Md. Code Ann., Est. & Trusts § 3-303

Redline — January 1, 2020 → current.View current text →

Current — January 1, 2021

As of January 1, 2020

(a) Property distributed pursuant to § 3–302 of this subtitle shall be paid by the personal representative from the legacies of children of the testator and issue of deceased children who take by representation.

(b) (1) Each person shall contribute in the proportion which the person’s legacy bears to all legacies of children of the testator and issue of deceased children taking by representation.

(2) Instead of contributing an interest in specific property to the pretermitted child, a legatee may pay the pretermitted child or the child’s issue, in cash or other property acceptable to the pretermitted child or the child’s issue, an amount equal to the fair market value of the interest in specific property as of the date of death of the testator.

§3–401. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) In this subtitle the following words have the meanings indicated.

(b) “Augmented estate” means an estate as calculated under § 3–404 of this subtitle.

(1) Except with respect to a proceeding under § 12–502 of the Courts Article or as otherwise provided under the Maryland Rules, the orphans’ court, or the court exercising the jurisdiction of the orphans’ court, for the county in which the election under § 3–403 of this subtitle is filed; or

(2) With respect to the enforcement of payment of an elective share or any portion thereof under § 3–410 of this subtitle, the court having jurisdiction over the property from which the payment is to be made.

(d) “Estate subject to election” means the portion of an augmented estate that is subject to election as calculated under § 3–404 of this subtitle.

(e) “Marital trust” means any trust created for the exclusive lifetime benefit of the spouse of a decedent or of the settlor of the trust if:

(1) The spouse is entitled to all income from the property held by the trust, payable annually or at more frequent intervals, or has a usufruct interest for life in the property; and

(2) The spouse has the power to compel the trustees of the trust to convert unproductive assets into income–producing assets.

(f) “Person responsible for filing the estate tax return” means the person responsible for filing a Maryland estate tax return for a decedent under § 7–305 of the Tax – General Article, regardless of whether a Maryland estate tax return actually is required to be filed for the decedent.

(g) “Probate estate” means all property passing by testate succession.

(h) “Qualifying joint interest” means an interest in property held as a joint tenant with right of survivorship or equivalent, or a tenancy–by–the–entireties equal to:

(1) In the case of a joint tenancy with right of survivorship or equivalent, the greater of:

(i) The tenant’s fractional interest in the property; or

(ii) The percentage of the property’s value, exclusive of income or appreciation, contributed by the tenant; or

(2) In the case of a tenancy–by–the–entireties, one–half of the value of the property.

(i) (1) “Qualifying lifetime transfer” means:

(i) An irrevocable transfer made during the lifetime of the transferor in which the transferor retained for a period actually terminating at or after the transferor’s death:

1. Possession of the property;

2. The right to receive the income from the property;

3. The use or enjoyment of the property;

4. A qualifying joint interest;

5. A qualifying power of disposition; or

6. The right to receive an annuity or other periodic payment from the property, including, without limitation, a periodic payment based on the value of the property;

(ii) An irrevocable transfer made during the lifetime of the transferor in which the transferor retained an interest described in item (i) of this paragraph that actually terminated before the transferor’s death, and the remaining value of the property transferred then passed to a recipient other than the transferor or the transferor’s spouse; or

(iii) Any other irrevocable transfer made during the lifetime of the transferor, other than a transfer to the transferor’s spouse.

(2) “Qualifying lifetime transfer” does not include a transfer made in accordance with a bona fide sale for adequate consideration in money or money’s worth.

(j) “Qualifying power of disposition” means a power, whether or not the holder has the capacity to exercise that power, by which the holder, during the life of the holder or on the holder’s death, may:

(1) Appoint the property subject to the power to the holder, the holder’s estate, the holder’s creditors, or the creditors of the holder’s estate, unless the power of appointment is not created, directly or indirectly, by the holder and is limited by an ascertainable standard relating to the holder’s health, education, support, or maintenance;

(2) Designate the recipient or recipients of the property on the holder’s death, including in accordance with a beneficiary designation, a payable on death designation, or a transfer on death designation; or

(3) Determine, alter, or amend the possession or enjoyment of, or the right to income from, the property subject to the power if the power was created, directly or indirectly, by the holder.

(k) “Revocable” has the meaning stated in § 14.5–103 of this article.

(l) “Revocable trust of the decedent” means any trust of which a decedent was the settlor that was revocable by the decedent before the decedent’s death or incapacity.

(m) “Settlor” has the meaning stated in § 14.5–103 of this article.

(n) “Spousal benefits” means the aggregate value of property passing to or in trust for the benefit of the surviving spouse by reason of a decedent’s death and property held for the benefit of the surviving spouse in any trust created during a decedent’s lifetime of which the decedent was a settlor, reduced by:

(1) With respect to property that the decedent owned jointly with the surviving spouse, that portion of the value of the property that is not included in the estate subject to election;

(2) The value of assets passing by reason of the decedent’s death to any trust of which the surviving spouse is not the sole beneficiary during the surviving spouse’s lifetime;

(3) The value of assets held in any trust created during the decedent’s lifetime of which:

(i) The decedent was a settlor; and

(ii) The surviving spouse is not the sole beneficiary during the surviving spouse’s lifetime;

(4) One–quarter of the aggregate value of assets passing by reason of the decedent’s death to, or held at the time of the decedent’s death in, any marital trust;

(5) One–third of the aggregate value of assets passing by reason of the decedent’s death to, or held at the time of the decedent’s death in, any trust, whether testamentary or created during the decedent’s lifetime:

(i) Excluding a trust described under item (4) of this subsection;

(ii) Of which the decedent was a settlor, if the trust was created during the decedent’s lifetime;

(iii) That is held for the exclusive lifetime benefit of the surviving spouse; and

(iv) From which the trustees may make distributions to or for the benefit of the surviving spouse in accordance with a standard not more restrictive than that under § 14–402(b)(3) of this article; and

(6) The entire value of any trust for the exclusive lifetime benefit of the surviving spouse that is not a marital trust and is not described under item (5) of this subsection.

(o) “Value” means:

(1) For an asset included in the gross estate of a decedent under § 7–301(b) of the Tax – General Article, the value of the asset under Title 7, Subtitle 3 of the Tax – General Article, if a Maryland estate tax return is required to be filed with respect to the decedent; and

(2) For any other asset, the value of the asset under § 7–202 of this article, regardless of whether the asset is required to be reported on an inventory.

§3–402. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

The purposes of this subtitle are:

(1) To ensure that a surviving spouse is reasonably provided for during the surviving spouse’s remaining lifetime; and

(2) Subject to item (1) of this section, to provide a testator flexibility in ordering the testator’s affairs.

§3–403. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

The surviving spouse may elect to take an elective share of an estate subject to election as follows:

(1) If there is surviving issue, the elective share shall equal one–third of the value of the estate subject to election, reduced by the value of all spousal benefits; or

(2) If there is no surviving issue, the elective share shall equal one–half of the value of the estate subject to election, reduced by the value of all spousal benefits.

§3–404. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) (1) Subject to paragraph (2) of this subsection, the value of the decedent’s augmented estate shall be calculated by totaling the value of:

(i) The probate estate of the decedent;

(ii) All revocable trusts of the decedent;

(iii) All property with respect to which the decedent, immediately before death, held a qualifying power of disposition;

(iv) All qualifying joint interests of the decedent; and

(v) All qualifying lifetime transfers of the decedent.

(2) If a property interest is included in the augmented estate under more than one item of paragraph (1) of this subsection, only the item resulting in the largest augmented estate shall apply.

(b) The estate subject to election shall be calculated by reducing the value of the decedent’s augmented estate by:

(1) Funeral and administration expenses payable from the augmented estate;

(2) Family allowances payable from the augmented estate;

(3) Enforceable claims and debts against any part of the augmented estate;

(4) The value of any assets included in the augmented estate that, at the time of the decedent’s death, were held in a trust of which the decedent is not a settlor, if:

(i) The assets were not previously owned by the decedent; or

(ii) The assets were previously owned by the decedent but were sold by the decedent in accordance with a bona fide sale for adequate consideration in money or money’s worth;

(5) The value of any assets included in the augmented estate under subsection (a)(1)(iii) of this section that, at the time of the decedent’s death, were held:

(i) In a trust established under § 1917(c)(2)(B)(iii), (c)(2)(B)(iv), (d)(4)(A), or (d)(4)(C) of the Social Security Act;

(ii) In an account established under § 529A of the Internal Revenue Code; or

(iii) In a special needs trust for the benefit of an individual who is disabled as defined in § 1614(a)(3) of the Social Security Act;

(6) The value of any property included in the augmented estate under subsection (a)(1)(iii), (iv), or (v) of this section, the disposition of which the surviving spouse of the decedent consented to in writing during the decedent’s lifetime other than by means of spousal consent to split–gift treatment under the federal gift tax laws;

(7) The value of any qualifying lifetime transfer of the decedent described in § 3–401(i)(1)(ii) of this subtitle where:

(i) The initial transfer took place before the decedent’s marriage to the surviving spouse of the decedent; or

(ii) The decedent’s interest in the property transferred terminated more than 2 years before the decedent’s death;

(8) The value of any qualifying lifetime transfer of the decedent described in § 3–401(i)(1)(iii) of this subtitle that occurred before the later of:

(i) The decedent’s marriage to the surviving spouse of the decedent; or

(ii) 2 years before the decedent’s death;

(9) The value of any interest in real property included in the augmented estate by reason of the decedent’s retention of a life estate in the real property if:

(i) At the time of the decedent’s death, the decedent held no qualifying power of disposition over the real property; and

(ii) The decedent’s life estate in the property was created more than 2 years before the decedent’s death; and

(10) The value of the proceeds of an insurance policy on the decedent’s life in excess of the net cash surrender value of the policy immediately before the decedent’s death or, in the case of term insurance, in excess of the total premiums paid, if:

(i) The proceeds are included in the augmented estate;

(ii) The proceeds are payable to a charity or to or for the exclusive lifetime benefit of an ancestor, a descendant, a step–descendant, or a sibling of the decedent; and

(iii) 1. The policy was purchased before the decedent’s marriage to the surviving spouse of the decedent;

2. The policy was purchased more than 5 years before the decedent’s death; or

3. The surviving spouse of the decedent consented in writing during the decedent’s lifetime to the disposition of the proceeds as described in item (ii) of this item.

(c) (1) The value of a qualifying lifetime transfer described under § 3–401(i)(1)(i) of this subtitle shall be determined as if the property still was owned by the transferor.

(2) The value of a qualifying lifetime transfer described under § 3–401(i)(1)(ii) of this subtitle shall be determined as of the date of the termination of the transferor’s interest in the transferred property.

(3) The value of a qualifying lifetime transfer described under § 3–401(i)(1)(iii) of this subtitle shall be determined as of the date of the transfer.

§3–405. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) The right of election of a surviving spouse:

(1) Is personal to the surviving spouse;

(2) Is not transferable; and

(3) Cannot be exercised after the surviving spouse’s death.

(b) Subject to subsection (c) of this section, if the surviving spouse is a minor or incapacitated within the meaning of § 17–101(c) of this article, the election may be exercised by:

(1) An order of the court having jurisdiction of the person or property of the minor or incapacitated person;

(2) A guardian of the property of the surviving spouse who has been specifically authorized to make the election by order of the court having supervision of the guardianship; or

(3) An agent designated by the surviving spouse under a power of attorney that specifically authorizes the agent to make the election.

(c) (1) Before a guardian of the property of the surviving spouse or an agent designated by the surviving spouse under a power of attorney may exercise a right of election under subsection (b) of this section, the guardian of the property or the agent shall deliver notice of the election to:

(i) All interested persons in the decedent’s estate; and

(ii) All persons who would inherit from the surviving spouse under Subtitle 1 of this title if the surviving spouse died intestate and unmarried at the time the election is made.

(2) An exercise of a right of election under subsection (b) of this section is valid unless:

(i) Within 30 days following the delivery of notice of the election in accordance with paragraph (1) of this subsection, a person makes an objection to the election in the court in which the election was filed; and

(ii) Following a hearing on that objection, the court rules that the election is not in the best interests of the surviving spouse.

§3–406. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) The right of election of a surviving spouse may be waived before or after marriage by a written contract, agreement, or waiver signed by the party waiving the right of election.

(b) Unless the waiver provides to the contrary, a waiver of “all rights”, or equivalent language, in the property or estate of a present or prospective spouse or a complete property settlement entered into after or in anticipation of separation or divorce is a waiver of all rights of family allowance and elective share by each spouse in the property of the other and the right to letters under § 5–104 of this article, and is an irrevocable renunciation by each spouse of all benefits that would otherwise pass to the spouse from the other by intestate succession, by elective share, or by virtue of a will or revocable trust of the present or prospective spouse executed before the waiver or property settlement.

§3–407. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) (1) The election by a surviving spouse to take an elective share shall be made within the later of:

(i) 9 months after the date of the decedent’s death; or

(ii) 6 months after the first appointment of a personal representative.

(2) (i) Within the period for making an election, the surviving spouse may file with the court a petition for an extension of time, with a copy given to the personal representative.

(ii) For good cause shown, the court may extend the time for election for a period not to exceed 3 months at a time.

(b) The surviving spouse may withdraw the election at any time before the expiration of the time for making the election to take an elective share.

§3–408. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) (1) An election to take an elective share under this subtitle:

(i) Shall be in writing and signed by the surviving spouse or other person entitled to make the election under § 3–405 of this subtitle; and

(ii) 1. Shall be filed in the court in which the personal representative of the decedent was appointed; or

2. If no personal representative of the decedent has been appointed, shall be filed in the court for the jurisdiction in which the venue would be proper under § 5–103 of this article.

(2) Notice of the filing of an election to take an elective share under paragraph (1) of this subsection may be delivered to:

(i) The trustee of each revocable trust of the decedent; or

(ii) The person responsible for filing the estate tax return, if different from the trustee.

(b) The election may be in the following form: “I, A. B., surviving spouse of C. D., late of the County (City) of..............., elect to take my elective share of the decedent’s estate subject to election under § 3–403 of the Estates and Trusts Article of the Annotated Code of Maryland. ............................. (Signature)”. §3–409. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) On receipt of a written request by the surviving spouse, all information necessary to calculate the elective share under this subtitle shall be delivered to the surviving spouse by, as applicable:

(1) The personal representative of the decedent;

(2) The trustee of any revocable trust of the decedent; or

(3) The person responsible for filing the estate tax return.

(b) (1) The filing of an election to take the elective share under § 3–407 of this subtitle is deemed to give adequate notice of the election to, as applicable:

(i) The personal representative of the decedent;

(ii) The trustee of any revocable trust of the decedent; or

(iii) The person responsible for filing the estate tax return.

(2) The person receiving notice of an election to take the elective share under paragraph (1) of this subsection shall promptly deliver notice of the election to each person from whom any portion of the elective share may be payable.

(c) Within 60 days after the date a trustee of a revocable trust of the decedent acquires knowledge of the decedent’s death, the trustee shall notify the surviving spouse of the existence of the trust, of the identity of the trustees, and of the surviving spouse’s right to request a copy of the trust instrument.

(d) On receipt of a written request by the personal representative of the decedent, the trustee of any revocable trust of the decedent, or the person responsible for filing the estate tax return, the surviving spouse shall deliver to the person making the request all information relevant to the calculation of the elective share under this subtitle that is in the possession of the surviving spouse and not otherwise available to the person making the request.

§3–410. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) This section does not apply if payment of the elective share of a surviving spouse is otherwise provided for in:

(1) (i) The decedent’s will; or

(ii) The instrument governing any trust of which the decedent was the settlor; or

(2) A written agreement between the persons responsible for paying the elective share that is approved by the court.

(b) (1) Subject to paragraph (2) of this subsection, the elective share of a surviving spouse shall be paid:

(i) From the portion of the decedent’s probate estate that is included in the estate subject to election and does not constitute any part of the spousal benefits;

(ii) To the extent the elective share is not fully paid as provided in item (i) of this paragraph:

1. From the portion of any revocable trust of the decedent that is included in the estate subject to election and does not constitute any part of the spousal benefits; and

2. If there is more than one revocable trust of the decedent that is included in the estate subject to election, by apportionment among the trusts in proportion to the value of the assets of each revocable trust that are available to satisfy the elective share; and

(iii) To the extent the elective share is not fully paid as provided in items (i) and (ii) of this paragraph, by the recipients of any other portions of the estate subject to election that do not constitute any part of the spousal benefits, prorated among the recipients in proportion to the value of the assets received by each recipient.

(2) If any payment required by this subsection is preempted by federal law or is to be made from either a trust established under § 1917(c)(2)(B)(iii), (c)(2)(B)(iv), (d)(4)(A), or (d)(4)(C) of the Social Security Act, an account established under § 529A of the Internal Revenue Code, or a special needs trust for the benefit of an individual who is disabled as defined in § 1614(a)(3) of the Social Security Act, the portion of the elective share payable under this subsection shall be apportioned among those recipients whose benefits are not preempted under federal law or who are not beneficiaries of those trusts or accounts.

(c) Unless the surviving spouse and the payor agree otherwise in writing, each person required to pay a portion of the elective share under this section shall make payment:

(1) In a manner that is deemed to be in accordance with the terms and purposes of any instrument governing the disposition of the portion of the estate subject to election from which the portion of the elective share is to be paid; and

(2) (i) In cash;

(ii) With a prorated share of each item of property from which that portion of the elective share can be paid; or

(iii) With other property acceptable to the surviving spouse, in an amount equal to the fair market value of that portion of the elective share to be paid by the payor.

(d) A payor or any other third party, other than the personal representative of the decedent, the trustee of any revocable trust of the decedent, or the person responsible for filing the estate tax return, is not liable for having made a payment or transferred an item of property, or any other benefit from which the elective share might be paid, to a beneficiary designated in a governing instrument or beneficiary designation if the payment or transfer is made:

(1) In good faith reliance on the validity of the governing instrument or beneficiary designation on request and satisfactory proof of the death of the decedent; and

(2) Before the payor or other third party receives written notice of the election by the surviving spouse to receive the elective share under this subtitle.

§3–411. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) On the election of the surviving spouse to take an elective share under this subtitle, all property or other benefits that would have passed to the surviving spouse under the will, other than any portion of the spousal benefits, shall be treated as if the surviving spouse had died before the execution of the will.

(b) The surviving spouse and a person claiming through the surviving spouse may not receive property under the will, other than property forming any portion of the spousal benefits.

§3–412. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

(a) (1) On the final payment of an elective share, the personal representative of the decedent, the trustee of any revocable trust of the decedent, or the person responsible for filing the estate tax return, as appropriate, shall file with the register for the county in which the election under § 3–403 of this subtitle is filed a signed statement, which has been verified by the surviving spouse, stating the value of the elective share and that the elective share has been paid in full.

(2) On the request of the surviving spouse, the personal representative of the decedent, the trustee of any revocable trust of the decedent, or the person responsible for filing the estate tax return, the register shall redact from the statement filed in accordance with paragraph (1) of this subsection the value of the elective share.

(b) (1) On the request of the surviving spouse, the personal representative of the decedent, the trustee of any revocable trust of the decedent, the person responsible for filing the estate tax return, any payor of any portion of the elective share, or any other person having an interest in the assets from which the elective share has been paid, the register shall certify in writing the accuracy of the calculation and payment of the elective share.

(2) If a certification is requested under this subsection, the surviving spouse, the personal representative of the decedent, the trustee of any revocable trust of the decedent, the person responsible for filing the estate tax return, and any payor of any portion of the elective share shall deliver to the register any information and documentation that the register may deem necessary to verify the accurate calculation of the elective share and the payment of the elective share in full.

(3) The register may not disclose any information or documentation submitted to the register in accordance with paragraph (2) of this subsection.

§3–413. NOT IN EFFECT

** TAKES EFFECT OCTOBER 1, 2020 PER CHAPTER 435 OF 2019 **

In an action arising under this subtitle, a court may:

(1) On a showing of clear and convincing evidence, modify:

(i) The calculation of the value of an augmented estate;

(ii) The calculation of the value of an estate subject to election;

(iii) The calculation of the value of spousal benefits; or

(iv) The sources of payment of an elective share;

(2) Consider the circumstances of any transfer or arrangement, including:

(i) The extent of control retained by the decedent;

(ii) The motivation for the transfer or arrangement;

(iii) The familial relationship between the decedent and the beneficiary of the transfer or arrangement;

(iv) The degree, if any, to which the transfer or arrangement deprives the surviving spouse of property that otherwise might form part of the value of the augmented estate, estate subject to election, or spousal benefits;

(v) The degree, if any, to which the transfer or arrangement provides a benefit to the surviving spouse beyond what would be available to the surviving spouse as part of the elective share;

(vi) The length and nature of the relationship between the decedent and the surviving spouse;

(vii) The nature and value of the surviving spouse’s assets; and

(viii) The relationship of the beneficiary of the transfer or arrangement to any previous owner of the property subject to the transfer or arrangement;

(3) Award reasonable attorney’s fees;

(4) Pass orders requiring the holder or recipient of any portion of an augmented estate, an estate subject to election, or spousal benefits to provide any information that the court considers necessary to determine the value or sources of payment of an elective share; and

(5) Transmit issues of fact relating to the value or sources of payment of an elective share to the circuit court of the county in which the election under § 3–403 of this subtitle is filed.

Official source: Maryland General Assembly. Reproduced from public-domain Maryland statutes; confirm against the official source for the current text. Not legal advice.