Maryland law divides probate estates into two types – small estates and regular estates. You must first determine which one fits your situation to know which steps to take next in the probate process. The value of the estate determines which type of estate and how to proceed. Calculating the value of the estate can be complicated.
Add up the Property
The first step in calculating the value of a probate estate is to list the value of all the decedent’s property. This list will only include probate property. Anything that qualifies as non-probate property such as payable-on-death accounts and life insurance benefits paid to a named beneficiary will not go on this list.
Personal property is tangible items like jewelry, furniture, cars, boats and collectibles. The fair market value, or the amount someone will actually spend to purchase the item, at the date of death is the value attributed to that item. For vehicles, the Kelly Blue Book value is typically used.
Real property values can be found on the SDAT website; however, not all real property will be probate property. It depends on the way the deed is titled. If the property is owned jointly with right of survivorship, then the decedent’s interest in that property passes to the other joint tenant outside of probate. The value of this type of real estate is not included in the calculations to determine whether the estate qualifies as a small estate under Maryland law.
To make this even more complicated, if the real property was held jointly but the deed states it was held as ‘Tenants in Common’ then the value of the decedent’s interest in that real property is considered probate property and should be considered in the calculation. Also, make sure the deed states the real property is owned in fee simple, not a life estate. Fee simple ownership is probate while a life estate interest is not.
Subtract Out the Liabilities
Next make a list of all of the decedent’s liabilities (secured debts only). Subtract the balance of the outstanding mortgage(s) from any real estate that qualifies as probate property. Subtract out the outstanding car loans from the value attributed to the vehicles. Check to see if there are any other property liens that need to be deducted from the value as well.
Apply the Law
Once you have a net value, taken from subtracting the liabilities from the qualifying probate assets, then you apply Maryland law to determine whether the estate qualifies as small or regular.
- If the net value is more than $50,000, the estate is a “regular estate”.
- If the net value is $50,000 or less, the estate is a “small estate”.
- If the only heir is a spouse, the small estate status extends up to $100,000.
For assistance in calculating the value of an estate, contact the experienced probate attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
