Q: who pays inheritance tax/

A: Only the decedent's spouse, parent, grandparent, child, or descendant of the decedent's child (or their surviving spouse) qualify for the exemption from Maryland's state inheritance tax of 10% ("lineal" relatives). First cousin is not "lineal" does not meet the exemption. However, certain assets are not subject to the state inheritance tax, such as receipt of an annuity or other payment under a public or private employees' pension or benefit plan if the annuity or other payment is not taxable for federal estate tax purposes, or life insurance proceeds that pass directly to the beneficiary and not through the estate first. Also, there is no state inheritance tax for any distribution to a legatee that does not exceed $1,000, and there is no inheritance tax imposed on assets passing through a "Small Estate"--that is, any estate valued under $50,000 in assets. Unless the estate assets exceed $5.6 Million, then there is no federal estate tax.

A: As another attorney noted, except for things like life insurance or small amounts of $1,000 or less, a 10% inheritance tax is due in this state for anything inherited from a cousin (or most anyone else outside of immediate family). As to who actually pays this, depending on how the Will is written the Estate may pay the tax on your behalf. The lawyer handling the estate should be able to tell you whether or not the estate will pay the tax on your behalf.