Newsletter Mary Alice Smolarek, Editor Cristin C
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msba section of estate and trust John P. Edgar, Chair Richard T. Wright, Chair-Elect Newsletter Mary Alice Smolarek, Editor Cristin C. Lambros, Secretary Aryeh Guttenberg, Editor Winter 2008 Vol. 18 No. 1 Notes From The Chair John P. Edgar, Esq. he Section of Estate and Trust (5) enact rules governing powers of islative agenda in 2010 or later years. TLaw is one of the largest and attorney based on the Uniform Power most active sections in the MSBA. of Attorney Act, (6) allow the use of Another very important activity of the The 1,495 members of the section in- a settlement statement in certain situ- Section Council is to meet three times dicate how many Maryland attorneys ations to establish the value of real each year with representatives of the are interested in this fascinating and property for probate and inheritance Orphans’ Courts, Registers of Wills, rewarding area of law. The Section tax purposes, (7) specifi cally autho- Maryland Attorney General, and Rules Council, consisting of 14 members rize personal representatives and other Committee to discuss current issues. and 3 offi cers from around the state, fi duciaries to become limited partners These meetings often are a source of meets monthly to coordinate the ac- and members in limited liability com- ideas for new legislation and a way to tivities of the section. As Chair of panies, (8) clarify the effect of divorce keep all the participants informed of the Section Council, I welcome ques- on the Will of a divorced person, and their respective legislative goals. The tions, suggestions, input, involvement, (9) add a cross-reference to existing meetings also provide a forum to dis- and even constructive criticism from Criminal Law section 8-801, which cuss procedures, rules and court deci- all section members. We are here to prohibits estate distributions to per- sions affecting our practice area. serve your interests and meet your sons convicted of abusing vulnerable needs, and we are always looking for adults. This is an ambitious agenda, Continuing legal education is anoth- ways to do better! but we hope the General Assembly er important mission of the Section. will support our efforts in the coming The Section Council works closely The Section Council usually spends legislative session. with MICPEL to plan programs, de- much of its time discussing ways to sign curricula, and provide speakers improve Maryland law. This year, Two longer-term legislative projects and other assistance as needed. The it approved a legislative agenda of 9 are also worth noting. The Section Section Council also arranges for pro- items. The agenda includes bills that Council has studied the Uniform Trust grams at the Section’s annual dinner would: (1) enact a procedure to autho- Code for several years to determine if meeting, held in May, as well as the rize the Orphans’ Court to allow the it would be desirable in Maryland. We MSBA Annual Meeting in June. admission of a photocopy of an origi- are currently working with a commit- nal executed will to administrative tee from the Maryland Bankers Asso- These are just a few activities of the probate, (2) allow limited use of attor- ciation to get their input on the UTC. Section Council. I could go on de- ney’s trust accounts for estate funds, Second, a Section Council committee scribing our other efforts, such as this (3) increase the jurisdictional limit for is studying the elective share statute, newsletter and our website. But there Orphans’ Court determination of title along with similar statutes from across is always room for more. Again, I to personal property to $50,000, (4) the nation, to see if this important area welcome your ideas on ways to im- allow Maryland estate tax returns to of law can be improved. Both these prove the law, and the practice of law, be fi led directly with the Comptroller, efforts may result in items on the leg- of estates and trusts in Maryland. ESTATE PLANNING FOR PETS Lauren D. Burger Krauthamer, Esq. Pasternak & Fidis, P.C. wo out of three American households own a pet. In tablish such trusts for the benefi t of their pet, both during T2008 Americans will spend an estimated $43 billion on the life of the owner and after death. Therefore, in D.C. their pets. Pets have become more than just companions; and Virginia, pet trusts are legally enforceable. Maryland, they have become family members. We pamper them and however, has not yet adopted such a law. A pet trust, if es- bring them wherever we go. What we do for pets today has tablished in Maryland, is merely an “honorary trust.” In this expanded far beyond simply feeding them old fashioned pet situation the decedent must rely on the trustee to honor the food and providing shelter. Not only are entire aisles of terms of a trust for the benefi t of the pet for the lifetime of food stores dedicated to pet food and other products, spe- the pet; the terms are not enforceable in court. cialty stores have cropped up offering faux mink coats for dogs, ultra gourmet food, and even massages. Seeing pets Although a pet trust sounds like a great idea, clients should being wheeled around in strollers is no longer a particularly be warned of their downside. Maintaining a trust, as with unusual sight. However, pet owners may not have asked non-pet trusts, involves administrative costs. If the trust has themselves who will care for their pet when they are un- any taxable income for the tax year, the trust will need to able to do so. Unlike our two-legged family members, our fi le an income tax return. In addition, if the client does not animal friends are unable to care for themselves for even a have a family member or a friend willing to administer a brief absence. Therefore, pet owners need to make plans for trust, it might be diffi cult to fi nd a corporate trustee, such as their pets in the event of death or disability. a bank, to administer the trust because the value of the trust assets is likely to be less than a corporate trustee is willing Planning for Death to handle. The law generally treats pets as tangible personal property, despite the fact that many pet owners think of their pets as a Depending upon the amount of assets a client wants to set part of the family. Therefore, if a pet owner does not make aside for a pet, there are other alternatives to establishing a a specifi c bequest of a pet in his or her will, the pet will trust. For example, you could recommend to the client that be distributed to the recipient of the late owner’s tangible he or she make a bequest of a certain amount of money to personal property. But what if the recipient of the tangible the person whom they designate to care for their pet. Al- personal property does not want to care for the pet? The pet ternatively, the client could request that the personal rep- could be sent to an animal shelter, with the animal’s future resentative of his or her estate or the trustee of his or her determined by a stranger. Therefore, estate planners should revocable living trust designate a caretaker for the pet and advise clients to have a plan for their pet in the event that the distribute a certain sum of money to that caretaker. client predeceases their pet. Planning for Disability Pet Trusts and Other Arrangements Not only must pet owners consider what will happen to their A trust established for the benefi t of a pet typically des- pets upon their death, they also need to consider what will ignates a caretaker of the pet and a trustee and is funded happen in the event of an emergency, such as the pet owner with assets to care for the pet. The trustee need not be the being hospitalized, even for a short period of time. There- caretaker. The trust typically provides that the trustee will fore, pet owners should be advised to carry a note in their have the discretion to make distributions to reimburse the wallets indicating that they have a pet, what type of pet it is, caretaker for costs associated with caring for the pet. Al- and who should be contacted in the case of an emergency. ternatively, the trustee may directly reimburse those who The client should make the emergency contact aware of any provide services for the pet, such as the veterinarian. special medical conditions the pet has or specifi c instruc- tions to be followed if an emergency arises. The client can The majority of trusts established for pets are done so under accomplish this by providing the emergency contact with the pet owner’s testamentary document, such as a will or a a brief letter or telling them where they can fi nd written revocable living trust. Some individuals will go so far as instructions in the client’s home. The client should be sure to create a trust for the benefi t of a pet during the owner’s to give the emergency contact access to their home by either lifetime. Many jurisdictions, including the District of Co- lumbia and Virginia, have laws that allow individuals to es- (continued on page 5) 2 MARYLAND LAW DEVELOPMENTS Charles S. Abell, Esq. L. Laurel Lea, Esq. Furey, Doolan & Abell, LLP CASELAW DEVELOPMENTS a fraud on her marital rights, and claimed a right to elect Maryland Elective Share against those assets.