Each October 1 following the General Assembly of Maryland’s regular session, several new laws passed by the General Assembly and signed into law by the Maryland State Governor go into effect, and this October 1 will see some significant changes to estate planning go into effect. These changes encompass substantial revisions to intestate succession laws, the introduction of a Domestic Partnership Registry within the Registers of Wills, and the acceptance of e-signatures on probate documents other than original wills.
Effective October 1, 2023, the following changes will take place:
1. Maryland General and Limited Power of Attorney Act: New legislation in Maryland has expanded the abilities of agents under powers of attorney when it comes to gifting and government benefits. Effective October 1, 2023, changes to the law authorize agents to make certain gifts on the principal’s behalf to qualify for governmental programs or benefits. There will also be some change to the statutory language to be used in the form to ensure its durability in Maryland. Now is a good time to meet with your estate planning attorney to ensure your durable general power of attorney is compliant with the new law.
2. Intestacy Reform: During the previous legislative session, the General Assembly passed a comprehensive package of reforms pertaining to intestacy law. I urge you to acquaint yourself with the full scope of these new regulations, as they will have a significant impact on many estates, particularly concerning the inheritance share of surviving spouses or registered domestic partners. You can access the legislative text by clicking this link, and a side-by-side comparison between the current and new laws can be found here.
3. Registered Domestic Partnerships: A vital component of the intestacy reform package is the establishment of registered domestic partnerships in Maryland. Commencing on October 1, any two unmarried adults can formalize their domestic partnership by submitting a Declaration of Domestic Partnership to their local Register of Wills. This status entitles the surviving registered partner to specific benefits in cases of intestacy, such as being treated the same as a surviving spouse concerning the spousal share, priority for serving as a Personal Representative, and eligibility for a family allowance. Furthermore, it exempts the surviving partner from inheritance tax. It’s important to note that a surviving registered domestic partner cannot elect against a will. You can find a comprehensive guide to this new registry on the Maryland State website.
4. E-Signatures: An essential provision of the e-filing legislation that becomes effective on October 1 concerns e-signatures. The new law explicitly states that “A register may not refuse to accept any document based on the manner in which it was signed.” This provision excludes wills and codicils, but for all other documents, individuals may use wet signatures, e-signatures, DocuSign, or any other signing method. This change will be immediately effective. For example, if an attorney requires multiple interested parties to sign a Consent to Compensation form, that attorney can now circulate an electronic version for everyone’s convenience instead of dealing with multiple copies or physical mailing. While e-signed documents will still need to be submitted in paper form, we anticipate that this will streamline some paperwork and help reduce the volume of physical documents being handled.
However, there are a few potential challenges that have arisen with allowing digital signatures on powers of attorney in Maryland:
• Technical issues – There can be problems with getting digital signatures properly executed if the signers are not familiar with using electronic signature technology.
• Resistance from third parties – Even though laws require acceptance of digital signatures, some financial institutions, medical facilities, etc. have been reluctant to accept them on powers of attorney.
• Lack of signature witnessing – With wet ink signatures, the witnesses are physically present when the document is signed. With digital signatures, there is less ability to visually confirm the signature process was properly witnessed.
• Confirming identity – With in-person wet ink signatures, the notary can physically verify the identity of the signers. Digital signatures rely on other identity confirmation processes that some claim are less secure.
• Recordkeeping challenges – Long-term storage and retrieval of digital documents can present records management issues versus paper documents.
• Legal uncertainties – The validity and enforceability of digitally signed documents is still evolving in the courts. There may be some uncertainties until the case law catches up.
Over time, many of these challenges are likely to lessen as technologies and processes mature and become more commonplace. However, Maryland residents and their estate planning attorneys should be aware of the potential disadvantages of digital signatures today and take steps to ensure they are implemented carefully. Proper witnessing procedures and identity verification are key. When our office executes a POA, we prefer in-person signatures, with two witnesses and a notary, all live, together, and in the same space. Our best practice may make execution more cumbersome, but significantly reduces the likelihood that the agent will have challenges in the administration of the POA. The trade-off of convenience for certainty is well worth the extra effort for execution.
5. Supported Decision-Making in Maryland: Maryland recently authorized a new tool called supported decision-making agreements to help adults with disabilities maintain autonomy in making life choices. With a supported decision-making agreement, a disabled adult can choose a trusted “supporter” to help understand, communicate, and make decisions. However, the supporter cannot independently act on the adult’s behalf.
• Adult supporters can attend meetings with professionals at the disabled adult’s request and help gather relevant information.
• The goal is to avoid or limit guardianship by providing greater autonomy.
• Supporters cannot make decisions or act independently – they supplement, not replace, existing agents and guardians.
In general the law:
• Allows adults with disabilities to choose a supporter to assist with decisions, without transferring legal authority.
• Avoids guardianship which can restrict rights. Supporters help gather info, provide guidance, and assist communication.
• Outlines required SDM agreement terms on rights, responsibilities, and role of supporter.
• Supporter has no authority to independently make decisions. Instead, they facilitate the individual’s decision-making.
• SDM agreements work with, not replace, other arrangements like powers of attorney.
• A power of attorney grants decision-making authority to another.
• With SDM, individuals maintain autonomy and self-determination with assistance from trusted supporters.
As always, contact [email protected] to discuss your estate planning needs and feel free to set up a consultation to determine if these changes in the law will affect you and your estate plan.