but land in another state requires a separate proceeding there, called ancillary probate. It typically involves a local attorney, that state's court and filing fees, and its own timeline, and the estate is not fully settled until every proceeding closes. Maryland probate alone typically runs nine to twelve months.
When it is triggered, and when it is not
Ancillary probate is triggered by real estate, and sometimes by tangible property such as a boat or vehicle, held in a person's sole name in another state at death. Property in Ocean City or at Deep Creek Lake is in Maryland and triggers no second proceeding. Property in the Delaware beach towns, the Outer Banks, Pennsylvania, or Florida does.
How Maryland's estate tax treats out-of-state property
For a Maryland resident, real and tangible personal property located in another state counts toward the gross estate when Maryland applies its $5 million exclusion, a figure fixed by statute rather than indexed for inflation. If tax is due, it is apportioned: Maryland reduces the tax in proportion to the value of the property located outside the state. An out-of-state property can therefore push an estate over the threshold even though only part of the resulting tax is owed to Maryland.
How Maryland's inheritance tax treats it
Maryland's 10% inheritance tax applies only to property with a taxable situs in Maryland, and the situs of real property is the state where it is located. Land in another state is outside Maryland's inheritance tax. For Maryland property, the exempt circle is unchanged: spouses, registered domestic partners, children and stepchildren and their descendants, grandchildren, parents, grandparents, siblings, and sons- and daughters-in-law.
Neighboring states at a glance
| State | What to know |
|---|---|
| Delaware | Estate tax repealed for deaths after December 31, 2017. Ancillary probate still applies to Delaware real estate. |
| Pennsylvania | Inheritance tax applies to Pennsylvania real estate owned by nonresidents: 0% for a spouse, 4.5% for lineal heirs, 12% for siblings, 15% for most others. Real estate held in a revocable trust remains taxable. |
| Florida | No estate tax for deaths on or after January 1, 2005. Someone who lives outside Florida may serve as personal representative only if closely related to the person who died. |
How families avoid a second probate
A revocable living trust that holds title to the out-of-state property avoids ancillary probate in every state, because the successor trustee acts under the trust rather than under a court appointment. The deed into the trust must comply with the law of the state where the property is located, and the property's contents should be assigned to the trust as well, or they can still require a proceeding. Joint ownership with a right of survivorship avoids ancillary probate only at the first death. A transfer-on-death deed works only where the property's state allows one, and Maryland's applies to Maryland land. For rental property, ownership through an LLC can convert real estate into an ownership interest that passes under the owner's plan, though states differ on how they treat that interest for tax purposes. We wrote more about how this plays out for a real family in our article on owning a home in another state.