There are two new laws in Maryland impacting estate planning and administration. The first deals with what is known as the “spousal election”. Under Maryland law, a surviving spouse has the right to make an election to take a one-third share of their deceased spouse’s estate in lieu of what they were to receive under the testamentary will. Although the spousal election has been in place for generations, its implementation was problematic since it was limited to a share of the “probate” assets of the deceased spouse. Essentially, probate assets are those that are titled solely in the name of the deceased spouse and which do not automatically pass by operation of law to a named beneficiary.
With the increased use of revocable trusts, joint accounts, POD/TOD (payable on death-transfer on death) accounts and other assets with named beneficiaries that pass outside of the testamentary will (non-probate assets), a decedent could have a very substantial gross estate with a very small probate estate. The elective share used to be limited to the probate estate. Under the new law, the pool of assets available for the elective share is expanded to include virtually all probate and non-probate assets that were owned or controlled by the deceased spouse thereby providing additional protection to the surviving spouse from being disinherited by shifting probate assets to non-probate status.
The second new law affects the share of an estate to be received by the surviving spouse where the deceased spouse died intestate (without a will) but with one or more surviving parents but no surviving children. If there are no surviving children but there is a surviving parent, and the couple was married for less than ten (10) years, the surviving spouse receives the first $40,000 plus one-half of the residue. If there are no surviving children but there is a surviving parent, and the couple was married for more than ten (10) years, the surviving spouse receives the entire estate.
Both statutes go into effect as of October 1, 2019. For more information regarding this, please contact Ron Lyons at email@example.com