It’s been said, “if you simply hang around long enough you will likely see it all.” This seems to be the case with one new law that was recently passed by the Maryland Legislature, the new elective share law (House Bill 99; Senate Bill 192), otherwise known among lawyers as the “augmented estate” or “new elective share” legislation. This legislation “hung around” for the past several years and finally will became law (effective October 2020). Here is a brief history.
Under present (still currently existing) Maryland law, a surviving spouse was entitled to elect against the will of his or her deceased spouse to receive one-third (1/3) if there was surviving issue of the decedent, or one-half (1/2) if there were no surviving issue of the decedent, of the “net estate” – basically the net amount of the probate estate. This meant that a spouse with bad intentions could disinherit the surviving spouse by dramatically limiting what property and /or assets passed through the probate estate. The surviving spouse could only exercise a right of election over the limited statutory amount of the net probate assets. Unfortunately for the aggrieved spouse, this also meant that he or she (likely she) had no right of election over assets owned by the deceased spouse that passed outside of probate (passed via non-probate transfer) such as joint accounts, transfer on death designations (TOD), payable on death designations (POD), beneficiary designations (IRAs, Qualified Plans, and life insurance), and real property passing by non-probate trnsfers. As a result, a spouse with such intentions could disinherit a surviving spouse.
Beginning in 1990 and through 2008, two cases Knell v. Price, 318 MD. 501; 569 A.2d 636 (1990), and Karsenty v. Schoukroun, 406 MD 469; 959 A.2d 1148 (2008) changed the status quo, but did not move the needle enough to give a surviving spouse meaningful rights to non-probate property to which they were arguably entitled. Although a full analysis of these cases is beyond the scope of this squib these stand for the proposition that a surviving spouse is entitled to an elective share over an estate broader than the probate estate – an augmented estate that includes not only the traditional net probate estate, but also the non-probate assets of the decedent spouse. These cases, especially Karsenty established certain tests, approaches, and factors by which a court could determine whether the nonprobate assets of the decedent would be subject to the elective share of the surviving spouse. Although these cases represented progress, an aggrieved surviving spouse nonetheless remained in a situation of great legal uncertainty and disadvantage, considering that more likely than not she would have to engage in costly and protracted litigation to prevail on the issue of electing against the augmented estate of the deceased spouse.
With the passage of the new elective share law, the Registers of Wills and the Courts will take a formulaic approach designed to bring sensibility and fairness to this complex issue, for both spousal and non-spousal beneficiaries. This will most likely be a difficult and arduous process for all parties involved, especially after implementation in 2020. Since most traditional couples – couples where the union was a first marriage and children from that first marriage exist – leave assets for the benefit of the surviving spouse (a second spouse).It seems to me two main categories of surviving spouses will be impacted the most, are (1) the second (or more) marriage surviving spouse with or without children of their own; and (2) the disabled surviving spouse.
The surviving spouse in a second, third, or more marriage who has been disinherited by their deceased spouse, usually because he or she has children of their own or other relatives to whom they intend to leave assets at their death (the death of the first spouse to die), will be impacted by the new law. Furthermore, it is important to note more impact will inure to the deceased spouse and his or her children because of the new law. The reason is simple – under the new elective share law, where an uninformed spouse in a second or more marriage who with or without the mutual agreement of their spouse leaves assets to their children or other relatives, (a very common occurrence), the surviving spouse may thwart the estate plan of the deceased spouse by electing against the probate and non-probate assets of the decedent. These results may be legally avoided through the use of pre-nuptial or post-nuptial agreements which specify the waiver of the surviving spouse’s right to a spousal elective share.
Spouses who die leaving a disabled spouse will fare better, and the new elective share law allows for the placement of the surviving spouse’s elective share amount into a testamentary special needs trust (a common practice among elder law attorneys) without exposing that statutory elective share amount to the claims of Medical Assistance. This carve-out exception means that elder care planning for spouses where one spouse has an impairment or other disability can continue unabated – a happy result for the benefit of couples who wish to be proactive under circumstances where choices otherwise seem very limited and where long-term care costs continue to devastate family finances.
In summary, the new elective share law which had previously confounded lawmakers, the Registers of Wills, and others for several years is now the law in Maryland effective next fall (fall 2020). Those persons who plan to disinherit their spouses for bad-intentioned purposes (likely very few), or remarried spouses who plan to leave assets to their children from a prior marriage should they be the first spouse to die (in the new marriage), should take notice of this new game-changing law. Pre-nuptial and post-nuptial agreements, already important asset protection planning tools in and of themselves, now take center stage as a first and preeminent step in estate planning for many couples, and an important point of client education for all.
MLF last edited 02/2021
Under current regulations, the Department of the U.S State allows citizens to have two valid and separate duplicate passports. A few reasons to hold a duplicate passport are:
- Americans commonly get the passports stolen or lose them go aboard. You can request emergency passports as a replacement, but it is not easy and may be expensive. Emergencies rarely occur at a convenient places or times. An emergency passport will only be good if you have to enter your own country. This means you may have to obtain another passport before or in midst of an international trip, in case a passport is necessary for the destination.
- Having a duplicate passport will allow you to continue your travel plans without changes. If the passport is lost or stolen, report this to the United States State Department and local authorities, so that you can continue on your journey. An essential benefit of a duplicate passport is the emotional security knowing a duplicate passport available in case of an emergency.
- Few countries will ask you for travel insurance and a visa before you enter their country. A few countries have stricter requirements, like Russia. If you are planning a second international trip with countries like these or are in a process of applying for another country, then you can be a passport short.
- Passports are stamped when you enter a country. At times, the stamps volume and visas on a passport are problematic in entering a country. If you travel to the Middle East, then having specific stamps on your passport can create difficulties for you.
If you think that a duplicate passport is not appropriate for your circumstances, then there are two alternatives that you can consider and they can be a good substitute for your passport. On the basis of your travel plans, a passport card or trusted traveler card may be helpful. Each of these can be obtained for less than the cost of a passport and eacg has many uses. Although a duplicate passport in my view is the better choice.a
Always Before Traveling, — double-check the warnings by the US State Department.
Although they may not receive legal recognition, it is recommended to prepare properly before traveling by making and taking with you a medical power of attorney, power of attorney and a medical directive with your wishes for your medical treatment. Take originals with you!
Michael Freilich, Esq
A power of attorney is a legal document that permits a person to delegate another person or entity to act on his or her interests to manage their affairs. The person who forms the power of attorney is recognized as the principal and the person given the authority over the affairs is the attorney-in-fact. A power of attorney is in force only if the principal is alive, and only a principal who is mentally fit can authorize it.
A power of attorney and a Will should be part of everyone’s estate planning documents. There are many kinds of powers of attorney as well as many reasons to put one in place. You never know when the urgency may arise, and a power of attorney will be needed so some kinds of powers of attorney are a good idea to implement now. On the other hand, other types of powers of attorney may only be required if a certain state arises.
Many people think that as long as they have selected a durable power of attorney, they lose the authority over any decision-making and how their assets are managed. This is simply not the case and the power of attorney only takes over if you are no longer mentally competent enough to run your personal, legal, and financial affairs.
A power of attorney form can be used to choose a power of attorney to represent a person and their affairs in various areas if they ever become incapacitated.
Roles of a Power of Attorney
- Making decisions on the behalf of someone who has lost their mental capacity
- Making medical decisions
- Handling financial and legal matters
Even though a power of attorney is still an important tool for handling the estate and affairs of incapacitated loved ones, it has become more than just that. It has also developed into a useful tool that enables individuals to give authorization to professionals with specialized skills. These professionals can serve and represent them in business, legal, and financial spheres that require a piece of particular knowledge and skill set that the individual might not have. This enables people to level the playing field when it comes to engaging with larger organizations that have paid professional staff committed to acting on their behalf.
How to Create a Power of Attorney
If you would like to establish a power of attorney call Freilich Law. Michael Freilich has been writing the primary documents of estate planning for over 40 years. These include wills, trusts, living wills, living trusts, dying declarations, gifting, medical powers of attorney, financial powers of attorney, animal trusts and more. Call for a consultation to (410) 321-0040.
While most of us are quarantined at home during the coronavirus stay-at-home order it would be a good time to catch up on some task he might otherwise not have done. I on this list for me and for my recommendations to my clients and friends is the preparation of a good inventory. What I have found to be very effective method of inventory taking is a digital camera, even the camera on a smart phone.
Start on the lowest level for the highest level of your living space. In our case it was a basement. Go around the room and take photographs of each room to show furniture, knickknacks, and everything which is in it. Next open each drawer or door in the room and photographed the contents. It’s important to be able to see in each picture all the contents of the drawer or the closet. Then take a picture of how this level of the building is connected to the next. So for example photograph of the steps leading from the lowest level to the next level. Repeat this procedure for each floor of the house. Then take pictures of the inside of the attic whatever you have as the highest space in your home.
Next step is to go outside your house and photograph the exterior all the way around the house. Then photograph the yard. Try to get the back alley, or the street. Also photograph from outside of your home to your neighbors on all boundaries. If you have a garage, take photographs of the interior including the contents.
When you finish you should have a complete photographic inventory of the inside and outside of your home.
Go back and double check you have the contents of your drawer’s, especially those in which you have valuable items or collections. For example, if you have a clean collection, be sure to photograph all of the items in your coin collection so that an expert coming long after you could see enough detail to evaluate those coins. This is also true for your jewelry. Try to get close enough to the details show. There are many DIY’s on the Internet on how to make a simple structure to photograph glossy surfaces so that the details are easily visible.
Now you have this inventory, what you do with it? Make several copies and disburse them. Do not keep all copies and your home. Perhaps, one should go in your safety deposit box at the bank. Perhaps, one with a trusted relative. Perhaps, one or 2 should be stored in different cloud storage areas.
Why should you have an inventory? In the event of damage, storm, natural catastrophe, theft, flood, virtually any disaster in which you may need to prove what you owned, how you owned it, and so forth. If you have an insurance covered loss, you will need to establish that you had the object or the repair and what it is worth. These photographs of the first steps towards providing evidence of both.
What I like about using this method of photographing with a smart phone is that it is easy, it is quick, and you do not have to spend the time writing down all the information. However, there are some guidelines. So for example suppose you take images of your computer equipment, include model number and serial number.
Remember to take images of the artwork and photographs on your walls. Be sure to take images of your books sufficiently close of the titles are visible. If they are valuable books, take the fly leaves as well. If you have objects art for which you have certificates of authenticity, take pictures of the object and exhibit of authenticity in the same frame if you can. If not, in adjoining frames.
And while you are thinking about this project, pull out your homeowners insurance policy and check the clauses relating to what losses are covered, how much is covered, and most importantly what you’re required to prove. With respect to personal property there are typically 3 types of coverage available depending upon what you purchased. “Actual cash value” is the actual cash value of the item which was lost. So for example in the had a sofa for which you paid $1000. And it’s now 2 years later, the insurance company would be obligated to reimburse you, depending upon the terms of the policy, the value of the sofa with 2 years of depreciation into which would also come into play the condition of the sofa. This is typically a battle of appraisers. The insurance companies appraisers and yours.
“Replacement cost” is another method of evaluation and ensuring your property. This typically refers to replacement for the value of the property itself. So for example, the Sofia purchased was $1000, it’s 2 years later, you are entitled to replacement of $1000.
Another common type of insurance is for “actual replacement cost.” This tends to be a combination of quote actual cash value” and “full replacement cost.” This tends to be you would receive the depreciated value, unless you actually replaced the object and in which case you would receive what the cost you to replace it. How the spells itself out in practice tends to differ from insurance carrier to insurance carrier, and is not always spelled out in the actual policy itself. There are other variations on the reimbursement policy. These are the more popular forms personal property insurance in Maryland.
There are certain items which are not covered by the normal insurance policy. These need to be scheduled on a valuable items policy. I recommend reviewing your inventory with a very knowledgeable property and casualty insurance agent and asking the agent’s advice as to what items, if any, should be scheduled.
So please consider spending a part of a day preparing your visual inventory.
PLEASE NOTE, THIS IS FOR A DUPLICATE PASSPORT, NOT FOR MULTIPLE PASSPORTS.
Under present regulations, the US State Department allows American citizens to hold at the same time two separate, valid duplicate passports. Here are some reasons to consider holding a duplicate passport.
1. It is not uncommon for Americans to either lose or have their passport stolen while they are abroad. Of course, it is possible to request a replacement emergency passport. This is no fun. The process can be difficult and expensive. Rarely do these emergencies occur at a convenient time or place. Usually an emergency passport is only good for reentry into your home country. So, barring all else, you will need to apply for a new passport prior to your next international travel, if your destination requires a passport.
So if you maintain a duplicate passport, you may not have to change your international travel plans while you are broad. Of course, if your passport is stolen you will still need to report it stolen or lost, both to the local authorities and to the United States State Department, if you were able to continue on your journey. If nothing else, this is a certain amount of emotional security that comes from knowing you have a duplicate passport immediately available.
2. Some countries require both visas and/or travel insurance prior to visitors entering their country. Some countries have even more stringent requirements, for example Russia. So, should you need to make a 2nd set of international travel plans or be in the process of these applications to another country, you may be one passport short.
3. Passports are typically stamped upon entering a country. Sometimes the sheer volume of stamps and visas in a passport invite additional problems and scrutiny in entering a country. Travel particularly in the Middle East with certain passport stamps can augur other difficulties. For example, a stamp from Israel may make it difficult to enter certain countries, at the time of this writing, for example the UAE, Algeria and others.
If under your circumstances a duplicate passport may not be appropriate, consider two alternatives, neither of which is a substitute for passport, but which may suffice depending on your travel plans. They are a Trusted Traveler Card or a passport card. Each typically involves lower fees than a passport and for the experienced traveler has a number of uses.
In addition, please always remember to check the US State Department warnings before foreign travel.
Though it may not be recognized, I always recommend traveling with a properly prepared power of attorney, a medical power of attorney, and a declaration relating to your wishes with respect to medical treatment and end of life treatment. To quote an old commercial, “don’t leave home without them.”
Why should I hire you? Over the years I’ve represented buyers and sellers of residential property, builders, contractors, subcontractors. suppliers, materialmen, surveyors, architects, title companies, realtors, and lenders of residential property, developers of shopping centers, malls, tenants in malls, tenants in freestanding stores, owners of freestanding stores, commercial buildings. Just about every aspect and occupation involved the real estate business, litigation in the secondary mortgage market. That’s where a lender packages his loans and sells them to another lender and then keeps a certain piece to do the servicing.
With this experience it tends to takes me at less time, I think, to go through a lot of these contracts than others. When I see a standard form contract, I recognize what it is and I can quickly see what the changes are from the standard form to the customize, and then I accomplish what I want by talking with the client, finding out what they really want, and explaining to them in everyday terms what the clauses of the contracts mean and how they affect them and what they should do in terms of countering it or accepting it and dealing with it. And I help them make the financial and legal decisions according to what they feel they need to do.