Under the Uniform Probate Code the executor or executrix is referred to as the personal representative. Under Maryland law the personal representative is defined as including “an executor or administrator but not a special administrator.” Md. Code Ann., Est. & Trusts § 1-101(q). The reference to executor and administrator refers to the traditional distinction between someone named under will (an executor) and one appointed by the Orphans’ Court (an administrator). The personal representative is the person charged with overseeing the winding up of the decedent’s affairs. This entails collecting and inventorying assets, managing assets during administration, paying claims and other charges, and then distributing the property to those entitled to receive same. The distinction in Maryland is made between a personal representative and a special administrator.
Section 6-401 provides that a special administrator may be appointed upon the petition by an interested party, a creditor, or the register, or upon a motion by the court “whenever it is necessary to protect the property prior to the appointment and qualification of the personal representative or upon the termination of appointment of a personal representative and prior to the appointment of a successor personal representative.” Additionally, a request for judicial probate effectively terminates the personal representative’s power and converts the personal representative to a special administrator. Md. Code Ann., Est. & Trusts § 6-307. The main distinction between a personal representative and a special administrator is that the special administrator does not have the authority to distribute property. Indeed, the special administrator’s role is to preserve the property of the estate. See Md. Code Ann., Est. & Trusts § 6-403.
The duties of the personal representative are fairly sweeping. Section 7-101 states that the personal representative is a fiduciary “under a general duty to settle and distribute the estate of a decedent in accordance to the terms of the will” or the intestacy statute. Because he or she is a fiduciary, he or she is governed by the equitable principles generally applicable to fiduciaries and is charged with “considering the interests of all interested persons and creditors.” Id.; see also Hartford Accident & Indem. Co. v. Aiello, 497 F.2d 257 (4th Cir. 1974). Initially Maryland recognized that the standard of conduct imposed upon fiduciaries by § 7-101 means that there is an independent cause of action upon the breach of such conduct Hartlove v. Md. School for the Blind, 111 Md. App. 310 (1996).,Currently, however, this liability is restricted. See Kann v. Kann, 344 Md. 689, 690 A.2d 509 (1997); Bresnahan v. Bresnahan, 115 Md. App 226, 693 A.2d 1 (1997). Indeed, in light ofKann, the Court of Appeals remanded Hartlove on its second cert. petition, thus calling into question just how independent this independent case of action really is in Maryland. Hartlove, at 244 Md. 720 (1997).
Section 7-601 establishes the right of a personal representative to be paid “reasonable compensation” for services. The statute sets out a maximum commission, “unless the will provides a larger measure of compensation”, that may be awarded “upon [a] petition filed in reasonable detail” with the Orphans’ Court.
Section 7-602 provides for the compensation for the services of an attorney in the administration of an estate. Compensation “shall be fair and reasonable in the light of all the circumstances to be considered in fixing the fee of an attorney.” Section 7-602(c) states that the Court shall “take into consideration in making its determination” the total charge that would be appropriate as a cost for the administration of the estate, the § 7-601 amount. In practice this usually means that the combination of the commission to the personal representative and the compensation of the services of an attorney for helping in general administrative matters is capped at the § 7-601 amount. It is very important that an attorney not take attorney’s fees out of an estate without a Court Order. SeeAttorney Grievance Commission v. Owrutsky, 322 Md. 334, 587 A.2d 511 (1991); Beyer v. Morgan State Univ., 369 Md. 335, 800 A.2d 707 (2002). Courts have also held that co-personal representatives are entitled to share in the compensation regardless of who claims to have done most of the work.
Maryland Estates and Trusts Article § 7-603 states:
“When a personal representative or person nominated as personal representative defends or prosecutes a proceeding in good faith and with just cause, he shall be entitled to receive his necessary expenses and disbursements from the estate regardless of the outcome of the proceeding.”
This provision is the basis for attorney’s fees for representing estates in litigation as opposed to the routine work of assisting a personal representative. A trial judge must determine whether a personal representative acted in good faith and in just cause in defending a will. Loss of the case does not automatically mean that the defense was in bad faith, if so, no personal representative would risk defending an action and accumulating attorney’s fees that may end up costing him or her money out-of-pocket. See Fields v. Mersack, 83 Md. App. 649, 577 A.2d 376 (1990). Nat’l Wildlife Fed. v. Foster, 83 Md. App. 484, 498, 575 A.2d 776 (1990) set forth three factors as a test for awarding interim attorney’s fees: (i) whether there is prima facie evidence that the personal representative will succeed on the merits, (ii) whether greater injury is done to the personal representative in denying interim fees than would be done to the opposing party by granting the fee, and (iii) whether the party opposing the interim fees will suffer irreparable injury if the interim fees were awarded. Id.
Under § 8-103, claims against an estate of the decedent are limited to those presented within six months from the date of the decedent’s death or two months after the personal representative mails or otherwise delivers to the creditor a copy of a certain notice. There is no question but that this statute governs all of the probate estate. Interestingly, a debt that is secured by a lien on non-probate property can be the basis of a claim against the probate estate. Cunningham v. Cunningham, 158 Md. 372, 148 A. 444 (1930) (half of mortgage debt on joint property may be claimed against the estate of the deceased joint tenant).
As noted, the Maryland claims statute runs from the date of death of the decedent. Earlier statutes that ran the statute of limitations from the appointment of a personal representative were found unconstitutional under the Due Process clause because creditors were not given reasonable notice before losing their right to assert claims. See Tulsa Prof’l Collection Serv. Inc. v. Pope, 485 U.S. 478 (1988). The Maryland statute, of course, does not involve any state action (such as granting Letters of Administration to a personal representative) but simply runs from the date of the death of the decedent. Hence, the Tulsa objection would not apply to the Maryland framework.
The Maryland Court of Appeals examined the statute of limitations for claims in probate inCunninghame v. Cunninghame, 364 Md. 266, 772 A.2d 1188 (2001). In Cunninghame, the decedent’s sister paid hospitalization bills on behalf of the decedent totaling over $36,000. The sister sent the decedent’s child a letter with the claim, although the child was not the personal representative when the letter was sent. Indeed, other individuals were named in the will as personal representatives. Those individuals eventually renounced the appointment as personal representative and the child eventually was appointed personal representative. This appointment, however, was beyond the six month claims period. The court held that the claim was barred by limitations because it was not sent to the personal representative. Additionally, the court rejected the claim based on an estoppel theory. In order to support estoppel, the personal representative must have made a clear affirmative representation on which the claimant detrimentally relied. The silence of the personal representative will not support estoppel. There must be an affirmative representation that the claimant need not file a claim with the estate made by one who then has the present power or later has the power to bind the estate. In Cunninghame, the child who later became personal representative was not found to have made any such representation.
The Maryland probate system is quite straightforward. The Orphans’ Court is the probate court, and comprises of three elected judges, except in Hartford and Montgomery Counties. Traditionally, most judges are not lawyers. In addition, the Register of Wills oversees the accounts. Because Maryland has recently eliminated the inheritance tax for lineal heirs the register’s office may be in a period of redefinition as the necessity for formal accounting deceases.