Maryland’s Elective Share Law plays a significant role in estate planning, particularly for married individuals. This law grants a surviving spouse the right to claim a portion of the deceased spouse’s estate, regardless of what the deceased’s will or trust may specify. Understanding how this law works and its implications is crucial when drafting or updating your estate plan. In this guide, we will explore the key aspects of Maryland’s Elective Share Law, how it can affect your estate plan, and what steps you can take to ensure your assets are distributed according to your wishes.

What is Maryland’s Elective Share Law?

The Elective Share Law in Maryland is designed to protect surviving spouses from being completely disinherited or left with little support after their spouse’s death. It allows a surviving spouse to claim a statutory portion of the decedent’s estate, even if the will or trust provides for a smaller share—or nothing at all.

The law applies whether or not the surviving spouse is named in the will. By claiming an elective share, the surviving spouse is entitled to a portion of the estate, overriding any provisions that might leave them with less than the law prescribes.

How Does Maryland’s Elective Share Work?

In Maryland, the elective share allows a surviving spouse to claim a percentage of the deceased spouse’s estate. The share depends on whether the deceased left behind children or other descendants:

• One-third of the estate if the deceased has surviving children or descendants.
• One-half of the estate if there are no surviving children or descendants.

The elective share applies to both probate and certain non-probate assets, a key point to keep in mind when planning your estate.

Augmented Estate: Expanding the Reach of Elective Share

Previously, Maryland’s Elective Share Law only applied to probate assets—those that must go through the probate court process, like bank accounts, real estate, and personal property. However, a recent change in Maryland law expanded the scope to include the augmented estate, which incorporates non-probate assets. These are assets that pass outside of probate, such as:

• Retirement accounts (IRAs, 401(k)s) with designated beneficiaries.
• Life insurance policies with named beneficiaries.
• Jointly owned property that transfers directly to the surviving owner.
• Revocable trusts created by the decedent.

This change prevents individuals from using non-probate assets to bypass the elective share, ensuring that a surviving spouse can claim their fair portion from a broader pool of assets.

Why Maryland’s Elective Share Law Matters for Your Estate Plan

When crafting an estate plan, the goal is often to distribute assets according to personal wishes while ensuring that loved ones are cared for. Maryland’s Elective Share Law can complicate this if you don’t account for your surviving spouse’s right to claim a statutory portion of your estate. If the elective share is not considered, it could disrupt your estate plan by:

• Forcing a reallocation of assets: If you leave significant assets to other beneficiaries, like children from a previous marriage or charities, your surviving spouse can still claim their elective share. This may require selling assets or redistributing wealth.
• Affecting inheritance for other beneficiaries: The elective share can reduce the inheritance left to other beneficiaries, especially if they were expecting a specific share of the estate.

How to Waive or Avoid the Elective Share

In some situations, spouses may agree to waive the right to the elective share through a prenuptial or postnuptial agreement. This is particularly common in second marriages where both spouses may want to leave assets to children from previous marriages or control the distribution of their assets more tightly.

For the waiver of the elective share to be valid in Maryland, it must meet certain criteria:

• Written and Signed Agreement: Both spouses must sign a written agreement waiving the right to the elective share.
• Full Disclosure: Both parties must fully disclose their financial circumstances before signing the agreement to ensure it is fair.
• Voluntary Agreement: Both spouses must enter into the agreement voluntarily, without coercion.

Waiving the elective share provides flexibility in estate planning and can help ensure that your assets are distributed according to your specific wishes.

How to Plan for Maryland’s Elective Share Law

If you want to protect your spouse while also preserving control over how your assets are distributed, there are several strategies you can use to mitigate the impact of Maryland’s Elective Share Law:

1. Provide Adequate Provisions for Your Spouse

One of the simplest ways to avoid issues related to the elective share is to ensure your spouse is adequately provided for in your will or trust. If the provisions meet or exceed what they would receive under the elective share, your spouse is less likely to make a claim.

2. Use Trusts to Control Asset Distribution

You can use trusts as part of your estate plan to control how and when your assets are distributed to beneficiaries. For example, a qualified terminable interest property (QTIP) trust allows you to provide income for your spouse during their lifetime, with the remaining assets passing to other beneficiaries (such as children) after your spouse’s death. This can help balance your spouse’s needs with your overall estate planning goals.

However, keep in mind that some types of trusts may still be subject to the elective share under Maryland’s augmented estate rules. It’s essential to work with a Maryland estate planning attorney to ensure your trust is structured appropriately.

3. Gifting Assets During Your Lifetime

Transferring assets to beneficiaries during your lifetime can be another way to reduce the impact of the elective share. Maryland does not have a gift tax, so you can gift assets to children, grandchildren, or other beneficiaries to reduce the size of your estate. However, federal gift tax rules still apply, so be sure to consult a tax professional before making large gifts.

4. Plan for Blended Families

For those with children from previous marriages or relationships, the elective share can be a particularly complex issue. You may want to ensure that your spouse is provided for without diminishing the inheritance left to your children. Trusts, prenuptial agreements, and other estate planning tools can help you strike the right balance and protect your family’s interests.

Timeframe for Elective Share Election

A surviving spouse must act within a specific period to claim their elective share. In Maryland, the surviving spouse has nine months from the date of death or six months from the probate of the will, whichever is later, to file their election with the court. Failing to meet this deadline will result in the spouse forfeiting their right to the elective share.

The Role of Estate Executors and Personal Representatives

The personal representative (executor) of an estate plays a critical role in managing the estate, paying off debts, and distributing assets to beneficiaries. If a surviving spouse claims their elective share, the personal representative must work with the court to ensure the correct portion of the estate is allocated to the spouse, which may include liquidating assets or revising distributions to other beneficiaries.

In Conclusion

Understanding Maryland’s Elective Share Law is critical to creating a comprehensive estate plan that meets your goals while protecting your spouse’s rights. Whether you are updating your will, creating a trust, or planning for a blended family, taking the time to address the elective share can prevent future conflicts and ensure that your assets are distributed according to your wishes. Working with an experienced estate planning attorney will help you navigate these complex issues and protect the legacy you wish to leave behind.

Contact Blackford & Flohr for Guidance on Maryland’s Elective Share Law

Maryland’s Elective Share Law can significantly impact your estate plan, especially if you have complex family dynamics or specific goals for asset distribution. At Blackford & Flohr, our experienced estate planning attorneys can help you navigate the legal intricacies of the elective share and ensure that your estate plan is crafted to meet your unique needs.

Contact us today to schedule a consultation and learn how we can assist with all your estate planning needs.