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The Scope of a Guardian's Authority and Power in Maryland

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The Scope of a Guardian's Authority and Power in Maryland

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06/07/2021 by Frederick R. Franke, Jr.

Unlike other forms of providing for the financial management of the assets of someone with diminished capacity, a guardian's freedom to act is strictly monitored by the Maryland court. Other disability planning techniques, such as trusts or powers of attorney, are created by the person while competent to act and can be designed as largely free from court supervision. Competent individuals are free to determine the scope of the power and authority that they grant to the surrogate decision-maker who will be managing that person's asset if they become unable to act for themselves. The scope of authority in a self-settled trust is governed by the settlor's intent as expressed in the body of the document or by other directives. Similarly, the authority given an agent under a power of attorney is set by its terms. The courts may become involved if the power and authority granted is abused but the nature and extent of the power to act is established by the terms of the document. Guardianships, on the other hand, are creatures of the equity courts and those courts retain an ongoing role in the management of the assets.

The Court of Appeals examined whether the action of a guardian of property to change the beneficiaries on life insurance policies insuring, and owned by, the ward was a fraudulent transfer as to a creditor of the ward. In that case, the Court also examined the core obligation of a guardian of the property and how that obligation defines the scope of a guardian's authority. United Bank v. Buckingham, __ Md. ___ , 2021 WL 865246 (March 9, 2021) (Getty, J). The case was before the Court of Appeals to address questions of law certified by the U.S. District Court. The Buckingham case was an action brought by the creditor bank against the children of the deceased debtor. The bank sought to invalidate transfers of life insurance policies ownership effectuated by the debtor's guardian to trusts for the benefit of the debtor's wife and children.

The first issue is a pure fraudulent transfer question: whether changing a beneficiary designation on life insurance is a "conveyance" under the Uniform Fraudulent Conveyance Act. Md. Commercial Law § 15-201(c) (defining "conveyance"). The Court used an elaborate "plain-meaning" analysis to find that changing a beneficiary designation is, in fact, a conveyance under the Act. The Court buttressed its decision by also examining the legislative intent of the current fraudulent conveyance act and its predecessor enactments as being "'to enhance and not impair the remedies of the creditor." The Buckingham Court quoting Damazo v. Wahby, 269 Md. 252, 256-57 (1973).

The Buckingham family additionally relied of the sweeping immunity of life insurance proceeds benefitting a spouse, children, or dependent relatives from creditors of the policy holder. Md. Insurance §16-111. That provision, however, protects changes of beneficiary designations "except for transfer with actual intent to hinder, delay, or defraud creditors." Md. IN. §16-111(d). The "actual intent" language mirrors that of Md. CL §15-207. of the fraudulent conveyance act ("Every conveyance made...with actual intent ... to hinder, delay, or defraud present or future creditors, is fraudulent as to both present and future creditors."). In this case, the change of beneficiary designations occurred after the creditor was known, it had begun collection activity and the debtor was apparently insolvent. Under these circumstances, applying the standard of CL § 15-207 is not a close call. The literal terms of Md. CL §15-207, however, theoretically could defeat any conveyance intended to shield a person from creditors regardless of how remote that possible creditor. Would the "actual intent" provision, for example, apply to a physician purchasing property as tenants-by-the-entirety when solvent and virtually debt-free "just in case?" Despite the sweeping language, the "actual intent" provision, which is taken from the uniform act, is generally not intended to void such transfers. See Robert T. Danforth, Rethinking the Law of Creditors' Rights in Trusts, 53 Hastings L. J. 287, 330 (2002).

The second issue hinged on the scope of a guardian's power to act which, in turn, depends on the purpose of guardianship. Judge Getty heroically traced the role of a guardian of the property beginning with the English common law and statutes that existed on July 4, 1776 forward. Article 5 (a) of the Declaration of Rights of the Maryland Constitution adopts the English common and statutory laws as of the-Declaration of Independence, so that is the logical starting point. The conclusion reached by the Court is that the purpose of a guardianship of the property remains constant from colonial times to today: The basic duty of the guardian is: "to ensure the estate of the ward is preserved and not diminished." The Court reviews the various legislative changes to "modernize" the guardianship statute, from the Henderson Commission efforts up to the present, and concludes that the fundamental purpose remains the same. "Despite several phases of guardianship reform in Maryland over a period of fifty years, the fundamental common law principle of preservation of the estate has remained unaltered."

. The preservation of the ward's estate, however, itself has a purpose: "The fundamental duty of a guardian of the property is to preserve the property in the guardianship estate for the benefit of the ward and other persons with an interest in the property." Seaboard Sur. Co. v. Boney, 135 Md App. 99, 112 (2000).(Emphasis added.). Yet the ability of the guardian to disburse funds without court authorization is limited. Md. Estates and Trusts §13-214 (" Distribution or disbursement of property without court authorization") permits income or principal to be used for necessities for the disabled individual and his/her legal dependents. Otherwise, court approval is necessary. ET § 13-203 (" Powers exercised by court"). Active court participation of guardianships is a long-established principle: "Lest sight be lost of the fact, we remind all concerned that a court of equity assumes jurisdiction in guardianship matters to protect those who, because of illness or other disability, are unable to care for themselves. In reality the court is the guardian, an individual who is given that title is merely an agent or arm of that tribunal in carrying out its sacred responsibility." Kicherer v. Kicherer, 285 Md. 114 (1979). It is this fundamentally protective purpose of a guardianship estate that limits the power of the guardian, and subjects the guardian to constant judicial oversight, even when acting would presumably be something desired by the ward.

The Maryland estate litigation attorneys at Franke Beckett LLC handle both contested and uncontested guardianships. For over 35 years, our law firm has concentrated on the law of estates and trusts - including a wide variety of fiduciary litigation. We handle guardianship cases (contested or uncontested), disputes over the meaning of estate planning documents, arguments involving personal representatives or trustees, challenges to documents based on a lack of capacity or undue influence. On a regular basis, we try cases before the Orphans' Courts and the Circuit Courts of various Maryland counties. We also take appeals to the Court of Special Appeals and the Maryland Court of Appeals. We are not, however, a general litigation firm. We focus on Will, Trust, and other fiduciary litigation. We have deep experience in and knowledge of the Maryland law of estates and trusts, concentrating as a firm on fiduciary litigation, planning and administration. To schedule a consultation with an experienced Maryland estate litigation attorney, call 410-263-4876 to get in touch with our office.

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The Scope of a Guardian's Authority and Power in Maryland - Franke Beckett LLC

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06/07/2021 by Frederick R. Franke, Jr. Unlike other forms of providing for the financial management of the assets of someone with diminished capacity, a guardian's freedom to act is strictly monitored by the Maryland court. Other disability planning techniques, such as trusts or powers of attorney, are created by the person while competent to act and can be designed as largely free from court supervision.

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06/19/2020 by Frederick R. Franke, Jr.

Appointing a guardian for a disable person requires a court proceeding. Often, when a guardian is needed for a family member, there is general agreement who should become the guardian. To have that person appointed guardian, however, a court proceeding is still required. Often if a family is acting in the best interest of the disabled person the court proceeding may seem "routine." Nevertheless, there are rules that the Judge follows to make sure that a guardianship is necessary and that the disabled individual's rights are protected

In other cases, there may be a hotly contested proceeding over whether a guardian needs to be appointed and who should be that guardian. In a recent, and hotly contested case, the Court of Special Appeals looked at 2 important constraints dictated by the guardianship statute: (1) the requirement that a guardianship will not be established if a less restrictive remedy is available, and (2) that the statutory priority of who will be the guardian will only be skipped over for "good cause" before the appoint of someone at a lesser level. Meek v. Linton, __ Md,App. ___ (2020 WL 2070363) (April 29, 2020) (Woodward).

The Meek case involved a contested guardianship proceeding between a sister and a brother for control of mother's living arrangement and management of her property due to her incapacity from dementia.

The first issue was whether an agent duly appointed and acting under a health care directive is per se less intrusive than a formal guardianship proceeding. The sister was named by her mother as the health care agent under a health care directive signed while the mother was competent. The sister predictably argued that an agent under a health care directive is an arrangement much less restrictive than a formal guardianship and that she is willing and capable to act as her mother's agent. The statuary provision, however, reads that a guardianship of the person is appropriate only if "no less restrictive form of intervention is available that is consistent with a person's welfare and safety." Est. & Trusts § 13-7-5(p).

The underlying dispute between the sister and brother was whether their mother should remain in her house with caregivers cobbled together during the daytime or whether their mother should be placed in a special dementia unit of a nursing facility where she would receive 24-hour supervised care. In the Circuit Court for Dorchester County, the brother successfully argued that staying in her home was key to mother's welfare where she had adequate supervision and where she had always said that she wanted to be with her husband, her dog, and among familiar surroundings. The mother's attending physician supported that position from a medical standpoint because in his opinion she was receiving adequate care and that in his experience patients often would decline rapidly if moved to unfamiliar surroundings. The physician also testified that the mother expressed an interest of never being put in such a facility but remining home if at all possible - never in a "box" were her words.

Instead of a narrow focus of which mode of intervention is more restrictive, The courts (both the Circuit Court and the Court of Special Appeals) looked to how the health care agent would exercise her authority and whether that exercise would result in a greater restriction on their mother than the path implemented by her brother. On the face of it, of course, the appointment by a person of a health care agent and the agent acting under the authority which was given by that person while competent appears less restrictive than an appointment by a court of a guardian of the person. A guardianship involves a significant liberty infringement. The Court of Special Appeals relied, in part, on an earlier decision authorizing a guardianship to force a patient at Clifton T. Perkins Hospital to take medications. In that case the Court of Special Appeals held that "the issue is [not] whether a less restrictive form of intervention exists, rather, the issue is 'whether a less restrictive alternative is available and consistent with (the patient's) own welfare and safety needs.'" The Matter of Meddings, 244 Md.App. 204 (2019). The Court concluded that it should not limit its inquiry simply to finding whether a less restrictive form of intervention may exist but that the less restrictive form of intervention must be consistent with that person's welfare and safety.

Aside from determining that there is no less restrictive intervention than a guardianship, the other key issue is who should be the guardian. Maryland statute establishes priorities for the appointment of a guardian of the person and the health care agent appointed by the disabled person while competent is a very high priority for appointment. Est. & Trusts § 13-707(a)(2). The statute, however, does not need to be strictly followed and "for good cause, the court may pass over a person with priority and appoint a person with a lower priority." Est. & Trusts § 13.707(c)(1)(ii). Here, the only basis for having the trial court pass over the sister is the disagreement as to the mother's health care and where she should receive such care.

The only earlier reported Maryland case that had addressed the issue of good cause in the appointment of a person with a lower priority was Mack v. Mack, 239 Md. 188 (1993). In Mack, the contested guardianship proceeding was between the father of his comatose son and the wife of the son over who should be guardian of the person. The underlying issue was whether someone in a persistent vegetative state could be permitted to die by stopping tube feeding when the patient's desires are not known. The lower court denied the wife (who had a priority) to be guardian of the person of her husband because she was going to transfer the guardianship to Florida which permitted the stopping of the feeding tube. At the time, Maryland law did not permit such intervention. The lower court awarded the father the guardianship because to permit the wife to become guardian would be to permit her to implement a health care decision contrary to the settled common law of Maryland at the time. Essentially it was what the guardian was going to do once becoming guardian that established the good cause not to appoint the wife.

On appeal, the Court of Appeals reversed the part of the circuit court's opinion skipping over the wife's higher priority solely because of the differences on the removal of the feeding tube saying that there was no finding that she could or would not fulfill the duties of guardian. It then held that without a clear direction from the son while competent whether he would have wanted removal of the tube, however, it was not permitted under the Maryland common law. On its face, the Mack decision would seem to favor the sister's position in Meek. The Court of Special Appeals, however, pointed to the statement in Mack that although the statutory preference in the appointment of a guardian may seem mandatory and absolute it "is always subject to the overriding concern of the best interest of the ward." Indeed, the relationship of the Court in guardianship cases is always ultimately subject to the ward's best interest. "Lest sight be lost of the fact, we remind all concerned that a court of equity assumes jurisdiction in guardianship matters to protect those who, because of illness or other disability, are unable to care for themselves. In reality the court is the guardian, an individual who is given that title is merely an agent or arm of that tribunal in carrying out its sacred responsibility." Kicherer v. Kicherer, 285 Md. 114 (1979).

The Meek Court determined that it was in the mother's best interest to pass over the priority of the sister as guardian because of the sister's stated intention to make the institutional placement. In Meek, the Court below and the Court of Special Appeals found a great deal of support for the mother staying at home. Contested guardianships are fact-intense hearings. The Circuit Court finding of facts was critical to the decision on appeal. Aside from being an important decision under the guardianship statute, it demonstrates the importance of establishing a solid factual basis at the evidentiary hearing for the Circuit Court to make its decision.

The Maryland estate litigation attorneys at Franke, Sessions and Beckett LLC understand the process involved and are prepared to handle both contested and uncontested guardianships. For over 35 years, our law firm has concentrated on the law of estates and trusts - including a wide variety of fiduciary litigation. We handle guardianship cases (contested or uncontested), disputes over the meaning of estate planning documents, arguments involving personal representatives or trustees, challenges to documents based on a lack of capacity or undue influence. On a regular basis, we try cases before the Orphans' Courts and the Circuit Courts of various Maryland counties. We also take appeals to the Court of Special Appeals and the Maryland Court of Appeals. We are not, however, a general litigation firm. We focus on Will, Trust, and other fiduciary litigation. We have deep experience in and knowledge of the Maryland law of estates and trusts, concentrating as a firm on fiduciary litigation, planning and administration. In order to schedule a consultation with an experienced Maryland estate litigation attorney, call 410-263-4876 to get in touch with our Annapolis office.

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Maryland Guardianships - Franke Beckett LLC

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06/19/2020 by Frederick R. Franke, Jr. Appointing a guardian for a disable person requires a court proceeding. Often, when a guardian is needed for a family member, there is general agreement who should become the guardian. To have that person appointed guardian, however, a court proceeding is still required.

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Franke Beckett LLC
https://fredfranke.com
Phone: 410-263-4876
151 West Street, Suite 301
Annapolis, MD 21401

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Medicaid & Other Government Claims Against Maryland Estates

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Medicaid & Other Government Claims Against Maryland Estates

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02/09/2021 by Jack K. Beckett

A recent reported Court of Special Appeals case clarified how the statutory 6-month claim period works for Medicaid reimbursements from the deceased recipient's estate. Maryland Department of Health v. Myers, Court of Special Appeals, No. 3168, September Term 2018, 2020 WL 7395536 (December 17, 2020). The statutory interpretation should inform decisions by any personal representative dealing with an estate with potential Medicaid reimbursement exposure.

In general, claims against the estate of a decedent must be filed within the earlier of (1) 2 months from when the personal representative mails or otherwise delivers notice to a known creditor or (2) 6-months from the date of death (regardless of notice or even opening the estate). Md. Code Ann., Estates & Trusts ("ET") § 8-103 (a). Keying an absolute 6-months deadline from death instead of from notice of the appointment of a personal representative running in a newspaper avoids the "state action" element of the due process requirement under the U.S. Constitution. Tulsa Professional Collection Services v. Pope, 485 U.S. 478 (1988); Ohio Cas. Ins. Co. v. Hallowell, 94 Md. App. 444 (1993).

These limitations do not apply to either claims by the state or by the United States. Medicaid reimbursement actions are state claims. ET § 8-103(f) governs Maryland Medical Assistance (i.e., Medicaid) claims. Its 6-month period runs from the date of the notice, not death. Specifically, Medicaid claims must be filed within the earlier of "(1) 6 months after publication of notice of the first appointment of a personal representative;" or (2) 2 months after the personal representative gives actual notice to the state. Federal claims are not so limited.

The "notice" of the appointment of the personal representative requires for notice to be published "in a newspaper of general circulation in the county of appointment once a week in 3 successive weeks." ET § 7-103. The issue in Myers was whether the deadline for the filing of creditor claims runs from the publication of the first such notice, or from the date after all 3 required notices had run. Applying the plain meaning rule to the statute, the Court in Myers concluded that "the General Assembly made a policy determination that, to adequately provide notice to creditors and other interested parties of the decedent's death and the appointment of a personal representative, three successive weekly publications of the notice were required; anything less would be incomplete and partial." Accordingly, the running of the 6-month claims period for state Medicaid reimbursement claims under ET § 8-103 (f) does not commence with the first published notice; it begins to run only after the three required notices have published. (Note that claims of ordinary-non-state-claimants are governed by ET § 8-103 (a), not (f), and therefore the Myers holding does not apply).

Decedents' estates may also be subject to claims by the United States. If so, the priority of those claims is subject to the Federal priority statute. 31 U.S.C. § 3713 (a)(1)(B) of that statute provides that "a claim of the United States Government shall be paid first when ... the estate of a deceased debtor, in the custody of the executor or administrator, is not enough to pay all debts of the debtor." The literal language of the Federal priority statute is absolute. Federal cases, however, have permitted a carve out for reasonable funeral and estate administrative expenses. United States v. Weisburn, 48 F. Supp. 393 (E.D. Penn. 1943); also see United States v. MacIntyre, 2012 WL 2403491 (unreported 2012) for a list of cases supporting the carve out. MacIntyre is a chilling example of personal liability imposed on the fiduciary based on constructive notice of the federal claim for taxes due. The statute of limitation for federal claims is governed by federal, not state law.

Medicaid is a joint federal/state program, and federal law actually directs state agencies administering Medicaid benefits to file claims for reimbursement from recipients' estates. Fortunately for personal representatives, however, state (as opposed to federal) law governs the filing and perfection of Medicaid estate claims.

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Medicaid & Other Government Claims Against Maryland Estates - Franke Beckett LLC

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02/09/2021 by Jack K. Beckett A recent reported Court of Special Appeals case clarified how the statutory 6-month claim period works for Medicaid reimbursements from the deceased recipient's estate. Maryland Department of Health v. Myers, Court of Special Appeals, No. 3168, September Term 2018, 2020 WL 7395536 (December 17, 2020).

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The Ultimate Guide for Maryland Estate Planning During COVID

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The Ultimate Guide for Maryland Estate Planning During COVID

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06/17/2020 by Frederick R. Franke, Jr.

This article is being written against the backdrop of the COVID-19 pandemic. As with society in general, the legal community has scrambled to keep firm clients, lawyers, paralegals, staff and their families safe while shifting to alternative work arrangements. Social distancing practices make things that were relatively easy to accomplish before the epidemic much more difficult.
The "Formalities" Hurdle
For Maryland estate planning lawyers, one challenge arises from the kind and character of the "formalities" required by various documents. Maryland law controls the degree that various estate planning documents required in-person witnessing and/or notarization. Prior to the health emergency declared by Governor Hogan, these rules were well established. Wills require two witnesses who sign in the presence of the testator/testatrix. Grout v. Sundberg, 213 Md. App. 144, 161-2 (2013). Powers of attorney require two witnesses and a notary. Est. & Trusts § 17-110 (a). Health care directives generally require two witnesses although an electronic advanced directive where the declarant's identity has been properly authenticated eliminates the necessity of witnesses. Health Gen § 5-602 (c). Under these well-established formality requirements, remote execution of many estate planning documents was not possible.
Pre-COVID Remote-Electronic Transactions
Maryland has two statutes, however, that permit remote-electronic transactions. The older statute is the Maryland Uniform Electronic Transaction Act which is part of the commercial law statute. These provisions permit remote-electronic transactions to take place with virtual signatures. The type of transactions contemplated by the Act are bilateral contracts. Real estate contracts, for example, are generally now exclusively remote-electronic contracts. Section 21-102 of the Maryland Uniform Electronic Transaction Act specifically excludes Wills as being a document that can be accomplished under the Act. Wills, of course, are unilateral documents and not bilateral contracts which presents unique concerns as to the efficacy of such a document.

The second Maryland statute is the Revised Uniform Law on Notarial Acts (2018) which was enacted last year but effective October 2020. This statute permits a notary to attest to a document of a "remotely located individual" if the signing individual and the notary are able to communicate with each other simultaneously by sight and sound. Physical presence is not required. The Maryland Power of Attorney Act requires two witnesses and a notary. Est & Trusts § 17-110 will permit, once the remote notary act becomes effective, that a power of attorney may use "communication technology" pursuant to the State Government Act § 18-214 (the new Notary Act) for the purposes of notarizing a power of attorney.
The Maryland Pre-COVID Statutes Did Not Help Estate Planning
Neither of these statutes facilitated estate planning under COVID-19 conditions because one statute specifically excluded planning documents from its scope and the other will not be effective until October. Fortunately, Governor Hogan issued two executive orders that filled the gap - one dated March 30 th permitting remote notarization and one dated April 10 th covering remote witnessing.
End Runs Around the Maryland Formalities Statutes
Before these executive orders, planners could use several "work-arounds" to avoid the formality requirements of Wills or health care directives. A Declaration of Trust could act as a Will substitute. It only requires the settlor's signature and would side-step needing a recordable deed or other formal acts to fully fund it. See Est. & Trusts § 14.5 (2) (creation of trust) and Real Prop. § 5-105 (writing required for declaration of trust). Once established, a declaration of trust would be a substitute for a power of attorney to the extent "funded" as well as being a Will substitute at death. Health care directives generally require witnesses, however, by statute "any authentic expression made by an individual while competent of the individual's wishes regarding health care for the individual shall be considered." Health Gen. § 5-602 (a)(1). This is undoubtedly a person's constitutional right. Cruzan v. Dir., Mo. Dep't of Health, 497 U.S. 261 (1990). Thus, a signed, but un-witnessed, health care directive with an explanation that it is executed during the health care emergency should be enforceable. Since the two executive orders, a whole range of traditional estate planning documents now can be remotely witnessed and/or notarized assuming the client has access to audio/visual technology. For clients without that capability, however, the work-around techniques are still useful.
Maryland Planning Under the Executive Orders
Two executive orders issued by Maryland Governor Hogan made estate planning much easier during the COVID-19 crisis.. The combined effect of these two executive orders permit remote witnessing and remote notarization during the pendency of the state of emergency. A Will, power of attorney and a health care directive may be remotely witnessed under Executive Order 20-04-10-01 (the "Remote Witnessing Order"). To comply with Maryland law, however, the required witnesses must be in the "electronic presence" of the person signing the document. This requires video conferencing to permit all the various individuals to observe and communicate with each other to the same extent as if physically present in the same location.
Remote Witnesses Are Permitted
Under the Remote Witnessing Order, a "supervising attorney" must oversee the remote witnessing and take reasonable steps to assure that the witnessing follows the proscribed rules. The supervising attorney, however, cannot be one of the witnesses.

At the end of the process the supervising attorney assembles the signed estate planning document and the signed conformed copies of the original signed by the witnesses. That package becomes the completed, fully executed estate planning document.

The Remote Witnessing Order also permits the person signing to use an electronic signature, much like real estate and other contracts are commonly "signed" under prevailing commercial practice. For estate planning documents, however, perhaps this should be avoided unless no other option is workable. An electronic signature introduces an additional proof issue as to whether it was, in fact, signed as claimed. Unlike contracts, estate planning documents are unilateral and lack a process of negotiation that can supply an element of verification.
Remote Notary Is Permitted
An individual need not be in the physical presence of a notary public if rules are followed as set out by the Maryland Governor's emergency Order Number 20-03-30-04 (the "Remote Notary Order").

Like the Remote Witnessing Order, a remote notary must use "communication technology" permitting real-time communication among the various participants. The notary must confirm that the document being notarized is the same as the document being signed. The remote notarization is recorded, and the audio-visual record preserved for 10 years. These rules are part of a process designed to reduce trickery or fraud. Like the presence of a supervising attorney, it is meant to create a likelihood that the documents being signed are free from fraud, duress, and/or undue influence.
Is Maryland Headed Toward a More Permanent Solution?
The Remote Witnessing Order and Remote Notary Order are temporary. Both may promote interest in a model act approved last year by the commissioners on Uniform State Acts as the Uniform Electronic Wills Act (the "E-Wills Act").Various states, not Maryland, have enacted, or at least introduced legislation, permitting electronic Wills. The E-Will Act has remote execution provisions somewhat similar to the two orders and it further permits "Wills" to be in pure electronic form.

As far as the remote witnessing aspects are concerned, the executive orders have a feature that would improve the E-Will Act. The uniform act does not provide for a supervising attorney to oversee the process which was seen as a protection against fraud or other skullduggery. A Maryland E-Will statute should provide that if executed under a supervising attorney it would carry a presumption of validity like the effect that an attestation clause signed by witnesses in the physical presence of the testator/testatrix has under current law. Van Meter v. Van Meter, 183 Md. 614, 617-18 (1944). If not so supervised, the electronic Will could still be accepted if its due execution is established by clear and convincing evidence.

A second difference between the executive orders and the E-Will Act is that the executive orders do not fundamentally change the importance, indeed necessity, of following the procedures involved in creating a Will. The rules governing traditional Wills, contained in the Wills acts or Statute of Wills, are protocols that are meant to protect against improper conduct. The witnesses are present and able to observe the testator signing or acknowledging the Will. Under the executive orders, witnesses are still present albeit in "electronic presence" but they are still able to serve this protective function. Also, the formal ritual in executing a Will increases the appreciation of the serious intent that the Will reflects.

The uniform E-Wills Act encourages an option for a "harmless error" doctrine which would excuse failure to follow the formalities of remote execution if the proponent of the document or record establishes by "clear and convincing evidence" that the decedent intended the record to be his or her Will. The harmless error doctrine was included in the Uniform Probate Code in 1990 and, since then, only 11 states have adopted the rule. Although popular in academia, the harmless error rule has not gained much currency among the states. The approach to remote witnessing of Wills permitted by the emergency executive order does not relax the requirement of two witnesses it merely permits the electronic presence of those witnesses.

During an event such as the coronavirus epidemic, an E-Will statute has obvious appeal if only to make permanent the remote execution of estate planning documents. Because it is such a departure from existing law and because it raises concern whether it adequately safeguards against fraud and undue influence, however, it should not be pushed through on an emergency basis. Ironically, the two executive orders created in the COVID-19 emergency are likely to be a precursor to a more permanent statute. The Maryland Estates and Trusts Bar should use its experience dealing with the executive orders to help craft a suitable statute that permits electronic execution of Wills and other estate planning documents (perhaps also permitting wholly electronic documents) while preserving the safeguards of the historic procedure.

Our experience using both remote witnessing and remote notarization has been positive. Many of our client are appreciative that traditional estate planning can be effectuated without leaving the safety of their homes. These same techniques, however, ought to be permitted in a post-COVID world. Often clients wish to accomplish last minute planning before leaving on a trip. Remote witnesses and notarization would eliminate a trip to the lawyers office on top of other last minute chores before departure.

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The Ultimate Guide for Maryland Estate Planning During COVID - Franke Beckett LLC

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06/17/2020 by Frederick R. Franke, Jr. This article is being written against the backdrop of the COVID-19 pandemic. As with society in general, the legal community has scrambled to keep firm clients, lawyers, paralegals, staff and their families safe while shifting to alternative work arrangements.

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Estate planning can be a complex legal topic but can be easily understood as a form of emergency preparedness. Just as emergency preparedness is all about minimizing a disaster's impact with a calculated plan of action, estate planning is about minimizing the financial or legal impact of your death or disability on your family.

There are plenty of tools to help you with estate planning in Maryland. Whether you live in Silver Spring, Frederick or Baltimore, you have access to legal estate planning resources like wills, living trusts, advance directives and more. Using LawInfo's Maryland estate planning articles, you can learn about the legal ins and outs of securing your family's future and connect with a qualified local attorney.

Maryland Wills

A Last Will and Testament is a common method used by Maryland residents to make their estate distribution wishes known. If you want a certain person or organization to receive an asset from your estate when you die, you can include that wish in your will. You can also assign a guardian to your children under 18 years of age if you don't have a surviving spouse when you die.

Maryland will only recognize typewritten wills signed by the testator (the person for whom the will is written) and two witnesses. Holographic (handwritten) and nuncupative (oral) wills are not legally recognized. Maryland makes an exception on holographic wills for active members of the U.S. armed services.

Maryland Intestacy Laws

If any part of your estate isn't included in your will or a trust when you die, it is distributed among your family by Maryland's intestate succession laws. When this happens, any wishes you or your family may have had about the intestate assets are forfeit and the law decides who gets what assets.

If you die intestate, your assets will be distributed by living succession to your:

1. Spouse

2. Children

3. Parents

4. Siblings

5. Grandparents

6. Aunts and uncles (your grandparents' children)

7. Great-grandparents

8. Great-grandparents' children

9. Stepchildren

If you have no living inheritors, your intestate assets will escheat to one of two Maryland government organizations. Your estate will escheat to the Department of Health and Mental Hygiene if you received long-term care benefits from the Maryland Medical Assistance Program. If you didn't receive such benefits, your estate escheats to your county's board of education for use by public schools.

Maryland Advance Directives

While many Maryland residents' concerns with estate planning are focused on what happens to their property and family after death, another important part of estate planning is concerned with healthcare. There may come a time when you become incapacitated or incompetent to making decisions from an accident or failing health.

You can ensure that your healthcare needs are addressed when you're no longer able to make decisions yourself using Maryland's Advance Directive. This is a legal document in which you can select a health care agent and list your healthcare wishes (sometimes called a "living will").

By giving a health care agent the durable power of attorney, you are permitting them to make healthcare decisions when you are unable to. Since the Advance Directive combines the power of attorney with your living will, you can specify the types of healthcare treatments you want or don't want your agent to permit.

Speak to an Experienced Estate Planning Attorney Today

This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified estate planning lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local estate planning attorney to discuss your specific legal situation.

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Estate planning can be a complex legal topic but can be easily understood as a form of emergency preparedness. Just as emergency preparedness is all about minimizing a disaster's impact with a calculated plan of action, estate planning is about minimizing the financial or legal impact of your death or disability on your family.

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Welcome to the Maryland's Estate Planning Laws section. Here you can find information on probate law, estate taxes and wills in the Empire State. A will can help transfer property and avoid tax burdens. Depending on your wishes and the size of your estate, your will in Maryland could be a single page or a lengthy, complex document. Plus a trust can either be created during a person's lifetime, or after death, by a will. There are a number of different types of trusts serving a wide range of functions. You can also declare your wishes regarding life-prolonging medical procedures in Maryland. Click on a link below to get started.

Learn About Maryland Estate Planning Laws

Maryland Estate Planning Law Articles

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Welcome to the Maryland's Estate Planning Laws section. Here you can find information on probate law, estate taxes and wills in the Empire State. A will can help transfer property and avoid tax burdens. Depending on your wishes and the size of your estate, your will in Maryland could be a single page or a lengthy, complex document.

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Topics on this page:

What is a Trust?

A trust is a legal arrangement where one person, usually called the grantor (also called transferor or settlor) who gives legal ownership of specific property to a second person (called a "trustee") to use to benefit a third person (the "beneficiary"). Trusts are used for many reasons, but people often use them like wills to pass property to their beneficiaries. In some situations, trusts transfer property faster and cheaper than a will.

The law of trusts goes back hundreds of years and was mostly developed through judge made law, or "common law." In addition, Maryland also has the Maryland Discretionary Trust Act and Maryland Uniform Charitable Trusts Administration Act that give specific requirements and forms for trusts created under those laws. However, the Maryland laws do not limit other means of declaring trusts.

Read the Law: Md. Code, Estates & Trusts § 14-404

Trusts are very flexible. Trusts can be for a charitable or private purpose. Trusts can be revocable or irrevocable. Trusts can be created in the lifetime of the grantor (a "living" or "inter vivos" trust) or at the death of the grantor (a "testamentary" trust).

Uses of a Trust

Trusts can be used for any legal purpose. Examples of these purposes are the management of assets on behalf of family members or children in case their parents are disabled or die, protection against creditors, eliminating the need for probate, minimizing estate and other property transfer taxes, and control over insurance policies as well as control over businesses. Trusts are very popular in estate planning because property that is transferred by trust does not go through probate like a will. So, the fees related to probate are avoided. Trusts can also be used to lower the estate tax due for married couples with larger estates. Trusts are also often set up to provide for the health of an individual. Trusts can even be set up to care for a beloved animal after the death of the owner.

Read the Law: Md. Code, Estates & Trusts § 14.5-407

Creating a Trust

In order to create a trust, the grantor writes a document called a Declaration of Trust. Technically, trusts do not need to be in writing, but execution of a trust is almost impossible unless it is in writing.

Read the Law: Md. Code, Estates & Trusts § 14.5-406

In the declaration, the grantor transfers legal ownership of the property to be placed in trust to the trustee and names the beneficiary. The grantor must be legally competent to make the trust.

Read the Law: Md. Code, Estates & Trusts § 14.5-401 and 14.5-402

The trust does not exist until a trustee accepts receipt of the property. A trustee may be a person, institution, or other organization. The declaration can include a list of who the grantor wants to be the next trustee if one cannot continue. The trust can be set up with the grantor as the first trustee. Trusts created under the Maryland Discretionary Trust Act assume that the grantor (called the "declarant") will serve as the trustee.

Read the Law: Md. Code, Estates & Trusts § 14-401

Trustees are empowered to manage and invest the property held in trust for the benefit for the beneficiaries. Trustees have a fiduciary duty to the beneficiary, which means they must use reasonable care in managing the property for the beneficiary.

Read the Law: Md. Code, Estates & Trusts § 14-405

The property to be held in trust must be specifically described in the declaration of trust. Though no specific words or actions are required to transfer property into trust, grantors still have to follow the laws for transferring property, like real estate, that have their own rules for transfer.

Read the Law: Md. Code, Estates & Trusts § 14-404

Trusts created under The Maryland Discretionary Trust Act have to say that the property is to be held in trust under the act. Trusts under the Maryland Discretionary Trust Act with no designation will be assumed to be revocable.

Read the Law: Md. Code, Estates & Trusts § 14-402

The Maryland Discretionary Trust Act includes forms for the creation of a trust under the act. Generally, trusts end as soon as the first of three things happens:

1. The beneficiary dies;

2. On a date or the happening of an event specified in the trust document; OR

3. The trustee determines that by judicial, legislative, or administrative action, trust property or income has been or will be determined to be property or an available resource of the beneficiary.

Read the Law: Md. Code, Estates & Trusts § 14-406

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A trust is a legal arrangement where one person, usually called the grantor (also called transferor or settlor) who gives legal ownership of specific property to a second person (called a "trustee") to use to benefit a third person (the "beneficiary").

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Estate Planning is the process of organizing your personal and financial affairs to be prepared in the event of disability and to arrange for the orderly transmittal of your property to your intended beneficiaries. The key is to fashion a plan specifically designed to your needs and desires. Our trust & estate lawyers work with our clients, taking the time necessary to ascertain those needs and desires, and to explore various ways to implement a tailor-made estate plan.

Estate planning can be complex for numerous reasons: there may be complexity due to the state and/or federal tax laws; there may be a need to protect resources for minor children and to construct a mechanism for those children to increasingly step into the responsibility of handling their inheritance as they reach maturity; there may be a desire to protect assets from an heir's potential creditors; there may be concern for caring for a special needs child; concerns may arise due to a second marriage and the need to balance providing for one's spouse with caring for children from an earlier marriage. Proper estate planning involves understanding a client's unique circumstances and constructing a plan that will cover a client's specific concerns.

Some of the documents your estate planning attorney can prepare are: simple and complex wills, revocable trusts, life insurance trusts, special needs trusts, family partnerships, charitable remainder trusts, powers of attorney, heath care directives, and many other documents.

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Estate Planning is the process of organizing your personal and financial affairs to be prepared in the event of disability and to arrange for the orderly transmittal of your property to your intended beneficiaries. The key is to fashion a plan specifically designed to your needs and desires.

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06/19/2020 by Frederick R. Franke, Jr.

Appointing a guardian for a disable person requires a court proceeding. Often, when a guardian is needed for a family member, there is general agreement who should become the guardian. To have that person appointed guardian, however, a court proceeding is still required. Often if a family is acting in the best interest of the disabled person the court proceeding may seem "routine." Nevertheless, there are rules that the Judge follows to make sure that a guardianship is necessary and that the disabled individual's rights are protected

In other cases, there may be a hotly contested proceeding over whether a guardian needs to be appointed and who should be that guardian. In a recent, and hotly contested case, the Court of Special Appeals looked at 2 important constraints dictated by the guardianship statute: (1) the requirement that a guardianship will not be established if a less restrictive remedy is available, and (2) that the statutory priority of who will be the guardian will only be skipped over for "good cause" before the appoint of someone at a lesser level. Meek v. Linton, __ Md,App. ___ (2020 WL 2070363) (April 29, 2020) (Woodward).

The Meek case involved a contested guardianship proceeding between a sister and a brother for control of mother's living arrangement and management of her property due to her incapacity from dementia.

The first issue was whether an agent duly appointed and acting under a health care directive is per se less intrusive than a formal guardianship proceeding. The sister was named by her mother as the health care agent under a health care directive signed while the mother was competent. The sister predictably argued that an agent under a health care directive is an arrangement much less restrictive than a formal guardianship and that she is willing and capable to act as her mother's agent. The statuary provision, however, reads that a guardianship of the person is appropriate only if "no less restrictive form of intervention is available that is consistent with a person's welfare and safety." Est. & Trusts § 13-7-5(p).

The underlying dispute between the sister and brother was whether their mother should remain in her house with caregivers cobbled together during the daytime or whether their mother should be placed in a special dementia unit of a nursing facility where she would receive 24-hour supervised care. In the Circuit Court for Dorchester County, the brother successfully argued that staying in her home was key to mother's welfare where she had adequate supervision and where she had always said that she wanted to be with her husband, her dog, and among familiar surroundings. The mother's attending physician supported that position from a medical standpoint because in his opinion she was receiving adequate care and that in his experience patients often would decline rapidly if moved to unfamiliar surroundings. The physician also testified that the mother expressed an interest of never being put in such a facility but remining home if at all possible - never in a "box" were her words.

Instead of a narrow focus of which mode of intervention is more restrictive, The courts (both the Circuit Court and the Court of Special Appeals) looked to how the health care agent would exercise her authority and whether that exercise would result in a greater restriction on their mother than the path implemented by her brother. On the face of it, of course, the appointment by a person of a health care agent and the agent acting under the authority which was given by that person while competent appears less restrictive than an appointment by a court of a guardian of the person. A guardianship involves a significant liberty infringement. The Court of Special Appeals relied, in part, on an earlier decision authorizing a guardianship to force a patient at Clifton T. Perkins Hospital to take medications. In that case the Court of Special Appeals held that "the issue is [not] whether a less restrictive form of intervention exists, rather, the issue is 'whether a less restrictive alternative is available and consistent with (the patient's) own welfare and safety needs.'" The Matter of Meddings, 244 Md.App. 204 (2019). The Court concluded that it should not limit its inquiry simply to finding whether a less restrictive form of intervention may exist but that the less restrictive form of intervention must be consistent with that person's welfare and safety.

Aside from determining that there is no less restrictive intervention than a guardianship, the other key issue is who should be the guardian. Maryland statute establishes priorities for the appointment of a guardian of the person and the health care agent appointed by the disabled person while competent is a very high priority for appointment. Est. & Trusts § 13-707(a)(2). The statute, however, does not need to be strictly followed and "for good cause, the court may pass over a person with priority and appoint a person with a lower priority." Est. & Trusts § 13.707(c)(1)(ii). Here, the only basis for having the trial court pass over the sister is the disagreement as to the mother's health care and where she should receive such care.

The only earlier reported Maryland case that had addressed the issue of good cause in the appointment of a person with a lower priority was Mack v. Mack, 239 Md. 188 (1993). In Mack, the contested guardianship proceeding was between the father of his comatose son and the wife of the son over who should be guardian of the person. The underlying issue was whether someone in a persistent vegetative state could be permitted to die by stopping tube feeding when the patient's desires are not known. The lower court denied the wife (who had a priority) to be guardian of the person of her husband because she was going to transfer the guardianship to Florida which permitted the stopping of the feeding tube. At the time, Maryland law did not permit such intervention. The lower court awarded the father the guardianship because to permit the wife to become guardian would be to permit her to implement a health care decision contrary to the settled common law of Maryland at the time. Essentially it was what the guardian was going to do once becoming guardian that established the good cause not to appoint the wife.

On appeal, the Court of Appeals reversed the part of the circuit court's opinion skipping over the wife's higher priority solely because of the differences on the removal of the feeding tube saying that there was no finding that she could or would not fulfill the duties of guardian. It then held that without a clear direction from the son while competent whether he would have wanted removal of the tube, however, it was not permitted under the Maryland common law. On its face, the Mack decision would seem to favor the sister's position in Meek. The Court of Special Appeals, however, pointed to the statement in Mack that although the statutory preference in the appointment of a guardian may seem mandatory and absolute it "is always subject to the overriding concern of the best interest of the ward." Indeed, the relationship of the Court in guardianship cases is always ultimately subject to the ward's best interest. "Lest sight be lost of the fact, we remind all concerned that a court of equity assumes jurisdiction in guardianship matters to protect those who, because of illness or other disability, are unable to care for themselves. In reality the court is the guardian, an individual who is given that title is merely an agent or arm of that tribunal in carrying out its sacred responsibility." Kicherer v. Kicherer, 285 Md. 114 (1979).

The Meek Court determined that it was in the mother's best interest to pass over the priority of the sister as guardian because of the sister's stated intention to make the institutional placement. In Meek, the Court below and the Court of Special Appeals found a great deal of support for the mother staying at home. Contested guardianships are fact-intense hearings. The Circuit Court finding of facts was critical to the decision on appeal. Aside from being an important decision under the guardianship statute, it demonstrates the importance of establishing a solid factual basis at the evidentiary hearing for the Circuit Court to make its decision.

The Maryland estate litigation attorneys at Franke, Sessions and Beckett LLC understand the process involved and are prepared to handle both contested and uncontested guardianships. For over 35 years, our law firm has concentrated on the law of estates and trusts - including a wide variety of fiduciary litigation. We handle guardianship cases (contested or uncontested), disputes over the meaning of estate planning documents, arguments involving personal representatives or trustees, challenges to documents based on a lack of capacity or undue influence. On a regular basis, we try cases before the Orphans' Courts and the Circuit Courts of various Maryland counties. We also take appeals to the Court of Special Appeals and the Maryland Court of Appeals. We are not, however, a general litigation firm. We focus on Will, Trust, and other fiduciary litigation. We have deep experience in and knowledge of the Maryland law of estates and trusts, concentrating as a firm on fiduciary litigation, planning and administration. In order to schedule a consultation with an experienced Maryland estate litigation attorney, call 410-263-4876 to get in touch with our Annapolis office.

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Maryland Guardianships - Franke Beckett LLC

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06/19/2020 by Frederick R. Franke, Jr. Appointing a guardian for a disable person requires a court proceeding. Often, when a guardian is needed for a family member, there is general agreement who should become the guardian. To have that person appointed guardian, however, a court proceeding is still required.

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Estate Planning

Estate Planning is a process that allows you to plan for your lifetime goals and objectives and to provide for the transmittal of assets at your death. Having a solid estate plan ensures that your property and wealth will pass smoothly to your beneficiaries at the time of death and according to your wishes. Estate Planning includes the transfer of property at death along with an assortment of other personal matters that may or may not include tax planning.

Estate planning consists of several parts, including: a will, power of attorney, a living will or healthcare proxy, and sometimes a trust. Because estate planning is strongly effected by frequently complex federal and state laws, it is important to consult a lawyer knowledgeable in estate and trust laws for creative solutions and suggestions. Feel free to contact us for a consultation.

Probate vs. Non-Probate

Types of non-probate property

Wills

Trusts

Estate Administration

Powers of Attorney

Powers of Attorney can be limited (restricted to certain tasks or transactions) or general (broad, allowing the Agent to do anything in your best interest). A Durable Power of Attorney allows your Agent to act for you if you become incapacitated. A Power of Attorney is often preferable to adding joint owners to accounts for the convenience of the owner, as to avoid later disputes on ownership. The Agent should be carefully chosen, as the powers are broad.

Healthcare Directives

Each state allows an individual to express his/her wishes of treatment in certain medical situations-life-threatening or other injuries-and to appoint a health care agent to speak on his/her behalf if he/she is unable. These documents are referred to as "health care directives", "living wills" or "health care proxies", varying state to state. Living Wills are declarations that provide for the avoidance of extraordinary measures if you are in a permanent vegetative state, end-stage condition or terminal condition. Health care decisions may be delegated to an Agent who may make those medical decisions in accordance with a "best interest" standard. Some things you may want to consider when choosing your healthcare agent: Can he/she understand important medical information in regards to your treatment? Can he/she handle the stress of making difficult decisions? Can he/she keep your interests and wishes in mind while making those decisions?

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Frequently Asked Questions | Estate Planning Lawyers

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Estate Planning is a process that allows you to plan for your lifetime goals and objectives and to provide for the transmittal of assets at your death. Having a solid estate plan ensures that your property and wealth will pass smoothly to your beneficiaries at the time of death and according to your wishes.

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Overview of Maryland Trust And Estate Administration

When a person dies, her/his financial affairs need to be settled and the property distributed to the heirs. Although this process may sound straightforward, even easy, it is not.

Estate & Trust Administration is the process of settling the estate of a decedent. The person responsible for handling the estate and/or trust has duties to the heirs, beneficiaries, and creditors of the estate.

The Will or trust document establishes the rules for distributing the assets to the beneficiaries . If a person dies without a Will or trust, state law controls distributions.

In Maryland, the person responsible for administering a probate estate is called the personal representative. Elsewhere the person may be called an executor or executrix. Trusts, on the other hand, are administered by a trustee. In either event, the person charged with administering the estate must make sure any taxes are paid and other bona fide creditors satisfied., The possible death taxes for Maryland decedents are (1) the Maryland estate tax, (2) the federal estate tax, and (3) the Maryland inheritance tax. Other creditors may be credit card providers, medical expenses and mortgages and other items.

Estate and Trust administration largely proves the old adage that "the devil is in the details." The personal representative or trustee must keep exact records so if challenged they can track every transaction. Even if not challenged, family harmony requires a large degree of transparency in order to reassure all that they are being treated fairly.

The Maryland estate administration lawyers and other professionals at Franke, Sessions & Beckett LLC have helped many fiduciaries navigate estate and trust administration. We provide full services, including in house accounting services.

What Is The Difference Between Probate And Non-Probate?

First, it is important that we define the term "estate administration." This term may refer to the administration of a decedent's "probate estate" or administration of "non-probate property," or both. Probate is the process of administering and changing the title of assets held solely in the name of the decedent to the designated recipient of the property under court supervision. Probate assets pass under a decedent's will, or if the decedent' did not have a will, by the terms of Maryland intestacy law.

In contrast, non-probate assets are typically not governed by a will, but instead pass in accordance with the governing instrument. Examples of non-probate transfers include transfers by title of a deed (if it contains rights of survivorship), by a beneficiary designation on an account, under the terms of a revocable trust, or by virtue of some other arrangement associated with the asset.

Thus, for this paper, the term "estate administration" includes the process of passing a decedent's assets to legatees or beneficiaries regardless of whether those assets are probate or non-probate assets.

What Does Being A "Fiduciary" Mean?

Reduced to its simplest elements, the administration of an estate involves gathering a decedent's assets, paying the decedent's debts, and distributing the remaining property to the estate's beneficiaries or legatees.

The individual responsible for this process is called a fiduciary. If the fiduciary is named under a will, the fiduciary is called the personal representative (also commonly known as an executor/executrix in other jurisdictions). If the fiduciary is appointed over a trust, the fiduciary is called a trustee. "Being a fiduciary for a trust or estate is an honor but it comes with serious obligations to those interested in the estate - both beneficiaries and creditors. If you have never administered an estate before, you may be surprised how much responsibility and work is involved," says Anne Franke, a CPA who assists in estate administration with the Annapolis estates and trusts law firm of Franke, Sessions & Beckett, LLC.

A Fiduciary's First Steps

The fiduciary's main obligation in estate administration is to preserve the deceased individual's assets. Thus, it is important that a decedent's home and possessions are secured. Mail should be collected and processed. The decedent's papers should be gathered. Even uninteresting papers that may not seem "relevant" can become useful to the administrative process.

During this process, the fiduciary should keep detailed records so all expenses incurred for the administration of the estate, including all funeral and burial costs, are paid properly out of the estate or reimbursed to the individuals who covered the expenses.

How Is A Personal Representative Appointed In Probate?

The Orphans' Court appoints the personal representative by granting that individual "letters of administration." If the decedent died with a will, the document generally names the personal representative and the person named is generally appointed by the court. The person named in the will as personal representative has the highest priority to be appointed as fiduciary of the estate under Maryland law. If there is no will, or the will fails to name a personal representative who can serve, Maryland statutory law sets out the priority of those entitled to be personal representative.

To open a probate estate, the person entitled to be named personal representative files a petition for probate with the Register of Wills in the county where the decedent had her domicile or had most of her property if not domiciled in Maryland at the time of death. Once the letters of administration are issued, the personal representative has authority to stand in the shoes of the decedent in order to wind up the decedent's affairs. Under some circumstances, a special administrator is appointed instead of a personal representative or a personal representative is changed into a special administrator. This is done because the powers of a special administrator are different than those of a personal representative.

Trustee Appointment

Unlike the appointment of a personal representative in a probate proceeding which requires the oversight of the probate court, a trusteeship is controlled by the terms of a trust and generally done without court involvement. Indeed, one reason revocable trusts are used in lieu of wills is to avoid involvement of the probate process at death. This works only if a person's assets are either transferred to the revocable trust during the settlor's life or are held in other non-probate structures (like a joint tenancy deed or pay-on-death account). Although, if something goes wrong, a court can become involved if a beneficiary or the trustee petitions for relief.

Different Oversight For Probate And Trust Estate Administration

Unlike some other jurisdictions, the Maryland probate court (the Orphans' Court) does not have jurisdiction over non-probate arrangements, including trusts. If a question arises about a person representative's conduct or how distributions should be handled, those issues go before the Orphans' Court. If a question arises concerning non-probate arrangements, those issues are resolved in the Circuit Court not the Orphans' Court. "The separate procedures governing probate and non-probate property transmittal at death can cause confusion. This confusion is magnified by the ambiguous messaging by some promoters of revocable trusts which implies that you automatically avoid estate taxes by avoiding probate. Although a revocable trust is very useful estate planning tool and can provide clients with great benefits, it does not automatically let you side-step estate or inheritance taxes. For inheritance and estate tax purposes, property transfers from a will or a revocable trust are treated the same," says David Sessions, a principal of the Maryland estates and trust law firm of Franke, Sessions & Beckett, LLC.

Marshalling Assets And Paying The Fiduciary

Once the personal representative has been appointed or a trusteeship is filled, the fiduciary can begin to marshal assets. This is a process of learning what assets are included in the fiduciary estate and retitling those assets into the name of the fiduciary estate. For example, a personal representative may need to retitle a brokerage account from the name of the decedent to the estate.

For the probate estate, the Register of Wills office or the Orphans' Court monitors this process by requiring the personal representative to file an inventory of assets and accountings of estate financial activity. The personal representative is charged with establishing the value of all assets and with paying all lawful debts. Additionally, the personal representative must file information about assets passing outside of the formal probate estate (for example, property transferring by joint tenants or property titled to the revocable trust). One purpose of this reporting is to insure inheritance taxes are properly collected.

The trustee for a revocable trust is responsible for the property under his or her control. Even though the formal oversight performed by the Register of Will or Orphans' Court does not apply to a trust, the trustee is still required to account for the value of the property and the trust's financial activity. In this vein, the Maryland Trust Act governs the duties of the trustee and the rights of the trust beneficiaries.

A fiduciary generally has a duty to satisfy the debts enforceable against a fiduciary estate. Under the probate system, creditors of the decedent have 6 months from the decedent's date of death to file a claim against the probate estate. Secured creditors, however, may rely on the mortgage or other security instrument for payment. A secured creditor who fails to file a claim against the probate estate will forfeit their right to collect from the general assets of the estate if the security is insufficient to cover the debt. In the first years after the financial crash of 2008, many secured creditors discovered that their security interest was insufficient to cover the debt and they failed to file a timely claim against an estate. Thus, they incurred a loss on the loan. It is now common practice for secured creditors to file a protective claim.

The process of filing a claim against a revocable trust is more complex then filing a claim against a probate estate. The Maryland Trust Act states that if a regular probate estate is filed, then a creditor has 6 months to file a claim against the probate estate, and the Maryland Trust Act makes clear that the assets in the revocable trust may be reached by probate creditors to satisfy unpaid claims. If no regular estate is opened, however, a trustee may shorten the statute of limitations by running a notice in the appropriate newspaper. Otherwise the Maryland Trust Act suggests that a longer statute of limitations applies.

Tax Obligations In Maryland

A fiduciary estate is generally subject to several different taxes, including the Maryland inheritance tax, the Maryland estate tax, the federal estate tax and the Maryland and federal income taxes. A governing document generally dictates how these taxes are paid.

If the estate is large enough to be taxable for federal tax purposes, the personal representative files a federal tax return and makes arrangements for the payment of whatever tax is due. This tax return is due nine months from the date of death. This would also apply to the federal estate tax.

If the estate assets earn interest or other income during the period of administration, a federal income tax return and a Maryland income tax return for the fiduciary estate is likely required. The personal representative is also responsible to file the decedent's last personal income tax return.

A Maryland Estate Administration Attorney Will Help Guide You Through the Process

This is a brief overview of the Maryland estate administration process. It is not meant to be comprehensive, but a simple roadmap as to what can be expected in the process. Because the administration of an estate can be so complex and detail oriented, you will likely have specific questions and concerns.

For over 35 years, the law firm of Franke, Sessions & Beckett, LLC has concentrated on the law of estates and trusts - including helping hundreds of clients with estate and trust administration. Often this means winding up a decedent's financial affairs and implementing the plan contained in the will or trust. Sometimes a decedent dies without an estate plan in place so the estate needs to be settled in accordance with the intestacy rules set out by state law. We prepare estate and trust federal and Maryland tax returns in-house so we can offer seamless administration services from beginning to end. Our Maryland estate administration attorneys and staff have the experience, training and knowledge to guide clients through the process to ensure that Maryland estates and trusts are administered properly. In order to schedule a consultation, call 410-263-4876 to get in touch with our Annapolis office.

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Estate & Trust Administration Attorney | Annapolis, MD

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When a person dies, her/his financial affairs need to be settled and the property distributed to the heirs. Although this process may sound straightforward, even easy, it is not. Estate & Trust Administration is the process of settling the estate of a decedent.

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Estate & Trust Litigation is a catch-all designation for civil lawsuits related to estates and trusts, powers of attorney, account designations, and guardianships.

The predominant theme running through all fiduciary litigation is the right we all enjoy to manage our assets and to transfer those assets by gift or at our death as we wish. Part of that important property right is that we are not pressured into making dispositions of assets by someone taking advantage of us.

Estate and trust litigation may be arguments over a Will or trust where undue influence by a trusted family member or someone in a confidential relationship is alleged.

Other fiduciary litigation relates to alleged abuse by an agent acting under a power of attorney or when account designations are changed benefitting a person who may have pressured the account holder to act.

Elder financial abuse is one aspect of fiduciary litigation. It may require establishing a guardianship to prevent, and perhaps rectify, transactions injuring a person who has diminished ability to protect himself/herself.

Court-Ordered Estates & Trusts Mediation In Maryland

Modern litigation is characterized by court ordered mediation. For skilled trial lawyers, court ordered mediation is a litigation tool that can be helpful in reaching a successful result.
What Is Court-Ordered Mediation?
Mediation, of course, is a voluntary, non-binding process of conflict resolution. Once a law suit is filed, Maryland courts may order the parties to attend and participate in mediation to try to resolve the dispute before setting the matter in for trial. Although the parties are ordered to attend mediation so their participation is no longer voluntary, agreeing to a resolution of the dispute at mediation remains voluntary. This is different than arbitration which is sometimes mandated by a commercial contract (commonly in brokerage agreements for example) where an arbitrator acts like a judge and orders the resolution. In mediation, a mediator does not have judge-like powers to compel a resolution of the dispute.
Maryland Circuit And Orphans' Court Mediation
As with other litigation, estate and trust litigants in Maryland Circuit Court cases have been ordered to mediation, often as a "last-ditch" effort to resolve all or part of a case before it is tried. Cases before a Maryland Orphans' Court, however, usually did not get sent to court ordered mediation. As of July 2018, the Maryland Rules authorized the Orphans' Court to order parties to mediation in order to try settle disputes.

Expanding the Maryland Rules to authorize the Orphans' Courts to compel mediation cures an unfortunate procedural mismatch between Circuit Court and Orphans Court practice. Although expanding the Orphans' Court authority is a relatively new development, mediation is an old concept in Maryland Circuit Court cases and accordingly is a familiar process for Maryland estate and trust trial lawyers. Because the Maryland Circuit Courts have broad, general jurisdiction and the Orphans' Courts have narrow, but specific original jurisdiction, fiduciary litigation often straddles both courts. The Orphans 'Court, for example, does not have jurisdiction over trusts, even trusts created by a will, so all litigation concerning trusts begins in the Circuit Court.
Multi-Court Proceeding In Maryland Estate/Trust Litigation
Many Will contests, which originate in the Orphans' Court, are often related to disputes over joint accounts or pay on death beneficiary designations favoring the same person who was benefitting from the challenged Will. Disputes over joint or pay on death accounts or other non-probate property are litigated in the Circuit Courts, not the Orphans' Courts. Therefore, Maryland estate and trust litigation often features proceedings before the Maryland Orphan's Court (where mediation was not historically used) with parallel proceedings in the Maryland Circuit Court where mediation has been court-ordered for decades. Any seasoned Maryland estate and Trust litigation attorney should have been involved in mediation at the Circuit Court level.

"The new Orphans' Court mediation rules probably will not greatly impact trial practice where a case is proceeding in both the Circuit Court and the Orphans' Court. Because the Circuit Court would routinely order mediation for its part of the dispute, in reality all issues would be addressed in mediation and, if resolved, would result in a global settlement. Where the new rules will alter trial practice is where there is only an Orphans' Court proceeding," says Jack Beckett, a principal of the Maryland estates and trusts law firm of Franke, Sessions & Beckett, LLC.

Mediation Had Its Roots In Divorce Law & It Shows

Court ordered mediation originated as an element of divorce or family law practice. Its popularity was a product of the "no-fault" divorce legislation. The no-fault rules shifted the focus from determining who was at fault for the breakup of the marriage to a forward-looking focus on property division. For this reason, mediation is quite successful as an alternative method of settling family law issues. It encourages the parties to draft a solution rather than to roll the dice in a court proceeding where there will not the bright line of causation tipping the scale.
Probate & Trust Disputes Are Different
Some probate disputes may arguably be similar to the no-fault divorce pattern in that the past event is not determinative of the outcome. Such issues as the fairness or reasonableness of commissions and/or attorney's fees could be analogized to that of no-fault divorce given that the right to some commission/fees are by statute and the argument generally resolves around the amount only. Occasionally an estate administration goes off track, not because of something legally actionable, but merely due to long-standing intra-family distrust. This situation calls for a forward-looking focus like that in family law cases.

Most estates and trusts issues, however, are "backward-looking"-for example, establishing the facts and circumstances surrounding the execution of a Will or retitling of property. These cases are inextricably connected with the concept of "fault." Will contests often involve whether undue influence has been imposed upon the testator, whether the testator is legally incompetent or whether fraud was perpetrated on him or her. Judicial resolution of these disputes dictate a backward looking inquiry to apply established rules to a set pattern of facts. This is very different than the no-fault divorce law where mediation originated.

Two Types of Mediation: Which Is Right for Maryland Estate Litigation?

The basic type of mediation used in the divorce setting is facilitative mediation. That is a process of negotiation where the mediator is a neutral third-party who focuses on and controls the process but not the outcome. This approach to mediation generally pushes toward total reconciliation of the disputed parties in order to repair relationships. This approach to mediation, of course, is critical in divorces where children are involved. It is possible only if a determination of fault is not an element of the mediation process.

The other approach to mediation is evaluative mediation. The evaluative mediation is conducted by a mediator who is an expert in the field and who evaluates the respective parties' likelihood of success in litigation. This type of mediation is geared towards getting the parties to realize the strengths and weaknesses of their case if it went to trial. This is the type of mediation that is more likely to be successful in estate and trust disputes.

"Even with court-ordered mediation, often the lawyers have wide latitude in picking the mediator. While many estate litigators focus on identifying the person who they want as mediator, the first consideration ought to be which type of mediation would best facilitate a resolution, then pick a person with the requisite skills. I have heard lawyers say they don't like a retired judge to mediate because they always come at it by evaluating the strengths and weakness of the case, Sometimes that is exactly what is needed so the mediation is not a waste of everyone's time," says Fred Franke, a principal of the Maryland estates and trusts law firm of Franke, Sessions & Beckett, LLC.

The Role Of The Maryland Estate Litigation Attorney

The estates and trusts litigator has the role of communicating the client's legal position and the weaknesses of the opponent's position at the mediation. This generally means that some discovery would be needed before mediation is likely to be successful. It also means that if the case does not settle in mediation, one must be careful not to give the other party too much of a tactical insight into how the case will be tried. This involves a balancing act: trying to be candid on the one hand, yet holding back information on the other hand, in the event the matter goes to trial.

Often mediators will permit each lawyer to present a truncated "opening statement" at the outset of the mediation. The purpose of this is twofold: (1) to set a framework for the mediator to reach a favorable evaluation, and (2) to present to the other litigants, unfiltered through their counsel, the strengths of a client's case.

Establishing the opening position, however, is only the beginning step in the estates and trusts lawyer's role at mediation. Once the lawyer establishes the strengths of the legal case, the lawyer needs to work to facilitate an agreed upon resolution. Especially with some clients, the lawyer must explain why he/she will pivot from that of an advocate to a negotiator mid-stream in the process.

Because the use of mediation in an estates and trusts dispute is quite different than how mediation is used in family law or other types of litigation, a Maryland estate litigation attorney who is well-versed in the substantive law of estates and trusts as opposed to a generalist may have a leg up in the process.

The attorneys at Franke, Sessions and Beckett LLC understand the process involved in estate and trust litigation and are prepared to handle your case. For over 35 years, the law firm of Franke, Sessions & Beckett, LLC has concentrated on the law of estates and trusts - including a wide variety of fiduciary litigation. We handle disputes over the meaning of estate planning documents, arguments involving personal representatives or trustees, challenges to documents based on a lack of capacity or undue influence. On a regular basis, we try cases before the Orphans' Courts and the Circuit Courts of various Maryland counties. We also take appeals to the Court of Special Appeals and the Maryland Court of Appeals. We are not, however, a general litigation firm. We focus on Will, Trust, and other fiduciary litigation. We have deep experience in and knowledge of the Maryland law of estates and trusts, concentrating as a firm on fiduciary litigation, planning and administration. In order to schedule a consultation with an experienced estates and trusts trial lawyer, call 410-263-4876 to get in touch with our Annapolis office.

Two of the Most Common Estate Litigation Questions Our Attorneys Face

1) What are the Grounds for Contesting a Will in Maryland?

The Will must meet certain basic "formalities" to be valid. If it fails to meet one or more of the basic requirements the Will fails. It must be in writing, signed by the testator and witnessed by two individuals. The witnesses must sign in the presence of the testator.

The testator must have testamentary capacity. This is a low bar: the testator must know the nature and scope of his assets, must know the "natural objects of his bounty" and must know how the Will connects those possessions with those he wants to benefit.

If the Will is a product of undue influence it fails. This is when someone forces the testator to make a Will in a certain way rather than the testator deciding of his own volition what to provide in the Will.

The Will cannot be the product of an insane delusion. The ancient case establishing this ground to set aside a Will was when the testator failed to leave any property to his ward because he was convinced that she was the spawn of Satan.

A Will that was created because of a fraud perpetrated on the testator will fail. For example, if a document is handed to the testator by someone who tricks the testator to believe it is not a Will but another document, the Will is invalid.

2) How Important is Undue Influence in Will Contests or Caveat Cases in Maryland?

What is undue influence?

Maryland developed a common law definition of undue influence. Undue influence is when someone takes advantage of another person and gets that person to make a will or trust in a way that they otherwise would not do. Usually the end result is to benefit the influencer.

What are examples of undue influence?

Perhaps the "classic" example is when a caregiver hired by an elderly person ingratiates himself or herself into the senior's life with the result that the caregiver ends up with a sizable bequest in a will. Unfortunately, however, it often is one child manipulating a parent to benefit him or her instead of leaving the estate to all the children equally.

What 7 facts tend to show undue influence according to Maryland courts?

The Maryland Court of Appeals has recognized at least 7 elements that might show undue influence: (1) a "confidential relationship", (2) a substantial benefit to the alleged influencer, (3) the alleged influencer assisted in effectuating the will execution, (4) the opportunity to exert influence, (5) the will contains an "unnatural" disposition, (6) the will is different than earlier wills, and (7) the person making the will was highly susceptible to undue influence.

Are all 7 facts to prove undue influence equally important?

No. Although every fact tending to prove undue influence adds to a case, the two most important facts in Maryland will contests to show undue influence are (i) whether the testator and alleged influencer are involved in a confidential relationship and (ii) whether the testator was highly susceptible to undue influence.

What is a "confidential relationship" and how does one prove it in undue influence cases?

A confidential relationship often is either where one party is under the dominion and control of another, or where, under the circumstances, such party is justified in assuming that the other will not act inconsistent with his or her welfare. The hallmarks of the first kind of relationship is a degree of coercion. One key to the second kind of relationship is reliance and trust. Some relationships are deemed confidential: attorney/client, trustee/beneficiary or anent acting under a power of attorney/principal but otherwise the existence of the relationship must be proven by (often circumstantial) evidence.

How do you prove a person is highly susceptible to undue influence?

Susceptibility to undue influence is a question of fact. Diminished capacity is one marker. The analysis of medical records by geriatric psychiatrists or others who can give expert testimony on capacity generally useful. Also lay witnesses to other indicators can be helpful - such as whether the alleged influencer isolated the testator, what such witnesses observed as to how the alleged influencer treated the testator and the degree that the testator relied on the alleged influencer. Although the Maryland courts have largely distilled the important factors to only 2 of the 7 factors, the remaining 5 factors give a roadmap to the type of collateral evidence that is useful in undue influence cases.

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Fiduciary Litigation | Estate Planning Lawyers | Annapolis, MD

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Estate & Trust Litigation is a catch-all designation for civil lawsuits related to estates and trusts, powers of attorney, account designations, and guardianships. The predominant theme running through all fiduciary litigation is the right we all enjoy to manage our assets and to transfer those assets by gift or at our death as we wish.