Recent Developments in Maryland's Intestate Succession Law
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University of Baltimore Law Forum Volume 13 Article 9 Number 1 Fall 1982 1982 Recent Developments in Maryland's Intestate Succession Law Follow this and additional works at: http://scholarworks.law.ubalt.edu/lf Part of the Law Commons Recommended Citation (1982) "Recent Developments in Maryland's Intestate Succession Law," University of Baltimore Law Forum: Vol. 13: No. 1, Article 9. Available at: http://scholarworks.law.ubalt.edu/lf/vol13/iss1/9 This Article is brought to you for free and open access by ScholarWorks@University of Baltimore School of Law. It has been accepted for inclusion in University of Baltimore Law Forum by an authorized administrator of ScholarWorks@University of Baltimore School of Law. For more information, please contact [email protected]. FORUM In so doing, the court indulged in Additionally, to best effectuate the a lengthy review of the statutory imposition of its holding, the court Recent history of MPDA and of the pre- adopted an interpretation of the term vailing doctrines which other states "acquired" appearing in § 3-6A- Developments in with similar statutes have employed 01(e) as: Maryland's Intestate in enforcing those statutes. While The on-going process of mak- stressing the importance of protect- ing payment for property. Tib- Succession Law ing the interests of spouses who had bets, 406 A.2d at 77. Under this made monetary and nonmonetary definition, characterization of contribution to the marital unit and nonmarital or marital property The 1982 amendment to Md. Est. residence, the court considered and depends upon the source of & Trusts Code Ann. § 3-102 (1974), rejected two competing theories each contribution as payments is a welcome change to Maryland's adopted by a majority of its sister are made, rather than at the time jurisdictions: (1) the "inception of intestate succession law. The legis- legal or equitable title or pos- lature's purpose for enacting the title theory," which grants title to session of the property is ob- amendment was to reflect the in- the spouse who had acquired an eq- tained. uitable right to the property prior to testate's desire to have the greater the marriage, even though not per- Id. at -, 448 A.2d at 929. portion of the estate go to the sur- fected, and (2) the "transmutation viving spouse. of property theory," which classi- Thus, in light of the court's newly Under the statute as it existed prior fies property as marital for the pur- adopted source of funds theory and to 1981, a surviving spouse received pose of equitable distribution when interpretation of the term "ac- only one third of the deceased's es- there has been a contribution of quired," it remanded the case to the tate if there was a surviving issue. marital funds to nonmarital prop- trial court so that there might be a If there was no surviving issue, but erty. Instead, the court held that determination as to: (1) the source a surviving parent of the deceased, under the MPDA, the appropriate of the funds expended for the parcel then the spouse's share of the estate analysis to be applied is the "source of land and the improvements made increased to one half. And, if there of funds theory." thereon by the spouses individually were no surviving issue or parents, but a surviving sibling of the de- Under that theory, when prop- and as a unit; (2) the degree to which ceased, then the spouse's share be- erty is acquired by an expend- the parcel of land and the marital came one half of the residue of the iture of both nonmarital and residence are to be characterized as estate plus $4,000.00. Thus, the only marital property, the property marital and/or nonmarital; and (3) way a surviving spouse was entitled is characterized as part non- the value of the marital property. to receive the entire estate was if marital and part marital. Thus, The aforementioned factors are all a spouse contributing nonmar- relevant in the court's determina- there were no surviving issue, par- ents or siblings of the deceased. Md. ital property is entitled to an tion of an equitable distribution of Est. & Trust Code Ann. § 3-102 interest in the property in the the property in issue. ratio of the nonmarital invest- The decision adds some clarifi- (1974). The 1981 amendments to the law ment to the total nonmarital and cation to the MPDA which to this increased the spouse's distribution marital investment in the prop- date remains a statute relatively un- erty. The remaining property is defined by case law. It seems to re of the estate to one half regardless characterized as marital prop- affirm that Maryland courts have lit- of whether there was a surviving issue or parent. Absent a surviving erty subject to an equitable dis- tle or no intention of becoming a issue or parent, the spouse received tribution. community property jurisdiction, as evidenced by the Court of Ap- the entire estate regardless of Harper, -- Md. at -, 448 A.2d at peals's rejection of the "inception of whether or not there was a surviv- 929. title theory" and the "transmuta- ing sibling. Md. Est. & Trust Code tion of property theory." Ann. § 3-102 (1981). The court stated that the "source The 1982 amendment gives the of funds theory" is consistent with surviving spouse an even greater the language of § 3-6A-01(e), which portion of the estate if the surviving sets forth an exclusive list of non- issue is an adult as opposed to a marital property and indicates a leg- surviving minor issue. If the surviv- islative intent that certain property ing issue is an adult, then the spouse not be subject to equitable distri- will be entitled to the first $15,000 bution, specifically, property which of the estate plus one half of the is acquired prior to the marriage. residue. The same entitlement ap- plies if there is a surviving parent rate for redemption of certain re- sonal property, notwithstanding the of the decedent. But, if there is sur- versionary estates created by fact assignment of the leasehold in- "ground viving minor issue, the spouse will rent" leases for longer than terest must be executed, acknowl- receive only one half of the estate, 15 years. This action provides a much edged and recorded as deeds. Myers the other half of the estate going to needed incentive for creating sec- v. Silljacks, 58 Md. 319 (1882). the surviving minor issue. The policy ondary financing. However, "[u]nlike ordinary leases is to prevent minor issue from pos- ... the leasehold interest is fre- sibly becoming wards of the state quently, not to say usually, by far by insuring their support. Md. Est. Historical Background the most valuable of the two inter- & Trust Code Ann. § 3-102 (1982). "Ground rent" leases, while not ests in such perpetual leases ... The Proponents of the amendment generally used in other states, have leaseholder is the substantial owner were hoping that the legislature been used in Maryland, particularly of the property. All that the owner would adopt the Uniform Probate in Baltimore City, since the colonial of the ground rent is concerned Code § 2-102 (1969), which gives the days. The origin and development about is that his rent is secure..." surviving spouse the first $50,000 of of ground rents in this state have Mayor and City Council of Baltimore v. the estate plus one half of the res- been extensively reviewed by Judge Latrobe, 101 Md. 621, 640, 61 A. 203, idue, however, the Maryland leg- Frank A. Kaufman; The Maryland 209 (1905). islature was not ready for such a Ground Rent-Mysterious But Benefi- "In practical economic effect, the drastic change. The steady progres- cial, 5 Md. L. Rev. 1 (1940) and by relation of the lessee to the property sion of this law from 1974 to 1982 Mayer, Ground Rents in Maryland is that of an owner of land and im- indicates that it may not be long (1883). provements thereon subject to the before the Uniform Probate Code In the ground rent lease, the payment of the annual rent and taxes finds its way into Maryland Law. owner of the land in fee simple leases on the property . [t]he technical Louis J. Rosenthal, member of the Governor's it for the period of 99 years with a relation between the owner of the Committee on Intestate Succession and a covenant for renewal from time to rent and of the leasehold is that of member of the adjunct law faculty of the Uni- time forever upon payment of a small landlord and tenant." Jones v. Ma- versity of Baltimore School of Law supplied renewal fine. The renewal is con- gruder, 42 F. Supp. 193, 196 (D. Md. information regarding this recent amend- ditioned on the lessee paying a cer- 1941). Furthermore, the owner of the ment. tain rent (usually payable semi-an- leasehold under ground rent lease nually), which, if capitalized at a may assign, sublet or mortgage the reasonable rate of interest, repre- leasehold. Williams v. Safe Deposit & Legislative- sents what is conceived to be the Trust Co., 167 Md. 499, 175 A. 331 value of the land. The lease also (1934). New Incentive usually provides that if the payment For more than a century the lease- is in default the lessor may re-enter hold owner could not absolve him- for Secondary and terminate the lease. This sys- self of the necessity of paying the tem of creating leasehold estates ap- rent absent an appropriate provi- Financing? pears to have been based on the sion in the lease.