Good news for Maryland residents: by 2019, the Maryland state estate tax exemption will be the same amount as for federal residents. Currently, federal residents can protect $5,340,000 from estate tax ($10,680,000 for a married couple), and that amount is indexed for inflation. Prior Maryland law did not follow the federal exemption, but rather retained a $1 million exemption. The new Maryland law, signed by the Governor last week, sets the Maryland exemption as follows:

2014                                        $1,000,000
2015                                        $1,500,000
2016                                        $2,000,000
2017                                        $3,000,000
2018                                        $4,000,000
2019 and thereafter         match federal exemption

Virginia residents do not pay estate tax. Washington, D.C. residents still have a $1 million exemption and a 16% estate tax rate.