New laws have been passed in the Maryland General Assembly in the 2019 session which affect estate planning. Let’s briefly recap each and what they mean for you.
SB192: Elective Share of Surviving Spouse
This law was passed to broaden the ability of the surviving spouse to inherit from a decedent spouse who was attempting to thwart the rights of the survivor. Previously the decedent spouse could plan in such a way that the survivor would not be able to receive assets that didn’t pass under the Last Will and Testament, for example, those held in a revocable trust, jointly held property with a third party and life insurance. The survivor was only able to claim 33.33 % of the probate estate (that is assets passed under a Last Will and Testament). Now the surviving spouse will gain access to funds that the decedent previously was able to leave to someone else.
Instead of settling for only the property left to them in the deceased spouse’s Will, the surviving spouse can choose, or elect, to take one-third of the entire net estate (33.33%, or 50% if there are no descendants). It is possible, and in many cases, probable, that one-third of the total net estate, including assets left via beneficiary designation, is greater than specific property that may have been left to the spouse under the Will.
However, the bill also allows that the elective share of ” a surviving spouse may be waived before or after marriage by 29a written contract, agreement, or waiver signed by the party waiving the right of election.” Thus, if a married couple decides that they would rather not take the elective share, they may preplan to waive the elective share in a pre-nuptial or other written, legal agreement. For example, if this is a second marriage and there are children from a first marriage the couple would prefer to leave their estate to, they can come to a mutual agreement to waive the elective share.
SB212: Execution of Wills Outside of State
This bill mainly concerns the growing number of online services offering wills, powers of attorney, and trust documents. Using one of those services can be risky and may mean that your estate planning documents were created out-of-state. Thus, the way the documents were signed may not comply with and be recognized under Maryland Law.
The General Assembly passed a bill this year that provides guidance on how to handle wills created outside of Maryland. As the online estate planning industry continues to grow, we can probably expect more legislation around the issue.
Read the full text of the bill here: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=sb0212&stab=01&pid=billpage&tab=subject3&ys=2019RS
SB317: Share of Intestate Estate Inherited By Spouse
This bill changes the amount a surviving spouse can inherit from an intestate estate. Reminder that an intestate estate is one in which the deceased person did not leave a will or trust, and so the estate is distributed according to the state laws.
Under the current law, a surviving spouse received $40,000 plus half of the remainder. The decedent’s parents would then inherit the remaining half, but only if the couple had no children.
Under the new law, the parents’ share would be determined by how long the decedent and the surviving spouse had been married. If the marriage was shorter than five years, the share provided under the old law stands: half of the remainder after the spouse’s share. If the marriage was longer than five years, the surviving spouse now inherits the entire estate. Again, this only applies if there are no children. If there are children, the spouse and the children share the estate according to existing Maryland law.
Read the full text of the bill here: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=sb0317&stab=01&pid=billpage&tab=subject3&ys=2019RS