It’s hard to believe we’re already well into 2026. If you’re like most of our neighbors here in Maryland, life hasn’t slowed down one bit. You’re busy with the grandkids, maybe planning a trip down to the shore, or finally getting around to those home renovations you’ve been talking about for years.
But there’s one thing that often sits on the back burner, gathering dust in a drawer or a digital folder: your estate plan.
We see it all the time. People think, “I did my will back in 2018, I’m good.” Or, “My trust was set up years ago; it’s fine.” The truth is, Maryland’s legal and tax landscape has shifted quite a bit. What worked perfectly eight or ten years ago might actually be a "tax trap" for your family today.
At Don Shaw Law, PLLC, we want to make sure the legacy you’ve worked so hard to build doesn’t get eaten up by avoidable taxes or stuck in a long, expensive probate process. Here are five big reasons why your outdated Wills and Trusts in Maryland might need a 2026 tune-up.
1. The Massive "Exemption Gap" Between Federal and State Law
In 2026, the federal estate tax exemption has climbed to a staggering $15 million. For many families, that sounds like a number they’ll never have to worry about. If your total assets are under that mark, you might think you’re completely off the hook for estate taxes.
However, Maryland plays by a different set of rules.
Here in the Old Line State, the Maryland estate tax exemption sits at $5 million. While that’s still a significant amount, it creates a massive "gap." If your estate is worth $8 million, for example, you won't owe a dime to the IRS federally, but you could be looking at a substantial tax bill from the state of Maryland.
If your estate plan was written when the exemptions were much lower: or when federal and state laws were more closely aligned: your plan might be using outdated formulas. We’ve seen old trusts that automatically trigger certain "tax-saving" measures that are no longer necessary or, worse, actually increase the administrative headache for your spouse. We need to make sure your plan is optimized for the current 2026 figures so your family keeps more of what you left behind.
2. The "Sneaky" Maryland Inheritance Tax
Most people use "Estate Tax" and "Inheritance Tax" interchangeably, but they are actually two different animals. Maryland is one of the few states that still has both.
While direct heirs: like your spouse, children, or grandchildren: are generally exempt from the Maryland Inheritance Tax, things get tricky when you want to leave something to what we call "collateral heirs." This includes siblings, nieces, nephews, or even your best friend.
In 2026, the tax rate for these heirs is typically 10%. That means if you leave $100,000 to your favorite nephew to help him start a business, the state might take $10,000 right off the top before he ever sees a penny.
If your plan hasn't been updated to account for who is receiving what, you might be unintentionally setting your loved ones up for a surprise bill. When we review plans, we look at how to structure gifts to minimize this impact, ensuring your generosity goes to your family, not the tax collector.
3. The "Box with No Lid" (Your Revocable Living Trust)
One of the most powerful tools we use is the Revocable Living Trust (RLT). We like to describe an RLT as a “box with no lid.”
Think of it this way: You build this box, and you put your house, your bank accounts, and your investments inside it. Because the box has no lid, you can reach in and take things out, put new things in, or move things around whenever you want. You still have total control.
The magic happens when you pass away. Because those assets are inside the box, they don't have to go through the public, often grueling process of probate. Your successor trustee just picks up the box and follows your instructions.
However, an outdated trust is often an empty box. We frequently meet families who set up a trust years ago but never "funded" it. If you bought a new home in Annapolis or opened a new brokerage account in the last five years and didn't title them in the name of the trust, that asset is sitting outside the box. When you’re gone, that lone asset could force your entire family into probate court anyway.
4. Why Your "Box" Needs a Pour-Over Will
Even with the best intentions, it’s easy to forget to put something in the box. Maybe it’s a car you bought last minute, or a refund check that arrives after you've passed. This is why we always recommend pairing your trust with a pour-over will.
Think of the pour-over will as a safety net. Its job is simple: if you pass away and there’s an asset that isn’t inside the box, the pour-over will "catches" it and pours it into the box so it can be distributed according to your trust’s instructions.
Without this specific type of will, those "forgotten" assets follow the standard laws of Maryland, which might not be what you wanted at all. If you have a trust but haven't updated your will recently, you might be missing this critical connection that ensures no assets are left unprotected.
5. Life in 2026: Digital Assets and Family Changes
Let’s be honest: the world looks different than it did even five years ago. Does your current estate plan address your digital life? We’re talking about cryptocurrency, digital photo libraries, social media accounts, and even online business interests.
In 2026, these are real assets with real value (sentimental and financial). If your will or trust doesn't give your executors or trustees the specific legal authority to access these digital "keys," your family might be locked out of your memories and your money forever.
Beyond the tech, think about your family.
- Have there been any births or deaths?
- Has a child reached an age where they are more (or less) responsible with money?
- Do you have a family member who might now need a guardianship?
An outdated plan is a static snapshot of a life you no longer live. By updating your documents, we can ensure they reflect your family’s current reality and your current wishes.
Is Your Plan Ready for the Rest of 2026?
Estate planning isn't just about what happens when you're gone; it's about the peace of mind you have right now, knowing your family is protected from unnecessary taxes and legal hurdles.
If you haven't looked at your documents in a few years, or if you’re realizing your "box" might be empty, we’re here to help. Whether you’re in Maryland, Virginia, DC, or West Virginia, we can help you navigate these 2026 rules with a plan that actually works for you.
Don’t wait for a "tax trap" to catch your family off guard. Schedule a consultation with us today, or feel free to fill out our Estate Planning Questionnaire to get the conversation started. We look forward to helping you protect what matters most.