Fiduciary Litigation | Estate Planning Lawyers

For over 35 years, Franke Beckett, LLC ^[1] has focused on the law of estates and trusts. Our award-winning legal team has composed this authoritative guide on fiduciary litigation in Maryland.

Practice Overview

The Scope of the Survey of the Law of Fiduciary Duty.

Actions Against Trustee.

Actions Against Personal Representatives.

The Orphans’ Court Jurisdiction.
1. The Jurisdiction of the Orphans Court to Construe Written Documents.
2. The Orphans’ Court, as a Court of Equity, May Apply Equitable Remedies.
Removing Matters from the Orphans’ Court.
1. Declaratory Judgments.
2. Transmitting Issues of Fact.
Enforcement of the Personal Representative’s Duty.
1. Breach of the Personal Representative’s Fiduciary Duty.
2. Removal of a Personal Representative.
Will Contests / Caveats.
Appeals from Orphans’ Court Final Decisions.
1. Appeals to the Appellate Court of Maryland.
2. De Novo Appeals to the Circuit Court.

Power of Attorney Litigation.

Origin in Agency Law and Early Codification.
The 2010 Act.
The Fiduciary Relationship.
The Agent’s Duties under the POA.
1. Mandatory Duties.
2. Default/Optional Duties.
Suits for Oversight/Enforcement of the Agent’s Actions.

Evidentiary Considerations in Fiduciary Litigation.

Extrinsic Evidence in Will Interpretation.
Extrinsic Evidence in Trust Interpretation.
1. Testamentary and Inter Vivos Trusts Are Treated the Same.
2. Extrinsic Evidence Can Contradict the Written Terms of a Trust.
The Dead Man’s Statute.
The Hearsay Rule.

End Note.

The Scope of the Survey of the Law of Fiduciary Duty

These materials will be limited to fiduciary litigation within the context of a Maryland estates and trusts law practice. Within that world, fiduciary duty and the litigation spawned by alleged abuses of that duty touch almost every aspect related to the practice niche. “Fiduciary relations include not only the relation of trustee and beneficiary, but also, among others, those of guardian and ward, agent and principal, and personal representative and interested person…”^[2]

Accordingly, actions by a beneficiary against a trustee are for breaches of the trustee’s fiduciary duty Although well established by the common law, the Maryland Trust Act makes this explicit: “A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.”^[3]

Similarly, the Maryland Estates and Trusts code defines the role of the personal representative of a probate estate as a fiduciary relationship: “ If the exercise of power concerning the estate is improper, the personal representative is liable for breach of the fiduciary duty of the personal representative to interested persons for resulting damage or loss to the same extent as a trustee of an express trust.”^[4]

The agent/principal relationship under a durable power of attorney is also fiduciary in character.^[5] The nature and extent of the fiduciary relationship reflects its origin in the law of agency. The common law and the codification under the Maryland General and Limited Power of Attorney Act sets out the parameters of that relationship.

Fiduciary litigation, however, is broader than cases strictly within the estates and trust world. It also governs the relation of attorney and client, corporate director and shareholder, as well as the relations among partners.^[6] Even then, however, such litigation may fit within an estates and trusts litigation practice. The formation and advising clients with their closely held family businesses, for example, is a routine part of many planning practices. Cases concerning the alleged abuse by the majority owners of a minority owner involve fiduciary principles whether such businesses are free standing or in trust.^[7]

Thus, fiduciary litigation even within the seemingly narrow practice niche of estates and trusts is broad. These materials, however, shall focus primarily on those actions involving the relationship of trustee and beneficiary, of personal representative and legatee/heir, and of agent and principal. Accordingly, these materials will address: II Actions Against Trustees, III Actions Against Personal Representatives, and IV. Actions Against Agents of Powers of Attorney. Section V shall address Evidentiary Rules Unique to Fiduciary litigation.^[8]

Actions Against Trustee

The Common Law and Trust Law Codification

Rules regulating complex human relationships, like the fiduciary duties owed by a trustee to a trust beneficiary, developed by the evolutionary process of common law over hundreds of years. Because the common law consists of judges applying precedent to resolve specific cases involving specific facts, it grows out of experience not from a grand theoretical construct: “What has been said [about the development of judge-made law] will explain the failure of all theories which consider the law only from its formal side; whether they attempt to deduce a corpus from a priori postulates, or fall into the humbler error of supposing the science of the law to reside in the elegantia juris, or logical cohesion of part with part. The truth is that the law is always approaching, and never reaching, consistency. It is forever adapting new principles from life at one end, and it always retains old ones from history at the other, which have not yet been absorbed or sloughed off. It will become entirely consistent only when it ceases to grow.”^[9]

Yet exclusively relying on a body of law sourced from the precedent of thousands of cases (some seemingly contradictory) over a span of centuries causes its own problems.^[10] As an attempt to make trust law less unwieldly, the law of trusts was codified in Title 14.5 of the Estates and Trusts Article as the Maryland Trust Act. The MTA, effective 2015, is an effort to establish a comprehensive system of trust law. It was modeled on the Uniform Trust Code (UTC) and essentially codified much of the common law and principles surrounding trusts.^[11] By recognizing the continuing virtue of common law, the MTA seeks to balance the potential rigidity of a statutory system and the organic development of principles under the developing judge-made common law.^[12]

Duties of Trustee to Beneficiary

By definition, an express trust creates duties owed by the trustee to the private beneficiary.^[13] These duties, fiduciary in character, inform the core definition of a trust: “A trust … is a fiduciary relationship with respect to property [held] for the benefit of another person.”^[14] The nature and scope of these duties depend, of course, on the terms of the trust as well as on the application of “an unusually high standard of ethical and moral conduct”^[15] owed by the trustee to the beneficiary that is inherent in the office of being a fiduciary.

Settlor’s Intent

The terms of the trust communicate the settlor’s intent which intent is the lodestar of trust interpretation: “’Terms of a trust’ means the manifestation of the intent of the settlor regarding the provisions of a trust as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding.”^[16]

This definition casts a wide net, limited only by various rules of evidence and construction. In certain circumstances, extrinsic evidence can be admitted to contradict the terms of the written trust agreement: “ The court may reform the terms of a trust, even if unambiguous, to conform the terms to the intention of the settlor if it is proved by clear and convincing evidence that both the intent of the settlor and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.”^[17]

The MTA generally describes the duties and powers of a trustee. By design, the basis of those duties and powers are rooted firmly in the common law of trusts.^[18] Thus, when bringing or defending a cause of action against a trustee, both the MTA and the common law come into play.

At common law, the fiduciary duty governing trusts generally “resolves into two great principles, the duties of loyalty and prudence … Sub-rules of fiduciary administration abound … All of these rules are subsumed under the duties of loyalty and prudence, they are means of vindicating the beneficial interest.”^[19] The duty of loyalty “is the duty to administer the trust solely for the benefit of the beneficiaries and to exclude the interests of others as well as the trustee’s own personal interest.”^[20] The fiduciary duty of prudence and that of care, both terms often used interchangeably, focus on management and investment by the trustee: “The duty of care, sometimes now referred to as the duty of prudence, encompasses a number of duties relating to the management and investment of the trust property.” ^[21] It follows that trust litigation involves one or both of these broad set of duties.

The Duty of Loyalty

The duty of loyalty has been described as the “essence” of the fiduciary relationship.^[22] Loyalty dictates that the trustees act for the sole benefit of the beneficiary: “The duty of loyalty requires the trustee ‘to administer the trust solely in the interest of the beneficiary.'”^[23] This obligation implements the beneficiaries’ entitlement to the trust assets. The trustee holds legal title to the assets, but only to facilitate the beneficiaries’ enjoyment.”^[24] The duty of loyalty directs the duty owed by the trustee to the interests of the beneficiary.

The duty of loyalty certainly prohibits self-dealing. A few Maryland cases address obvious violations of the duty of loyalty where the trustees used trust funds for their own personal expenses.^[25] Yet the duty of loyalty goes beyond the prohibition of self-dealing. The Maryland Supreme Court held that the duty of loyalty would be breached if the trustee acted to advance the interests others thereby disadvantaging the beneficiary’s interest: “Even if the trustee has no personal stake in a transaction, the duty of loyalty bars him from acting in the interest of third parties at the expense of the beneficiaries.”^[26] In Board of Trustees v. Mayor and City Council of Baltimore, the Court held that the trustees could divest trust holdings from stock in companies doing business in South Africa, pursuant to the Anti-Apartheid Act, without violating its duty of loyalty. This ruling is based on a finding that the trustees had many other investment options so the city’s ordinance would not injure the pension beneficiaries. Thus, the trustees may consider social consequences of its investments without violating its duty of acting “solely in the interests of the beneficiaries.” ^[27]

Although it would ordinarily exclude all selfish acts by a trustee, the exclusivity of the duty of loyalty is subject to an important exception where the settlor has expressly or impliedly approved of the self-dealing transaction of conflict-of-interest position.^[28]

Prior to the MTA, the Supreme Court addressed this exception in Goldman v. Rubin.^[29] Although the case involved an action by a legatee against the personal representatives of a decedent’s estate, the legatee and the Court addressed the fiduciary duty as if the personal representatives were the trustees of an express trust^[30]. In that case, the testator appointed as personal representatives various family members who were co-owners and board members of the closely held corporation. As such, they implemented an I.R.C. § 303 redemption – effectively dealing with themselves to buy back stock from the estate. Nevertheless, it did not constitute an act of self-dealing or a breach of their duty of loyalty to the legatee because the testator was deemed to have authorized the transaction.^[31]

The Maryland Trust Act, adopted much of the UTC provision addressing the duty of loyalty, “the most fundamental duty of the trustee.”^[32] Under the common law, transactions involving conflicts of interest followed the “no further inquiry” rule and the MTA and the UTC preserve the rule: “A transaction affected by a conflict between the trustee’s fiduciary and personal interests is voidable by a beneficiary who is affected by the transaction. Subsection (b) [of both the MTA and UTC] carries out the ‘no further inquiry’ rule by making transactions involving trust property entered into by a trustee for the trustee’s own personal account voidable without further proof. Such transactions are irrebuttable presumed to be affected by a conflict between personal and fiduciary interests. It is immaterial whether the trustee acts in good faith or pays a fair consideration.”^[33] An implied waiver, however, per Goldman v. Rubin, is preserved in MTA§ 14.5-802 (b) (1).

Md. Code Est. & Trusts § 14.5-802 (a) -(b)

Administration of trust solely in interests of beneficiaries

(a) A trustee shall administer the trust solely in the interests of the beneficiaries.”

(b) Subject to the rights of persons dealing with or assisting the trustee as provided in § 14.5-909 of this title, a sale, an encumbrance, or any other transaction involving the investment or management of trust property entered into by the trustee for the personal account of the trustee or which is otherwise affected by a conflict between the fiduciary and personal interests of the trustee is voidable by a beneficiary affected by the transaction unless:

(1) The transaction was authorized by the terms of the trust;

(2) The transaction was approved by the court;

(3) The beneficiary did not commence a judicial proceeding within the time allowed by law;

(4) The beneficiary consented to the conduct of the trustee, ratified the transaction, or released the trustee in compliance with § 14.5-907 of this title; or

(5) The transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming the trustee.

MTA § 14.5- 802(f) exempts conflict transactions involving the trustee’s compensation from the general no-further-inquiry rule and does not preclude actions regarding setting commissions “if fair to the beneficiaries.”

The Duty of Care

The second “great principle” of fiduciary duty is prudence or care. This is the requirement that the trust be administered with a level of care that achieves the settlor’s purposes. To do so, however, the trustee must exercise judgment and discretion in many matters relating to its management.

Some trusts express the discretion given to the trustee as “absolute,” “sole,” or “uncontrolled” discretion, particularly related to the discretion to make distributions. This extended discretion was viewed by the first two Restatements of Trusts “as not interpreted literally but are ordinarily construed as merely dispensing with the standard of reasonableness. In such a case the mere fact that the trustee has acted beyond the bounds of reasonable judgment is not a sufficient ground for interposition by the court, so long as the trustee acts in a state of mind in which it was contemplated by the settlor that he would act.” ^[34] The Reporter of the Restatement (Third) of Trusts, Dean Edward C. Halbach, Jr., in his seminal article, Problems of Discretion in Discretionary Trusts, showed that all courts hold that the exercise of a fiduciary power is within the reach of the court of equity.^[35] The reasonable standard is what permits courts to oversee a trustee’s actions. ^[36]

The point of having the fiduciary duties of the trustee be subject to a reasonableness standard is to lock-n court review: “The duty of prudent administration is a reasonableness norm, comparable to the reasonable person rule of tort. An objective standard of care places the trustee under a duty to the beneficiary in administering the trust to exercise such care and skill as a man of ordinary prudence would exercise in dealing with his own property.”^[37]

The MTA states that a trustee administers the trust as a prudent person would “considering the purposes, terms, distributional requirements, and other circumstances of the trust.”^[38] The prudent person standard had its origin in Harvard College v. Amory,^[39] which generally proscribed the trustees were to manage trust investments as a prudent person would manage their own investments. Over time, the prudent person rule evolved from one of common-sense judgments to a “constrained” approach, more focused on the safety of each investment, instead of the portfolio as a whole.^[40] The MTA provision of the duty of prudence, is identical to a parallel provision of the UTC. The notes to the UTC references a more modern uniform investment act closer to the original Harvard College case and not as constrained as later case law would suggest.^[41]

Md. Code Est. & Trusts § 14.5-804.

Prudent person standard applied to administration of trust ^[42]

(a) A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust.

(b) In satisfying the standard described in subsection (a) of this section, the trustee shall exercise reasonable care, skill, and caution.

Cause of Action

Fiduciary litigation falls into one of two of the general principles of fiduciary duty. It is based on a failure of a trustee to be loyal or to act prudently, or both. As noted below, however, when pleading a cause of action for breach of a fiduciary duty, the particular duty breached and the harm to the plaintiff must be plead.

There is nothing per se in the common law that differentiates between the professional and the non-professional trustee. Under common law, the various fiduciary duties apply with equal force, in theory, to both. Within academia, however, there is a debate as to whether the courts routinely apply a less rigorous standard to non-professional trustees.^[43]

The MTA and the UTC distinguish between trustees with special expertise and those without such expertise: “A trustee that has special skills or expertise, or is named trustee in reliance on the representation of the trustee that the trustee has special skills or expertise, shall use those special skills or expertise.”^[44] It follows that a professional trustee would be held to a higher standard than those lacking such expertise or skills and are liable for damages for a failure to do so.

Md. Code Est. & Trusts § 14.5-806.

Special skills or expertise of trustee

A trustee that has special skills or expertise, or is named trustee in reliance on the representation of the trustee that the trustee has special skills or expertise, shall use those special skills or expertise.

Equity Jurisdiction for Breaches of Trust

Actions by beneficiaries against trustees are generally the province of equity: “It is very certain that the supervision of trusts is the province of a court of equity …”^[45] Thus, such actions may not be re-characterized as law actions: “Trusts are, and have been since they were first enforced, within the peculiar province of courts of equity.” ^[46] Like the early English courts of law, “modern courts have not permitted the beneficiary of a trust to maintain an action at law for tort against the trustee for breach of trust.”^[47] Consequently, “[w]here the trust estate includes chattels and the trustee deals wrongfully with them, the remedy of the beneficiary is by a suit in equity, and not by an action of trespass, trover, detinue, replevin, or case, or any other action at law.” ^[48] Professor Bogert expressed the same concept when he wrote: “The court of equity first recognized the trust as a legal institution and has fostered and developed it. Thus the beneficiary naturally goes to this court for protection of his rights under the trust”^[49] An exception arises where the trustee’s duty is immediately and unconditionally to pay money or to transfer a chattel to the beneficiary.^[50]

Breach of Fiduciary Duty as a Tort

The Restatement (Second) of Torts, however, recognizes liability for a violation of fiduciary duty as a tort.^[51] Largely resting on the Restatement as its basis, the Appellate Court of Maryland opened the possibility that the breach of fiduciary may be a tort, with the parties entitled to a trial by jury.”^[52] Shortly after, the Appellate Court of Maryland made that pronouncement, the Maryland Supreme Court muddied the water by seemingly stating that Maryland did not recognize the breach of fiduciary as an independent cause of action.^[53]

What it meant by its holding, however, was that: “Maryland does not have a single, discrete cause of action for all breaches of fiduciary duties; instead, it has several (perhaps even many) different causes of action, with different essential characteristics, depending upon the nature of the fiduciary relationship in question and the remedies that historically have been available to address a breach of that fiduciary relationship.”^[54] In contexts other than the enforcement of rights as a trust beneficiary, the fact that the cause of action is based on a breach of fiduciary duty does not preclude it from being an action at law where a jury and punitive damages are available.^[55] “[I]dentifying a breach of fiduciary duty will be the beginning of the analysis, and not its conclusion. Counsel are required to identify the particular fiduciary relationship involved, identify how it was breached, consider the remedies available, and select those remedies appropriate to the client’s problem. Whether the cause or causes of action selected carry the right to a jury trial will have to be determined by an historical analysis.”^[56] For traditional suits against trustees by trust beneficiaries, however, these remain equitable actions.^[57]

Remedies for Breaches of Trust

As noted, punitive damages are not available in actions by a beneficiary against the trustee in the usual case.^[58] Aside from the equity/law distinction, it mirrors a more general policy consideration: “The law ought not make trusteeship so hazardous that responsible individuals and corporations will shy away from it.”^[59] The remedies available for the breach of duty, however, are broad, and include:

Compelling the trustee to perform the trustee’s duty, including making discretionary payments to the beneficiary.
Enjoining the trustee from committing a breach of trust.
Compelling the trustee to redress a breach of trust by paying money or restoring property.
Ordering the trustee to account.
Appointing a special trustee to take possession of the trust property and administer the trust.
Suspend the trustee.
Remove the trustee.
Reduce or deny compensation to the trustee.
In certain circumstances void the act of the trustee and impose a lien or construct a trust on trust property wrongfully disposed of.^[60]

Under Maryland practice, the petition includes asking the Court to assume jurisdiction of the trust in order to implement the remedies.^[61] Venue is where the trust property or the trustee is located.^[62]

Forcing a Trustee to make discretionary distributions.

Often trusts will provide discretion to a trustee as to whether, and how much, the trustee must distribute to the beneficiary. The beginning point as to the extent and degree that a beneficiary may compel a distribution is, of course, the intent of the settlor as that intent is captured by the terms of the trust: “The extent of the interest of the beneficiary of a trust depends upon the manifestation of intention of the settlor …”^[63]

Under common law, the manifestation of this intention was generally fitted into two distinct categories: whether the trust was a “support” or “discretionary” trust. A support trust required the trustee to pay a certain amount or pay for certain expenses of the beneficiary. A support trust was seen as enforceable by a beneficiary and, therefore subject to the beneficiary’s creditor claims. A discretionary trust gave various degrees of latitude to the trustee in using the trust income or principal for the beneficiary.

Depending on the degree of discretion given to the trustee, a discretionary trust was viewed as either beyond a beneficiary’s ability to force a distribution or, at least, having significant barriers to forcing distributions. Accordingly, wholly discretionary trusts were viewed as insulated from a beneficiary’s creditors because the beneficiary could not force a distribution absent abuse of discretion.^[64].

The support/discretionary distinction, however, was false: “[T]he theory that a creditor could not reach the trust because the creditor stood in the shoes of the beneficiary and the beneficiary could not force distributions from the trust was flawed, because no matter how broadly worded the trustee’s discretion was, it was always subject to review by a court for abuse.”^[65]

The Restatement (Third) of Trusts and the UTC eliminated the distinction between discretionary and support trusts, treating the latter as a discretionary trust with a standard.^[66] Unlike the UTC, however, the MTA retains the distinction between support and discretionary trusts.^[67] Almost any discretionary provision sweeps the trust into the discretionary trust category under the MTA.^[68] Under the MTA, the claims of a beneficiary’s creditors cannot be satisfied from a discretionary trust assets: “A beneficial interest that is subject to a discretionary distribution provision may not be judicially foreclosed, attached by a creditor, or transferred by the beneficiary.”^[69]

The MTA provides that a trustee’s exercise of discretion is subject to Court oversight for trustee abuse of discretion.^[70] As discussed above^[71], the older two Restatements held that “extended” discretion was not subject to a “reasonableness” standard. Extended discretion was where the trust instrument stated that the trustee shall have “absolute” or “unlimited” or “uncontrolled” discretion.^[72] If the exercise of discretion is not subject to a reasonable standard, it is subjective and not subject to meaningful court review. The position of the first two Restatements has been proven not to be an accurate restatement of the common law.^[73] The MTA provides that notwithstanding the grant of extended discretion, a trustee abuses its discretion if it fails to exercise its judgment in accordance with the terms and purposes of the trust or acts beyond the bounds of reasonable judgment.^[74] The exercise of discretion can always be examined by the court.^[75] It is the fiduciary nature of the exercise of discretion that guarantees review and regulation by the Courts: “[N]o language, however strong, will entirely remove any power held in trust from the reach of a Court of Equity.”^[76]

The Right to Information.

The gateway to beneficiary enforcement of rights in a trust is access to information. Following the UTC, the MTA codifies a trustee’s duty to inform a beneficiary. It limits the pool of beneficiaries entitled to information to “qualified beneficiaries” which is defined as beneficiaries either entitled to current distributions or those considered “first-line remaindermen.”^[77] A qualified beneficiary, however, does not include an appointee under the will of a living person or the object of an unexercised inter vivos power of appointment.”^[78] A remainder beneficiary of a revocable trust is not treated as a qualified beneficiary while the settlor is living.^[79] The qualified beneficiaries are to be kept reasonably informed and the MTA spells out the scope of the information that is to be provided.^[80] The MTA backstops the duty to inform by making these provisions part of the mandatory, non-modifiable, rules governing trusts regardless of the terms of a specific trust.^[81]

Removal.

Two Maryland statutes set out the basis for trustee removal, both applicable to the removal of a trustee.^[82] The later enacted statute is part of the MTA whereas the earlier one applied to removal actions before the general codification of the Maryland law of trusts. To some degree the statutes overlap, but the statute enacted as part of the MTA could be characterized as more focused on the benefit that the removal would be to the trust beneficiaries.^[83] Depending on the circumstances, many petitions for trustee removal recite grounds from both statutes.

The Impact of an Exculpatory Clause.

Maryland historically recognized exculpatory clauses to limit the liability of the trustee.^[84] Under common law, to be effective, the exculpatory clause must not relieve a trustee of liability for a breach of trust that is committed in bad faith or intentionally committed.^[85] The MTA generally adopts the UTC approach to such clauses (which is somewhat different than the common law restrictions):

MTA § 14.5-906. Term of trust relieving trustee of liability

In general

(a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that the term:

(1) Relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries;

(2) Was inserted into the trust as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor; or

(3) Was unreasonable under the circumstances.

Burden of trustee to prove fairness of exculpatory term

(b) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that the existence and contents of the exculpatory term were adequately communicated to the settlor.

Settlors represented by independent counsel

(c) If the settlor was represented by independent counsel, an exculpatory term is not considered drafted or caused to be drafted by the trustee, even if the term incorporates suggested provisions provided by the trustee.

MTA § 14.5-906 (a) (1-2) are exactly the same as UTC § 1008 (a) (1-2). The Maryland statute adds a requirement that the exculpatory provision must be reasonable under the circumstances.^[86]

MTA § 14.5-906 (b) and UTC § 1008 are identical in adding additional requirements if the provision was drafted or caused to be drafted by the trustee. The Comments to the UTC provide factors that might be considered when determining whether the provision is fair: “In determining whether the clause was fair, the court may wish to examine: (1) the extent of the prior relationship between the settlor and trustee; (2) whether the settlor received independent advice; (3) the sophistication of the settlor with respect to business and fiduciary matters; (4) the trustee’s reasons for inserting the clause; and (5) the scope of the particular provision inserted. See Restatement (Second) of Trusts § 222 cmt. d (1959).”

The Maryland statute adds subsection (c) that provides that the burden to prove the fairness of the exculpatory clause is fair is avoided if the settlor is represented by independent counsel. Although this is not part of the UTC provisions, it is consistent with the UTC approach and, indeed, incorporates the UTC Comments to UTC § 1008: “If the settlor was represented by independent counsel, the settlor’s attorney is considered the drafter of the instrument even if the attorney used the trustee’s form.”

Cost of Suit.

A trustee is generally charged with taking “reasonable steps to enforce claims of the trust and to defend claims against the trust.”^[87] Consequently costs of suits generally are charges to the trust funds.^[88] In certain circumstances, these fees may be charged to the share of a beneficiary who brings an action rather against the common fund.^[89]

The successful defense by the trustee of a removal action will permit the trustee to charge the trust for their attorney’s fees. This has been the rule under Maryland common law and remains true under the MTA.^[90] This may not be true if the trustee is removed.^[91]

A beneficiary’s legal fees, on the other hand, generally follows a modified “American Rule.”^[92] Under the UTC, the court is granted the discretion to award attorney’s fees to any party, to be paid by another party or from the trust, “as equity and justice may require.” ^[93] The MTA, however, did not include this provision. The comment to the UTC section provides that it is based on the existing common law rule so a basis for seeking such fees from the trust exists separate from the statute.^[94] The common law test applied by courts in awarding beneficiaries their attorney fees is whether the proceeding is beneficial to the trust: “A court may, in the interest of justice, make an award of costs from the trust estate to a beneficiary for some or all of his or her attorney fees and other expenses. Ordinarily, however, awards of this type are limited to situations in which the beneficiary’s participation in the proceeding is beneficial to the trust, usually either because of a recovery that benefits the trust’s beneficiaries generally (rather than merely the beneficiary in question) or by clarifying a significant uncertainty in the terms of the trust.”^[95] If the plaintiff establishes a breach of fiduciary duty but no actual damages, the court may nevertheless award nominal damages for the breach of fiduciary duty which, in turn, may permit the successful plaintiff to receive costs of suit – including attorney fees.^[96]

Actions Against Personal Representatives.^[97]

The Orphans’ Court Jurisdiction

Uncontested estate administrations generally proceed as administrative probate, which is overseen by the Register of Wills. The Orphans’ Court^[98] handles contested matters. Maryland Code, Estates & Trusts § 2-102 (Power and Jurisdiction of the Court) sets out its jurisdiction:

Maryland Code, Estates & Trusts § 2-102

In General

(a) (1) The court may:

(i) Conduct judicial probate;

(ii) Direct the conduct of a personal representative;

(iii) Summon witnesses; and

(iv) Issue orders that may be:

Required in the course of the administration of an estate of a decedent; or
Necessary to determine the value or sources of payment of an elective share under § 3-413 of this article.

(2) The court may not, under pretext of incidental power or constructive authority, exercise any jurisdiction not expressly conferred.

As with most of the Maryland Code dealing with the estates of decedents, the statutory framework was significantly rewritten as a result work of the Henderson Commission in the late 1960s.^[99] The provisions of the jurisdictional statute carry forward the statement of the Orphans’ Court jurisdiction as set forth in the Henderson Commission Report with minor stylistic changes. The definition of such jurisdiction of the Orphans’ Court is not spelled out in any detail (“May conduct judicial probate, direct the conduct of a personal representative …”). Indeed, the most definitive statement in this section which sets forth the jurisdiction of the Orphans’ Court is an expression of the limited nature of its jurisdictional scope: “The court may not, under pretext of incidental power or constructive authority, exercise any jurisdiction not expressly conferred.”

This lack of detail was intentional: “This Commission did not feel that it was necessary to describe in detail all the rules which the Court of Appeals of Maryland has developed in setting forth those areas in which the Court does not have jurisdiction. These rules, for example, prohibit the Court from exercising jurisdiction over questions of title, administration of trust, or disinterment. The Commission does, however, intend that all of the rules which have been developed by the Court of Appeals for determining whether the Court has jurisdiction over any particular matter will continue to be the law.”^[100] Accordingly, the jurisdiction of the Orphans’ Court is largely left to the common law of Maryland. Its origins grew from the murky history of the authority of the ecclesiastical courts of England in the 18th century as amplified over time by the rulings of the Supreme Court of Maryland. Because of its nature as a court of limited jurisdiction, often those rulings focus on the limited nature of Orphans’ Court jurisdiction.

The Jurisdiction of the Orphans Court to Construe Written Documents

In 1991, the Supreme Court of Maryland addressed the issue of whether the Orphans’ Court had the jurisdiction to interpret a marital settlement agreement.^[101] The Court used that case to summarize jurisdictional issues in general as related to the Orphans’ Court. Because the Kaouris Court examined numerous of its decisions to reconcile “two, seemingly conflicting, lines of cases,” the case remains the starting point for understanding Orphans’ Court jurisdiction.^[102]

The facts in Kaouris are as follows: Mr. and Mrs. Kaouris entered into a marital settlement agreement that provided that the parties had agreed to live separate and apart and that they would (in consideration of other transfers of property) give up all rights to inherit from each other and any right or claim against the estate of the other. The parties, however, never divorced. When Mr. Kaouris died, the widow filed for her elective share and for the family allowance.^[103] The personal representative opposed these claims, asserting that the widow had waived her rights in the marital settlement agreement. The issue before the Orphans’ Court was whether the marital property agreement was an effective waiver of the widow’s right to the spousal allowance and/or elective share.

The Orphans’ Court ruled against the personal representative, concluding that “the agreement was void because the appellee and the decedent had never separated as the agreement contemplated.” ^[104] The personal representative filed an appeal directly to the Appellate Court of Maryland and it certified the jurisdictional issues to the Supreme Court of Maryland.^[105]

The Supreme Court of Maryland held that the Orphans’ Court has jurisdiction to construe a written document if the construction of the document is necessary to carry out its express jurisdiction. Thus, the focus is not on the type of document examined but rather why the document is being examined:

“We therefore reiterate: whether the orphans’ court has the power to construe a written document, be it a release, a will, or another instrument, is dependent on what the party is asking the court to do and whether, when the court construes that document, it does so consistent with, and in furtherance of, an express grant of power.”^[106]

The core principle of Kaouris is that it may “exercise broad authority within the area of its express jurisdiction.”^[107]

The Orphans’ Court, as a Court of Equity, May Apply Equitable Remedies

The Orphans’ Court has the power to do those things necessary to implement its primary jurisdiction. Thus, where the Court had erroneously permitted a personal representative to pay a claim, the Orphans’ Court had the power to order the claimant to refund the money to the estate.^[108] The Supreme Court held: “The power of the Orphans’ Court exercised in this case is comparable to an equity court’s power to order restitution in similar situations. Where a litigant has been deprived of property by order of a court, and the court is subsequently reversed, the equity court may order restitution.”

The Orphans Court applied the equitable doctrine of unclean hands to refuse to permit a surviving spouse her elective share. “Applying Maryland law with respect to the elements of undue influence, the Orphans’ Court found that (the surviving spouse) took undue advantage of the Decedent’s vulnerability in the immediate aftermath of (the Decedent’s wife’s of many years) death and ‘physically and emotionally dominated [him]’ to induce him to marry her.”^[109]

Applying the equitable doctrine of unclean hands, the Orphans’ Court refused to permit the surviving spouse to take her elective share of the Decedent’s estate. The unclean hands doctrine is an equitable remedy designed to protect the integrity of the court by intervening to prevent unjust enrichment.

Removing Matters from the Orphans’ Court

Declaratory Judgments

Historically, the Equity courts could determine issues related to Wills and to the administration of decedents’ estates if the Orphans’ Court was deemed not adequate to afford complete protection and relief.^[110] The determination of when the Equity court should accept jurisdiction over a particular matter was deemed “uncertain.”^[111] In dicta, the Supreme Court of Maryland opined that Equity should accept jurisdiction: ”If a substantial issue as to the meaning of a will exists, involving ambiguous or intricate provisions, construction of the will is generally for the equity court and beyond the authority of the orphans’ court.”^[112] The Kaouris Court characterized this as a “complexity” test that did not alter the fundamental jurisdiction of the Orphans’ Court to determine the issue, just the propriety of it exercising its jurisdiction.^[113] Whether the Orphans’ Court, however, may sua sponte transfer something within its jurisdiction to the Circuit Court is uncertain.

Although matters associated with administering decedents’ estates are often in the Orphans’ Courts, the Maryland Uniform Declaratory Judgment Act authorizes a court to determine “rights or legal relations in respect to the trust or the estate of [a] decedent, minor, disabled person, or insolvent” by ordering a fiduciary to do or to abstain from doing something, or to determine “any question” arising in the administration of the estate or trust.”^[114] The scope of the Uniform Declaratory Judgment Act in providing a procedure for the interpretation of Wills has deep roots. The Maryland Act closely tracks the 1922 Uniform Declaratory Judgments Act which, in turn, traces using declaratory judgments to interpret Wills to the Middle Ages.^[115] The Maryland Uniform Declaratory Judgment Act would permit a Will interpretation suit to originate in the Circuit Court.^[116]

Transmitting Issues of Fact

If a litigant believes that an issue of fact should be tried in the Circuit Court, there is a mechanism, the framing of issues, to bring that issue before the Circuit Court.^[117] A petition to transmit issues of fact is filed with the Orphans’ Court which “shall” transmit the issues to the court.^[118]

Because issues are limited to factual interpretations, to the extent the interpretation or construction of a document is a legal determination, it may not be sent to the Circuit Court on that basis. Most legal questions, however, involve an interpretation of fact – the intent of the testator, for example, for a Will. Early cases (pre- Kaouris) held that the Orphans’ Court could not interpret or construe Wills because it is a matter of law, not a matter of fact, and thus a matter for the Equity Court.^[119] Kaouris “explained” these earlier decisions and shifted the emphasis away from a blanket prohibition against interpretation of documents to a determination that an interpretation of a document is appropriate if it is ancillary to the Orphans’ Court primary jurisdictional functions.

Those early cases, however, illustrate that the distinction between issues of fact and issues of law is not clear cut. The fundamental rule for Will construction is well established: “[T]he intention of the testator is the polar star, and must prevail, if consistent with rules of law[.]”^[120] The intent is not the presumed intent but that expressed in the Will “gathered from the four corners of the will.” ^[121] The plain meaning of the words in the Will, however, should be understood in conjunction with the pertinent circumstances surrounding the testator at the time of its execution.^[122] Thus, the construction of a Will often involves both legal and factual elements. Nevertheless, it is seen essentially as a question of law. Although it is impermissible to frame issues of law, in many instances the issue may raise a mixed question of law and fact.^[123]

Each issue should be framed so that the factfinder can give but a single answer and “must be couched in plain and easily understood terms, and they must distinctly and clearly present the point.”^[124] For example in a caveat action, the on issue was framed as “was the testatrix legally competent to make a Will on [date]?” This transmitted issue was held proper.^[125] Beyond the historical basis for the rules governing the practice of transmitting issues, there is a policy reason: “The essentially-legal questions embodied in the issues now before us have nothing to do with those factual controversies. In effect, they ask the circuit court to give an advisory opinion on questions of law. This the circuit court cannot do…The policy reason that only issues of fact are permitted is the general prohibition of advisory decisions.”^[126]

Enforcement of the Personal Representative’s Duty

Breach of the Personal Representative’s Fiduciary Duty

Like the fiduciary duty of a trustee, a Personal Representative has a fiduciary that is enforceable by the legatees or heirs of a decedent’s estate. This duty is generally to administer the estate fairly:

Md. Code Ann., Estates and Trusts, § 7-101

(a)(1) A personal representative is:

(i) A fiduciary; and

(ii) Under a general duty to settle and distribute the estate of the decedent in accordance with the terms of the will and the estates of decedents law as expeditiously and with as little sacrifice of value as is reasonable under the circumstances.

(2) A personal representative shall use the authority conferred on the personal representative by:

(i) The estates of decedents law;

(ii) The terms of the will;

(iii) Orders in proceedings to which the personal representative is a party; and

(iv) The equitable principles generally applicable to fiduciaries, fairly considering the interests of all interested persons and creditors.”^[127]

This provision purposely relates the personal representative’s duties and obligations to the interested persons of an estate as of that owed by a trustee to its beneficiaries.^[128] Accordingly, the statute directly ties an interested person’s remedies to that of a beneficiary against the trustee of an express trust: “If the exercise of power concerning the estate is improper, the personal representative is liable for breach of the fiduciary duty of the personal representative to interested persons for resulting damage or loss to the same extent as a trustee of an express trust.” ^[129] The same duties of loyalty and prudence apply to Personal Representatives.^[130] The cases routinely equate the Personal Representative’s duties to the same standard of that of a trustee.^[131]

Removal of a Personal Representative

The Maryland statute provides for the grounds for removal:

Md. Code Ann., Estates and Trusts, § 6-306 (a)

Grounds for removal

(a) A personal representative shall be removed from office on a finding by the court that the personal representative:

(1) Misrepresented material facts in the proceedings leading to the personal representative’s appointment;

(2) Willfully disregarded an order of the court;

(3) Is unable or incapable, with or without the personal representative’s own fault, to discharge the personal representative’s duties and powers effectively;

(4) Has mismanaged property;

(5) Has failed to maintain on file with the register a currently effective designation of an appropriate local agent for service of process as described in § 5-105(c)(6) of this article; or

(6) Has failed, without reasonable excuse, to perform a material duty pertaining to the office.^[132]

Generally, the case law recognizes that the right to act as Personal Representative is valuable and not one to be removed without good cause: “This Court has repeatedly stated, ‘the right to administer, however, is a valuable one; consequently, an executor or administrator will not be removed except for legal causes, and after citation and an opportunity to be heard.’” ^[133]

The removal statute has been interpreted to require removal if the Personal Representative violates any of the statutory bases for removal.^[134] Under certain circumstances, however, the statute permits the Orphans Court latitude in ordering removal: “Even if there exists cause for removal for failure to perform a material duty pertaining to the office, the court may continue the personal representative in office if it finds that continuance would be in the best interests of the estate and would not adversely affect the rights of interested persons or creditors.”^[135]

In any event, a Personal Representative cannot be removed without a hearing:

Md. Code Ann., Estates and Trusts, § 6-306 (c)

Hearing conducted by court

(c)(1) A hearing shall be conducted by the court before the removal of a personal representative.

(2) The hearing may be held:

(i) On the motion of the court;

(ii) On the motion of the register; or

(iii) On the written petition of an interested person.

(3) Notice of hearing shall be given by the register to all interested persons.^[136]

Will Contests / Caveats

Overview of Will Challenges

With few exceptions the Maryland common law of Will enforceability and interpretation is rooted in the freedom of testators to determine how to leave their property at death. Indeed, this principle of testamentary freedom is a hallmark of American jurisprudence.^[137] A person is given great latitude to make a Will leaving his or her wealth to whomever they choose and for whatever reason.^[138] One of the few exceptions to the right of testamentary disposition is the elective share statute that is designed to protect a surviving spouse from disinheritance. ^[139] Otherwise, there are cases that uphold Wills even if the Will seems odd or peculiar.^[140] A person largely has an unfettered right to leave his or her estate as they may deem appropriate. It is against this background that Will challenges are evaluated.

Filing Petition to Caveat a Will

Under Maryland law, caveat must be filed within a relatively short period of time. Generally, “a petition to caveat shall be filed within six months after the first appointment of a personal representative under a will, even if there has been a subsequent judicial probate or appointment of a personal representative under that will. If another will or codicil is subsequently offered for probate, a petition to caveat that will or codicil shall be filed within three months after that will or codicil is admitted to probate or within six months after the first appointment of a personal representative under the first probated will, whichever is later.” ^[141] The only exception is that the court can grant an extension to file a caveat upon a petition requesting an extension filed within 18 months of the decedent’s death if “the person did not have actual or statutory notice of the relevant probate proceedings, or that there was fraud, material mistake, or substantial irregularity in those proceeding.” ^[142]

The short time permitting the filing of caveats generally results in the caveator pleading all of the possible grounds for invalidating a Will to cover facts unknown at the time of filing but unearthed in the formal discovery process during pendency of the suit. This is particularly acute because amended pleadings outside of the statutory filing deadlines to add a basis for the caveat are not permitted.^[143] So, if in discovery new grounds appear, it may be too late to preserve that basis.

Overview of Grounds for Contesting a Will

A Will, of course, takes effect when the person making it is dead. Accordingly, the testator is not available to explain what he or she was trying to accomplish with the Will. Over hundreds of years, rules and safeguards were developed in order to give some assurance that the Will is, in fact, properly reflecting the true desires of the testator. These rules set out strict formalities that had to be adhered to in order that the Will was valid. These rules sought to assure that the Will was the act of the testator and not someone else imposing their desires on the testator. Also, courts were able to set aside Wills if the Will was a product of fraud, a product of delusionary thinking of the testator, or other factors that would mean that the Will did not reflect his or her true testamentary intent.

The Henderson Report generally did not suggest a codification of the grounds for a caveat, relying instead on the existing common law. Thus, no statute sets forth the grounds: “The Commission also believes that it would serve no useful purpose to outline in the statute the available grounds for caveat. It has assumed, and intends, that the existing law of Maryland will continue to apply.”^[144]

The grounds for Will challenges range from failures to adhere to the Will formalities requirement (failure to sign the Will, have it witnessed by two or more credible witnesses), the legal competency of the testator, whether the Will was a product of the testator’s insane delusion, whether the Will was procured by the exercise of undue influence, and whether it was procured by a fraud exercised on the testator.

Maryland Will Formalities

The formal requirements for a valid Maryland Will are statutory:

4-102. Will requirements

Person qualified to make will

(a) Any person may make a will if the person is 18 years of age or older, and legally competent to make a will.

In general

(b) Except as provided in §§ 4-103 and 4-104 of this subtitle and subsection (f) of this section, every will shall be:

(1) In writing;

(2) Signed by the testator, or by some other person for the testator, in the testator’s physical presence and by the testator’s express direction; and

(3) Attested and signed by two or more credible witnesses in:

(i) The physical presence of the testator; or

(ii) The electronic presence of the testator, provided that an electronic will or remotely witnessed will satisfies the requirements under subsection (c) or (d) of this section.

Electronic will requirements; supervising attorney creating certified will

(c) An electronic will or remotely witnessed will executed under this subsection shall satisfy the following requirements:

(1) At the time the testator and witnesses sign the will, the testator and all witnesses shall be in the physical presence or electronic presence of one another and a supervising attorney, who may be one of the witnesses unless the will is signed, acknowledged, and sworn to before the supervising attorney as described in item (5)(iii)2 of this subsection;

(2) At the time the testator signs the will, the testator shall be a resident of, or physically located in, the State;

(3) Each witness who is in the electronic presence of the testator when the witness attests and signs the will, or provides an electronic signature on the will, shall be a resident of the United States and be physically located in the United States at the time the witness attests and signs the will;

(4) The testator and witnesses shall sign the same will or any counterpart thereof; and

(5) The supervising attorney shall create a certified will that shall include:

(i) A true, complete, and accurate paper version of all pages of the will including the original signatures or electronic signatures of the testator and all witnesses;

(ii) A signed original paper certification by the supervising attorney stating the date that the supervising attorney observed the testator and witnesses sign the will and that the supervising attorney took reasonable steps to verify:

That the certified will includes a true, complete, and accurate paper version of all pages of the will;
That the signatures contained in the certified will are the original signatures of each party signing the same paper will, or any counterpart thereof, and electronic signatures of each party signing the same electronic will, or any counterpart thereof;
That the testator and each of the witnesses signed the same will or any counterpart thereof;
The identity of each witness and that each witness who was not in the physical presence of the testator when the witness attested and signed the will, or provided an electronic signature on the will, was a resident of the United States and physically located in the United States at the time that the witness attested and signed the will; and
The identity of the testator and that the testator was a resident of, or was physically located in, the State at the time that the testator signed the will; and

(iii) An acknowledgement of the testator and the affidavits of the attesting witnesses before:

A notary public, under seal, attached or annexed to the will, in substantially the following form and content:

The State of Maryland.

County of __________.

Before me, the undersigned notary public, on this day personally appeared __________, __________, and __________, known to me to be the testator and the witnesses, respectively, whose names are signed to the attached or foregoing instrument and, all of these persons being by me duly sworn, __________, the testator, declared to me and to the witnesses in my physical or electronic presence that the said instrument is the testator’s will, that the testator is of sound mind, and that the testator had willingly signed or willingly directed another to sign the will under no constraint or undue influence, and executed it in the physical or electronic presence of the witnesses as a free and voluntary act for the purposes therein expressed, and that the witnesses, in the physical or electronic presence and at the request of the testator, signed the will as witnesses, and that to the best of the witnesses’ knowledge the testator was at least 18 years old, of sound mind, and under no constraint or undue influence.

__________ Testator

__________ Witness

Subscribed, sworn and acknowledged before me by __________, the testator, and subscribed and sworn to before me by __________ and __________, witnesses, this __________ day of __________, ___.

__________ Seal __________ Notary Public; or

The supervising attorney, attached or annexed to the will, in substantially the following form and content:

Before me, the undersigned supervising attorney, on this day personally appeared __________, __________, and __________, known to me to be the testator and the witnesses, respectively, whose names are signed to the attached or foregoing instrument, and the testator declared to me and to the witnesses in my physical or electronic presence that the said instrument is the testator’s will, that the testator is of sound mind, and that the testator had willingly signed or willingly directed another to sign the will under no constraint or undue influence, and executed it in the physical or electronic presence of the witnesses as a free and voluntary act for the purposes therein expressed, and that the witnesses, in the physical or electronic presence and at the request of the testator, signed the will as witnesses, and that to the best of the witnesses’ knowledge the testator was at least 18 years old, of sound mind, and under no constraint or undue influence.

__________ Testator

__________ Witness

Subscribed, sworn and acknowledged before me by __________, the testator, and subscribed and sworn to before me by __________ and __________, witnesses, this __________ day of __________, ___.

__________ Supervising attorney.

(d) An electronic will or remotely witnessed will executed under this subsection shall satisfy the following requirements:

(1) At the time the testator and witnesses sign the will, the testator and all witnesses shall be in the physical presence or electronic presence of one another;

(2) The requirements under subsection (c)(2) through (4) of this section shall be satisfied; and

(3) The testator shall create a certified will that shall include:

(i) A true, complete, and accurate paper version of all pages of the will including the original signatures or electronic signatures of the testator and all witnesses; and

(ii) An original paper certification signed and acknowledged by the testator in the physical presence or electronic presence of a notary public, who may not be one of the witnesses, stating:

The date that the testator and witnesses signed the will; and
That the testator took reasonable steps to verify the same facts and information required under subsection (c)(5)(ii) of this section.

Certified will deemed original will

(e)(1) Once the supervising attorney or testator creates a certified will as provided in subsection (c) or (d) of this section, the certified will shall be deemed to be the original will of the testator for all purposes under this article.

(2) The date of execution for a certified will described under paragraph (1) of this subsection shall be the date of execution stated in the certified will.

Executive Order 20.04.10.01

(f) A will executed in conformance with the provisions of Executive Order 20.04.10.01, authorizing remote witnessing and electronic signing of certain documents, shall be deemed to have been signed and witnessed in conformity with this section if the will was signed and witnessed during the time that the executive order was in effect.^[145]

Holographic Wills

Generally, Maryland does not recognize holographic Wills. A holographic Will is one handwritten by the testator which did not require witnesses. The basis for such Wills being accepted as valid hinged on the fact that it was completely in the handwriting of the testator.^[146] Several states permit holographic Wills, although the requirements have loosened under modern statutes: “[M]odern statutory provisions may vary, one central feature remains constant—no attesting witnesses are required for valid execution.”^[147]

The Maryland statute recognizes only two exceptions to its general rule prohibiting holographic Wills: holographic Wills executed by testators serving in the arm services outside of the United States under certain circumstances,^[148] and holographic Wills executed in states permitting holographic Wills or executed by a testator elsewhere, including Maryland, as long as it comports with the law of the testator’s domicile.^[149]

Will Formalities in General

Will caveats are based, in part, on a failure to follow the statutory formalities required to create a valid Will. The Will formalities require two witnesses. The Maryland statute permits remote witnessing if a specific process is followed. This will be discussed below.

For in-person Will executions, it may be best practice to gather the testator and the witnesses in one room together which is in accord with traditional practice. This practice, however, is not strictly necessary in Maryland. Maryland law, for example, does not require that witnesses to the will observe each other executing the will.^[150] The law is clear, however, that the witnesses must have attested and subscribed to the will in the presence of the testator, not each other.^[151] Although it may be desirable for the testator to identify that it is a will to which he wants the witnesses to subscribe, it is not strictly necessary for the testator to identify the document.^[152]

Except for non-remote witnessing procedures, an attestation clause is not a requirement to create a valid Will in Maryland. An attestation clause, however, is quite useful if a Will is challenged. This clause recites that the statutory requirements have been followed and it is attested to by the witnesses.^[153] It does not, of course, address other grounds for a Will challenge such as lack of capacity, the exercise of undue influence, or the testator suffering from insane delusions. A valid attestation clause shifts the burden of proof and thus goes a long way to establish that the formalities were followed.^[154]

Attestation clauses for non-remote Will executions that do not perfectly recite that the formalities were followed have some usefulness. The Maryland Supreme Court, for example, found the presumption of due execution with an “admittedly imperfect” attestation clause that failed to recite all the elements necessary for valid execution.^[155] The presumption of due execution was even extended to a Codicil without an attestation clause and without the testimony of the witnesses based solely because it was “signed by the Testatrix, witnessed, and notarized.”^[156]

The Maryland provisions permitting remote witnessing of Wills had its genesis in various emergency orders promulgated by the Maryland Governor during the 2020 Covid epidemic. Any Will executed pursuant to the executive order is grandfathered into validity by statute.^[157]

The “permanent” provisions offer two options: one where a lawyer is a supervising lawyer who creates a certificate attached to the assembled counterpart Will in a form substantially following the statutory form and content or where a remote notary creates the certifying document.^[158] In either case, the certification is, in fact, an attestation clause.^[159]

Challenges Based on Lack of Capacity

Maryland statutory law provides that: “Any person may make a will if he is 18 years of age or older, and legally competent to make a will.”^[160] This definition does not specify what constitutes legal competency. Maryland, like most states, follows the common law rule to determine legal testamentary capacity:

“Whether a testator had sufficient mental capacity is determined by a consideration of his external acts and appearances. It must appear that at the time of making the Will he had a full understanding of the nature of the business in which he was engaged; a recollection of the property of which he intended to dispose and the persons to whom he meant to give it, and the relative claims of the different persons who were or should have been the objects of his bounty.”^[161]

Dating from the testamentary laws of Maryland codified in the late 1790s until the changes made at the suggestion of the Henderson Commission Report of 1968, Maryland statute held that a person had testamentary capacity if such person was “of sound and disposing mind, and capable of making a valid deed or contract.” ^[162] The statutory standard was then changed to “legally competent to make a will” because the legal standard, as developed by substantial decisional law, is different for Wills than for executing deeds or contracts.^[163] To restate the past language would have called into question the standard established by the decisional language.

Maryland law has consistently held that evidence of the testator’s conduct and statements, declarations or conversations, before and after the execution of the Will, may be admissible to establish or dispute capacity if material and sufficiently near in time.^[164] A testator is presumed to have the capacity to make a valid will and the burden is on the caveators to show otherwise.^[165] Whether a testator has the requisite capacity is presumed and its lack would necessarily be determined largely by consideration of external acts.^[166]

Challenges Based on Undue Influence.

Setting aside a will because it was a product of undue influence on the testator rests on the premise that the undue influence is to such a degree that the testator is robbed of his or her free agency:

“Undue influence has also been a much litigated question. To warrant a finding that it invalidates a will, it must be shown that there existed that degree of importunity which deprives a testator of his free agency, which is such as he is too weak to resist, and will render the instrument not his free and unconstrained act.”^[167]

There is no bright line test to determine existence of undue influence. Certain factors, however, have been found by the Maryland Supreme Court as “characteristics” of undue influence:

“The benefactor and the beneficiary are involved in a relationship of confidence and trust;
The will contains substantial benefit to the beneficiary;
The beneficiary caused or assisted in effecting execution of the will;
There was an opportunity to exercise influence;
The will contains an unnatural disposition;
The bequests constitute a change from a former will; and
The testator was highly susceptible to the undue influence.”^[168]

In the context of a Will contest, the “relationship of confidence and trust” is one characteristic” that may indicate the existence of undue influence. A confidential relationship, like the other characteristics of undue influence in the caveat setting, however, must be combined by other factors showing that a testator’s actions were imposed on the testator rather than the testator’s free act.^[169]

Challenges Based on the Testator’s Insane delusion

When Maryland statutory law changed its provision related to testamentary capacity from being of “sound and disposing mind” to being “legally competent to make a will”, it did not eliminate the necessity of having a sound mind to be considered competent to make a valid Will.^[170] A testator is presumed legally competent to create a valid Will, which includes a presumption of being of sound mind. To be successful in caveating a Will, the plaintiff must rebut this presumption: “The law presumes that every man is sane and has capacity to make a valid will, and the burden of proving the contrary rests upon those who allege that he lacked mental capacity. In the absence of proof a prior permanent insanity, it must be shown that the testator was of unsound mind at the time the will was executed in order to overcome the presumption of sanity.^[171]

Challenges to a Will based on the Will being the product of the testator’s insane delusion is a subset of a “sound mind” attack. To be of sound mind, the testator must have the ability to know the natural objects of his bounty, know the nature and extent of his property, and understand the consequences of making a will.^[172] The insane delusion grounds for setting aside a Will is a gap-filler where a testator may generally have testamentary capacity, but the disposition of the Will is driven by an insane delusion, a monomania.^[173] The first case upholding a challenge based on its provisions being the product of the testator’s insane delusion was the English case of Dew v. Clark.^[174] In that case, “the court held that the testator, as a general matter, had testamentary capacity. However, the court decided that the testator was insane on the subject of his daughter,” who he believed to be “the special property of Satan.”^[175]

Maryland common law adopts the monomania basis for voiding a Will: “But the law is settled in this State that when a testamentary disposition is the direct consequence and offspring of the testator’s delusion, which was calculated to pervert his judgment and control his will in respect to the disposition of his estate, the Court should hold that he did not possess testamentary capacity, although he may have been rational and sane on other subjects.:^[176]

Appeals from Orphans’ Court Final Decisions

Appeals to the Appellate Court of Maryland

As with final decisions of a circuit court, there is a direct appeal from an Orphans’ Court decision to the Appellate Court of Maryland:

MD Code, Courts and Judicial Proceedings, § 12-501

Appeals to Court of Special Appeals from final judgment of orphans’ court

Appeals to Court of Special Appeals

(a) A party may appeal to the Court of Special Appeals from a final judgment of an orphans’ court.

Final judgments given or made in summary proceedings

(b) However, if the final judgment was given or made in a summary proceeding, and on the testimony of witnesses, an appeal is not allowed under this section unless the party desiring to appeal immediately gives notice of the party’s intention to appeal and requests that the testimony be reduced to writing.

Testimony reduced to writing

The definition of “final judgment” in probate matters differs from that for litigation that produces a judgment in a court of general jurisdiction. A final judgment in litigation outside of probate “s the thing being sought from the outset of the action. It is the purpose of the litigants that the suit proceed to final judgment, and it is appropriate to let the appeal abide the final outcome of that litigation, so that all loose ends can be tied up in a single omnibus appeal.”^[177] Whereas the nature of Orphans’ Court proceedings is that the court might intervene, from time to time, to address discrete issues that arise during the extended process of administering an estate:

“The administration of an estate, by contrast, is a very different phenomenon. Ideally, as in administrative probate, there may be nothing that a judge need ever adjudicate. Even when the endeavor turns to judicial probate, moreover, the need for judicial adjudicative intervention is frequently intermittent and only on a very ad hoc basis. For much of its course, the process is allowed to go its own way outside the courtroom. Adjudication is sometimes an incident of the process, but it is by no means its generative purpose.

Because adjudicative decisions as to bits and pieces of the larger enterprise may be the only court judgments ever rendered, however, there is not the same expectation of an apocalyptic last judgment. Appeals from some, though not from all, of the adjudicative decisions taken along the way may be necessary in this fundamentally different legal environment. The two arenas are simply not the same.”^[178]

Thus, in a caveat proceeding, a refusal to grant an appellant’s issues as framed by the Orphans’ Court is final order, appealable to the Appellate Court of Maryland.^[179] The framed issues could dictate the outcome of the trial and are generally not able to be re-framed by the circuit court.^[180] In another instance, the issue of who should serve as the special administrator during a caveat proceeding was held as an appealable final order for purposes of the statute. ^[181] In that case, the Appellate Court of Maryland analogized its holding to fitting the “collateral order exception” to the general rule that appeal may only come at the end of the legal proceeding.^[182] Neither of these cases came at the end of the litigation yet were directly appealable as final orders. What is traditionally categorized as final orders would, of course, likewise be so appealable.

De Novo Appeals to the Circuit Court

Orphans’ Court decisions are also appealable to the circuit court. These appeals are de novo:

MD Code, Courts and Judicial Proceedings, § 12-502

Appeals to circuit court from final judgment of orphans’ court

Appeals to circuit court

(a)(1)(i) Instead of a direct appeal to the Court of Special Appeals under § 12-501 of this subtitle, a party may appeal to the circuit court for the county from a final judgment of an orphans’ court.

(ii) The appeal shall be heard de novo by the circuit court.

(iii) The de novo appeal shall be treated as if it were a new proceeding and as if there had never been a prior hearing or judgment by the orphans’ court.

(iv) The circuit court shall give judgment according to the equity of the matter.

(2) This subsection does not apply to Harford County, Howard County, or Montgomery County.

Time of appeal

(b)(1) An appeal under this section shall be taken by filing a notice of appeal with the register of wills within 30 days after the date of the final judgment from which the appeal is taken.

(2) Within 60 days after the filing of a notice of appeal under paragraph (1) of this subsection, the register of wills shall transmit all pleadings and orders of the proceedings to the court to which the appeal is taken, unless the orphans’ court from which the appeal is taken extends the time for transmitting these pleadings and orders.

The circuit court proceeding, per the statute, is de novo. Therefore, when a circuit court dismissed an appeal because the appellant failed to transmit the record of the hearing in the Orphans’ Court, it was reversed: “As we conclude the de novo hearing in this case is a new hearing requiring the appellate court to hear the case ab initio, and as we find Section 12-502 does not impose a duty to have the testimony written and filed with the court, we conclude that the trial judge erred in dismissing the appeal in this case.”^[183]

Because of the de novo aspect of the circuit court appeal, it is the proverbial “second bite at the apple.” This introduces tactical and cost issues for trial counsel to consider and discus with their clients.

Power of Attorney Litigation

Origin in Agency Law and Early Codification

A power of attorney is founded in agency law where an agent acts at the direction of the principal and the agency could be terminated at any time.^[184] Initially the agency relationship terminated when the agent became incompetent.^[185] Consequently, traditional powers of attorney had little utility for disability planning.

In 1954, Virginia enacted the first durable power of attorney act which became the prototype mimicked by other states.^[186] Virginia permitted a principal to create a power of attorney that survived incapacity by merely stating so in the instrument. Maryland and other states soon followed. Statutes began to authorize the agency as one to continue beyond the principal’s disability provided the instrument expressly provided.^[187] The initial power of attorney law made no attempt to define the nature of the duty of the agent when acting while the principal was unable to give directions. Instead, it was left to common law to establish the parameters of the power of attorney relationship.

Under Maryland common law, a power of attorney sets out the authority of the agent: “This instrument, which delineates the extent of the agent’s authority, is a contract of agency that creates a principal-agent relationship. [O]ne ‘well settled’ rule is that powers of attorney are ‘strictly construed as a general rule and [are] held to grant only those powers which are clearly delineated. [however] the rule of strict construction ‘cannot override the general and cardinal rule’ that the court determine the intention of the parties.” ^[188]

In King v. Bankerd, the Supreme Court of Maryland found the agent breach the fiduciary duty when agent (who happened to be an attorney) in a general power of attorney when agent gifted the property to the principal ‘s former spouse without having an explicit grant of the power to make gifts.^[189] This decision echoes the basic agency rule that an agent “is to affect the legal relations of the principal by acts done in accordance with the principal’s manifestations of consent to him.”^[190] In other words, the agent is to follow the principal’s direction.

The 2010 Act

In 2010, Maryland enacted The Maryland General and Limited Power of Attorney Act (POA Act) a more robust statute setting out more detail than simply relying the common law of agency.^[191] The POA Act is modeled on the Uniform Power of Attorney Act (“UPOAA”), with modification.^[192] Both the Uniform Power of Attorney Act and the Uniform Trust Code, state that the codifications were not meant to replace the common law and, unless specifically modified by either uniform act, the common law was to supplement its codification.^[193] Unlike the Maryland Trust Act that adopted the Uniform Trust Code provision addressing the relationship of the common law to it, the Maryland Power of Attorney Act is silent.^[194]

The POA Act no longer requires the instrument state that the agency survives the principal‘s disability and makes the power of attorney automatically durable unless otherwise indicated.^[195] Section 17-113 of the POA Act addresses the nature of the agent’s duties to the principal and defines the standard imposed on the agent.^[196] Although acceptance is not defined under the POA Act (it is under the UPOAA), the standard of care is imposed on the agent who has accepted the appointment.^[197]

The Fiduciary Relationship

The agent under a power of attorney is considered a fiduciary by the courts.^[198] A fiduciary owes fiduciary duties regardless of how the fiduciary relationship was established. The power of attorney, trustee, personal representative and guardian are all fiduciary relationships that are recognized in the estates and trust practice area. In addition, a fiduciary relationship can be established between any parties in a confidential relationship based on trust and reliance. The significance of the fiduciary relationship is that once the relationship is established the fiduciary duties of duty of care and duty of loyalty flow.

When that term is applied to the scope and character of a trustee’s obligations, there is much case law^[199], if not broad consensus, as to the meaning of what being a fiduciary entails. Until the enactment of the Maryland POA Act, however, the nature of the fiduciary owed by an agent acting under a power of attorney operated with less distinct guardrails.

The Agent’s Duties under the POA

The duties of the agent are broken into 1) mandatory duties and 2) optional duties which are those that can be avoided by using express language in the document waiving the duty.

Mandatory Duties

There are three mandatory duties with the first and third distinctly rooted in the agency law principles. The first listed duty is that the agent is to act in accordance with the principal’s reasonable expectation to the extent known by the agent (or if not known then to act in the principal’s best interest). The third listed duty is to act only within the scope of the authority granted in the power of attorney. These duties, considered separately or together, approximate the agency rule that the agent acts at the direction of the principal.^[200]

The other mandatory duty in the Maryland Act is to act with care and competence for the best interests of the principal. The UPOAA version does not have that an agent acts for the best interest of the principal unless the principal’s reasonable expectations are not known.^[201] It is possible, of course, that a principal may want an agent to take a certain act that is not in his or her best interest. The UPOAA is explicit in providing, assuming no violation of law is involved, that the agent must act at the principal’s direction. Maryland, on the other hand, adds ambiguity by introducing in the second enumerated mandatory duty the element of best interest separate from whether the principal’s expectations are known.^[202]

Default/Optional Duties

The optional provisions that can be modified by the power of attorney include two duties with distinct fiduciary characteristics. The agent must act loyally for the principal’s benefit.^[203] The corollary is that an agent should act “so as not to create a conflict of interest that impairs the agent’s ability to act impartially in the principal’s best interest.”^[204] These non-mandatory provisions are the equivalent of the traditional fiduciary duty under trust law. Another duty of the agent, unless otherwise modified by the instrument, is a duty to “preserve the principal’s estate plan, to the extent actually known by the agent, if preserving the plan is consistent with the principal’s best interest…”^[205] Both the Maryland version and that of the uniform act set out factors to consider when changes to the principal’s estate plan is reasonably modified.

The statute creates a set of duties, some of which are distinctly fiduciary in character. The Maryland statute does not have a provision like that of the Maryland Trust Act stating that the entire codification of the law of powers of attorney is supplemented by the common law and the principles of equity. The section setting out an agent’s duties, however, incorporates the common law: “This section may not be construed to reduce any duty of an agent to the principal under existing State law.”^[206]

Suits for Oversight/Enforcement of the Agent’s Actions

The Maryland Act and the UPOAA grant standing to petition the court to an expansive list of individuals to question the agent’s actions.^[207] The purpose for the expansive standing provisions is to protect incapacitated persons from financial abuse: “The primary purpose of this section is to protect vulnerable or incapacitated principals against financial abuse. Subsection (a) sets forth broad categories of persons who have standing to petition the court for construction of the power of attorney or review of the agent’s conduct, including in the list a “person that demonstrates sufficient interest in the principal’s welfare’”^[208] Causes of action to monitor or reverse actions by an agent are brought in the circuit court.^[209]

Although the ability to file a petition is granted to a broad group of persons with an interest in the affairs of the principal, that same group does not have the ability to informally demand accountings. An agent is only required to “disclose receipts, disbursements, or transactions conducted on behalf of the principal unless ordered by a court or requested by the principal, a guardian, a conservator, another fiduciary acting for the principal, a governmental agency having authority to protect the welfare of the principal, or, on the death of the principal, by the personal representative or successor in interest of the principal’s estate.”^[210] The more restrictive class of those who, without a court order, may demand an accounting is consistent with the agent’s common law duty to account to the principal expanded generally to those fiduciaries acting for the principal.

Evidentiary Considerations in Fiduciary Litigation

Extrinsic Evidence in Will Interpretation

The plain meaning rule excludes evidence of testator intent when interpreting a Will. Instead, the interpretation must rely on the “plain meaning” of the words in the document:

“That rule (the plain meaning rule), which hereafter we will call the “no-extrinsic-evidence-rule,” prescribes that courts not receive evidence about the testator’s intent “apart from, in addition to, or in opposition to the legal effect of the language which is used by him in the will itself.’”^[211]

The testator’s intent is held to govern Will interpretation, but it is that intent as expressed in the Will. Historically, however, the plain meaning rule was never as strict as it was often stated in academic writings. It was always subject to extrinsic evidence of the testator’s “surrounding circumstances.” The surrounding circumstances exception to the plain meaning rule pays tribute to the importance of context. The document is meant to be understood as the testator understood it: against the backdrop of his or her occupation, property holdings, and relationships with family and others.^[212] Thus, courts look to the particular circumstances of a decedent to ascertain the “plain meaning” of the words used: “If we put ourselves, in the traditional place, behind the armchair of the testator as he contemplates the disposition he wished to be made to the objects of his bounty, we would be standing behind a man who was not unaware of the problems and methods of early, as contrasted to late, vesting of trust estates and one upon whom had been urged the desirability of continuing property in trust.”^[213]

Although evidence of surrounding circumstances is applicable to trusts, the plain meaning rule does not dictate trust interpretation.

Extrinsic Evidence in Trust Interpretation

The MTA radically changed the common law evidentiary rule for testamentary trusts. Historically, the restrictions imposed by the plain meaning rule on the introduction of extrinsic evidence of intent did not apply to inter vivos trusts: “If the meaning of the writing is uncertain or ambiguous, evidence of the circumstances is admissible to determine its interpretation.”^[214] Such evidence is permitted to aid in the construction of the language of an inter vivos trust:

“Oral evidence will be received, however, to remove an ambiguity in the construction of the trust instrument by explanation of the meaning of the words therein, based on the situation of the parties and other facts. This principle [applies] . . . to private and charitable trusts.”^[215]

Indeed, in Maryland a trust of personalty may be created wholly by parol evidence.^[216] Under the Maryland Trust Act, oral trusts are recognized in some circumstances.^[217] A significant barrier to oral trust in land, of course, is the application of the Statute of Frauds: “Every corporeal estate, leasehold or freehold, or incorporeal interest in land created by parol and not in writing and signed by the party creating it, or his agent lawfully authorized by writing, has the force and effect of an estate or interest at will only, and has no other or greater force or effect, either in law or equity.”^[218]

Under prior Maryland common law, inter vivos trusts could be interpreted and modified by extrinsic evidence but not testamentary trusts. The general common law rule which was followed in Maryland: ” [T]he doctrine of (trust) reformation is ordinarily applicable only in cases … involving inter vivos trust instruments. Here we are confronted with a testamentary trust and … the general prohibition against reformation of a will would prevail.^[219]

This distinction was very artificial: a testamentary trust was controlled by the plain meaning rule but inter vivos trusts funded by a “pour-over” Will were free from the rule. After the death of a settlor, the beneficiary could press for a modification of an inter vivos trust due to mistake to the same degree that the settlor could have brought such an action for modification of an irrevocable inter vivos trust.^[220]

Testamentary and Inter Vivos Trusts Are Treated the Same

The MTA obliterates the distinction between testamentary and inter vivos trusts by making the Act applicable generally to all trusts without distinction.^[221] The Maryland Trust Act is “directed primarily at trusts that arise in the estate planning or other donative context.”^[222] The MTA applies to all trusts whether created before, on, or after the effective date of the statute other than judicial proceedings concerning trusts that were commenced prior to the effective date.^[223]

Extrinsic Evidence Can Contradict the Written Terms of a Trust

The Restatement (Third) of Property: Wills and Other Donative Transfers “disapprove[s]” of the plain meaning rule.^[224] Thus, section 12.1 (“Reforming Donative Documents to Correct Mistakes”) sets out its aspirational re-writing of the common law for both Wills and all trusts. The Restatement of Property would permit extrinsic evidence of settlor intent “to conform the text [of the will or testamentary trust] to donor’s intention” even if the text of the document is unambiguous:

“When a donative document is unambiguous, evidence suggesting that the terms of the document vary from intention is inherently suspect but possibly correct. The law deals with situations of inherently suspicious but possibly correct evidence in either of two ways. One is to exclude the evidence altogether, in effect denying a remedy in cases in which the evidence is genuine and persuasive. The other is to consider the evidence, but guard against giving effect to fraudulent or mistaken evidence by imposing an above-normal standard of proof. In choosing between exclusion and high-safeguard allowance of extrinsic evidence, this Restatement adopts the latter. Only high-safeguard allowance of extrinsic evidence achieves the primary objective of giving effect to the donor’s intention.”^[225]

The Uniform Trust Code§ 415, followed an approach similar to the aspirational provisions of the Restatement of Property:^[226]

Both under the aspirational standards of the Restatement (Third) of Property and the UTC there was imposed a “clear and convincing” standard to guard against fraudulent testimony. Maryland adopted Section 415 of the Uniform Trust Code as the Maryland Trust Act § 14.5-413. It is clear from the comments under the uniform act that it meant to abolish the plain meaning rule for testamentary trusts and accordingly made the proof issue the same for a testamentary trust as that for inter vivos trusts.

The UTC comment to Section 415 is clear that it is not simply a provision triggered when a trust provision is ambiguous, extrinsic evidence can be used to contradict the plain meaning of the trust: “Reformation is different from resolving an ambiguity: Resolving an ambiguity involves the interpretation of language already in the instrument; reformation, on the other hand, may involve the addition of language not originally in the instrument, or the deletion of language originally included by mistake, if necessary to conform the instrument to the settlor’s intent. Because reformation may involve the addition of language in the instrument, or the deletion of language that may appear clear on its face, reliance on extrinsic evidence is essential. To guard against the possibility of unreliable or contrived evidence in such a circumstance, the higher standard of clear and convincing proof is required. In determining the settlor’s original intent, the court may consider evidence relevant to the settlor’s intention even though it contradicts an apparent plain meaning of the text. The objective of the plain meaning rule, to protect against fraudulent testimony, is satisfied by the requirement of clear and convincing proof.”^[227]

Thus, for both testamentary and inter vivos trusts the unambiguous language of the instrument may not necessarily govern the meaning of a trust provision.

Md. Code, Estates and Trusts § 14.5-413

Reformation of terms by court

The court may reform the terms of a trust, even if unambiguous, to conform the terms to the intention of the settlor if it is proved by clear and convincing evidence that both the intent of the settlor and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement^[228]

The Dead Man’s Statute

In General

Dead Man’s Statutes have been widely disapproved by scholars and judges.^[229] Indeed, most jurisdictions have abandoned the dead man’s statute.^[230] Nevertheless these statutes continue, in some form, in over one-third of U.S. jurisdictions. Maryland is one of the states that have retained the Dead Man’s Statute.

MD Code, Courts and Judicial Proceedings

9-116. Transactions or statements made by deceased or incompetent persons

A party to a proceeding by or against a personal representative, heir, devisee, distribute, or legatee as such, in which a judgment or decree may be rendered for or against them, or by or against an incompetent person, may not testify concerning any transaction with or statement made by the dead or incompetent person, personally or through an agent since dead, unless called to testify by the opposite party, or unless the testimony of the dead or incompetent person has been given already in evidence in the same proceeding concerning the same transaction or statement.^[231]

The purpose of the Dead Man’s Rule was to protect courts from false statements. At early common law, an interested party – one with a stake in the outcome of the proceedings – was viewed as inherently untrustworthy and therefore was rendered incompetent to testify. This disqualification covered any witness with a pecuniary interest in a matter, not just matters involving a decedent’s estate: “The theory of disqualification by interest was merely one variety of the general theory which underlay the extensive rules of incompetency at common law. It was reducible in its essence to a syllogism, both premises of which, though they may now seem fallacious enough, were accepted in the 1700s as axioms of truth: Total exclusion from the stand is the proper safeguard against a false decision, whenever the persons offered are of a class specially likely to speak falsely; persons having a pecuniary interest in the event of the cause are specially likely to speak falsely; therefore such persons should be totally excluded.”^[232]

The broader disqualification of any witness with a pecuniary or other interest in all save a few well-defined cases was removed by the Maryland Evidence Act of 1864.^[233] That Act, however, retained the interest disqualification “‘Where an original party to a contract or cause of action is dead, or shown to be lunatic or insane, or where an executor or administrator is a party to the suit, action, or other proceeding, either party may be called as a witness by his opponent, will not be permitted to testify on his offer, or upon the call of his co-plaintiff or co-defendant, otherwise then now by law allowed, unless a nominal party merely.'”^[234] The modern view assumes witness competency and the Dead Man’s Statute is an exception that has been interpreted narrowly.^[235]

The Application of the Dead Man’s Statute in Maryland

The Maryland courts narrowly interpret the Dead Man Statute to permit as much evidence as the law provides. This is based on an understanding that the application of the rule can be unfair:

“’Most commentators agree that the expedient of refusing [to] listen to the survivor is, in the words of Bentham, a ‘blind and brainless’ technique. In seeking to avoid injustice to one side, the statute-makers have ignored the equal possibility of creating injustice to the other. The temptation to the survivor to fabricate a claim or defense is obvious enough, so obvious indeed that any jury will realize that his story must be cautiously heard.”^[236]

In keeping with this general approach, the Maryland courts have restricted the Dead Man’s Statute to situations that would “‘tend to increase or diminish the estate of a decedent by establishing or defeating a cause of action by or against the estate.'”^[237]

Because of this all-important limitation, the remedy or relief sought by a party is a critical component of any Dead Man’s Statute analysis. The testimony of caveators and caveatees about statements made by the decedent, for example, is permitted because such testimony will not result in a judgment at law against the estate.^[238] In an action challenging the appointment of an estate’s personal representative on the basis of his status as a creditor to the decedent, the court held that the creditor could testify to his dealings with the decedent to establish that he was such a creditor. The court reasoned that, while the testimony was proper in a proceeding as to the correctness of his appointment, he would nevertheless encounter great evidentiary challenges when he thereafter tried to establish his claim for the purpose of asserting it against the estate.^[239]

Close analysis of the relief or remedy sought is required in cases dealing with non-probate assets. For example, the Dead Man’s Statute will not apply in a dispute over the proper payee of life insurance proceeds if the judgment would not result in the estate receiving the life insurance proceeds.^[240] However, if the judgment would result in the life insurance proceeds being payable to the decedent’s estate, the Dead Man’s Statute would apply. This wrinkle has thorny consequences in cases where multiple non-probate arrangements (e.g. life estate deeds, revocable trusts, beneficiary designations) are challenged on the same substantive grounds, but the effect of invalidating such arrangements may result in some but not all of the assets reverting to the decedent’s estate. In such a case, it may be necessary to provide a limiting instruction or sever the trial under Rule 2-503(b) to comply with the limitations imposed by the Dead Man’s Statute.^[241]

Applicability to Testimony Regarding “Transactions”

In addition to applying to “statements,” the Maryland Dead Man’s Statute also prohibits evidence of “transaction with” the decedent. Maryland courts have limited the definition of “transaction” to include only testimony that the decedent could contradict with his or her own knowledge, if he or she were living.^[242] In some cases, this interpretation means that the scope of a “transaction” for Dead Man’s Statute purposes will be broader than the common definition of “transaction.” For example, a party could not testify as to her understanding that she was to be reimbursed by the decedent for funds the party advanced to an attorney on behalf of the decedent.^[243] This was because the decedent, if alive, could have contradicted the party’s testimony. This was the case even though the party was not, in a conventional sense, purchasing or procuring anything from the decedent.

The Dead Man’s Statute does not, however, bar admission of all testimony or documentary evidence that relates in any way to a “transaction.” A party could introduce letters from a decedent that related to the purported transaction at issue, even if the party could not testify as to the transaction itself or any statement made by the decedent.^[244] A party whose testimony is subject to the Dead Man’s Statute can, for example, testify about payments made to third parties, but cannot testify that such payments were made pursuant to an agreement with the decedent.^[245] In both cases, the decedent could not contradict the evidence at issue based on his or her own knowledge, so the evidence was not barred by the Dead Man’s Statute.

Express Statutory Limitations – “Testimony” and “Parties”

The express statutory language places two additional limitations on the Maryland Dead Man’s Statute. The statute applies only to testimony from parties to the action (or those with a direct pecuniary or proprietary interest in the outcome of the litigation). Testimony from individuals who are neither formal parties nor real parties in interest will not fall within the scope of the Dead Man’s Statute.^{^[246]}

Although no case law on point, it would similarly seem that non-testimonial evidence obtained from a party to an action would similarly not be barred by the Dead Man’s Statute. While answers to interrogatories and deposition testimony are given under the penalty of perjury and are therefore testimonial in nature, the Dead Man’s Statute does not purport to apply to evidence admissible without testimony from a party. For example, an admission of fact obtained from a party under Rule 2-424 is not “testimony,” per se (unlike interrogatories or deposition testimony, Rule 2-424 does not require responses to requests for admissions to be signed under oath). In fact, that Rule arguably anticipates that admissions may be used to establish facts that would otherwise be admissible only through non-party testimony. Consequently, admissions obtained under Rule 2-424 may be one “workaround” to the Dead Man’s Statute’s bar on testimony.

Waiver

Like many other evidentiary rules, the Dead Man’s Statute can be waived. The Dead Man’s Statute does not bar testimony when the party offering such testimony is “called to testify by the opposite party” or if “the testimony of the dead or incompetent person has been given already in evidence in the same proceeding concerning the same transaction or statement.”

Maryland courts have stated that the Dead Man’s Statute is not waived by calling a party to testify as to otherwise-forbidden matters in discovery. For example, testimony otherwise barred by the Dead Man’s Statute can be elicited in a deposition or by interrogatories without resulting in a waiver.^[247] However, a litigant who relies upon his opponent’s interrogatory answers or deposition testimony that would otherwise be barred by the Dead Man’s Statute—for example, by submitting such discovery material into evidence or incorporating it into a motion for summary judgment— likely waives the Dead Man’s Statute, although there is not (yet) a published Maryland decision on point.^[248]

The Hearsay Rule

History/Rationale of the State of Mind/Intent Exception to the Rule

“Hearsay” is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted. Hearsay is not admissible “except as otherwise provided by” the Maryland Rules or constitutional or statutory provisions.^[249]

The Maryland hearsay rules, as with the Maryland evidentiary rules in general, track the Federal Rules of Evidence.^[250] In practice, the exceptions to the hearsay rule make a huge amount of hearsay admissible: “Rule 803 [tracked by Md. Rule 5-803], 23 exceptions which may be invoked even though the hearsay declarant is available. 804(b) [tracked by Md. Rule 5-804], four exceptions, which may be invoked only when the hearsay declarant is unavailable. In addition to the foregoing, any other hearsay will be admissible if it tends to prove an important fact, if it’s better than any other evidence that’s available, if it has indicia of reliability, and you give the other side due notice.”^[251]

Md. Rule 5-803 (b)(3) (Hearsay exceptions: unavailability of declarant not required) states:

“(3) Then Existing Mental, Emotional, or Physical Condition. A statement of the declarant’s then existing state of mind, emotion, sensation, or physical condition (such as intent, plan, motive, design, mental feeling, pain, and bodily health), offered to prove the declarant’s then existing condition or the declarant’s future action, but not including a statement of memory or belief to prove the fact remembered or believed unless it relates to the execution, revocation, identification, or terms of declarant’s will.”^[252]

This is a true exception: it permits a third party to testify as to what the declarant said about his or her plan or intention, including in the case of testamentary documents, a memory or belief about what the declarant intended by a then-existing document. This exception ought to be equally applicable to a trust being used as a Will substitute with testamentary type provisions.^[253]

Maryland Rule 5-803 (b) (3) and Federal Rule of Evidence 803(3) are informed by two early Supreme Court cases, neither relating to wills or trusts. Those cases, however, explain why the Rule has its tortured syntax (“but not including…unless it relates to…”).

The first case, Mutual Life Ins. Co. v. Hillmon,^[254] established a broad exception to permit hearsay as to statements made by a decedent as to something that person planned to do in the future to prove, or tend to prove, that the person did exactly what he or she said that he or she would do. Hillmon was an insurance fraud case where a woman claimed her husband died in a certain remote location thereby entitling her to the death benefits from several policies. The insurance company acknowledged that someone had, in fact, died in that remote location but that it was not Mr. Hillmon but a Mr. Walter. As evidence, the insurance company wanted to introduce letters from Mr. Walter saying he planned to go to that remote location with Mr. Hillmon. The evidence was held admissible to demonstrate that Mr. Walter probably went to the remote location – a very broad exception to the hearsay rule.^[255]

The second case, Shepard v. U.S.,^[256] involved a murder trial where the defendant, Dr. Shepard, was charged with poisoning his wife. The evidence sought to be used was the testimony of the deceased wife who said that she had some liquor from a bottle immediately before she became ill that tasted odd and, further, that “Dr. Shepard has poisoned me.” These statements were inadmissible: “Declarations, of intention, casting light upon the future, have been sharply distinguished from declarations of memory, pointing backwards to the past. There would be an end, or nearly that, to the rule against hearsay if this distinction were ignored.”^[257]

The Hillmon situation involved a forward-looking statement of intent: Mr. Walter said he was going somewhere, so he probably went there after making the statement. Evidence Rule 803(3) carves out these forward-looking statements of intent as a general hearsay rule exception, not just an exception because the statement relates to a testamentary instrument. Nevertheless, the general exception applies to what a testator wanted to accomplish in the Will. ^[258]

Regardless of the fear of backward-looking declarations of memory, backward-looking declarations of intent if these declarations relate to the terms of the declarant’s Will are permitted. This is at variance to the Shepard-type prohibition which may well end the hearsay exception as to a testator’s statements. Backward-looking statements related to the declarant’s Will were carved out based on expediency: “The carving out, from the exclusion mentioned in the preceding paragraph (the anti-backward looking declarations) , of declarations related to the execution, revocation, identification, or terms of the declarant’s will represents an ad hoc judgment which finds ample reinforcement in the decisions, resting on practical grounds of necessity and expediency rather than logic.”^[259]

Backward-Looking Application of the Hearsay Rule

A Maryland case illustrates the backward-looking element of Md. Rule 5-803 (b)(3) and how statements by a testatrix after execution of a will may be admissible to show how she meant the will to be interpreted. National Society of Daughters of American Revolution v. Goodman^[260] involved whether a restricted gift to the D.A.R. for the purpose of funding its nursing home facility lapsed because the D.A.R., in fact, did not maintain any nursing homes. The decedent had prepared a will leaving part of her estate to Gallaudet University and part of her estate to the D.A.R. for the nursing home. After execution, the attorney contacted D.A.R. to discuss the gift and learned that the D.A.R. did not maintain a nursing home. He thereupon contacted his client who said that she did not intend any gift to go to the D.A.R. in that situation but all to Gallaudet University. The attorney prepared a new Will but his client died before she was able to execute the new Will. Nevertheless, the testimony was permitted as a backward-looking declaration of what she intended by her original Will.

Another Maryland case followed suit. In Yivo Institute for Jewish Research v. Zalenski,^[261] the decedent left a bequest in his Will to a charity and then he later made a gift to the same institution. The issue was whether the subsequent gift adeemed the bequest in the Will. The testimony sought to be excluded was that of a friend who said that the decedent declared years after making the subsequent charitable gift, that he did not need to change his Will because the charitable institution would understand that the gift that he had made was adeeming the bequest in the Will. Such testimony was admitted.^[262]

In another backward looking case, the decedent executed account documents adding his brother as a joint owner on several of his bank accounts. There was a dispute over whether the bank accounts belonged to the estate or passed to the brother as a joint owner by right of survivorship (this case preceded enactment Maryland’s multiple-party account statute, Fin. Inst. § 1-204, which creates a presumption that the funds pass to the joint owner). At issue was the admissibility of testimony from witnesses to the effect that some time after processing the account changes the decedent had told them that he had “put his brother on the accounts to pay the bills and take care of things” and then the decedent’s children could “divide up the estate.” The Court determined that the statement was of the declarant’s then existing state of mind and therefore was admissible.^[263]

Many statements embraced by the Rule 5-803(b)(3) “exception” are not truly hearsay to begin, or at least do not implicate many of the underlying concerns addressed by the hearsay rule—namely, the fact-finder’s lack of ability to evaluate the declarant’s testimonial capacities. A statement of the declarant’s present state of mind may, for example, be the ultimate operative legal fact (e.g. was a transfer intended by the declarant to be gratuitous?), meaning that the statement will be the primary source of evidence.^[264] Statements of the declarant’s present state of mind are not being filtered through a third party unavailable for examination.

The General “Requirement” of Future Action (Or: When is Inaction an Action?)

The Hillmon case and its progeny stand for the principle that a statement of intent to accomplish something in the future is only admissible if used to prove a subsequent action in conformity with the statement of intent. A forward-looking statement of intent cannot be used when the declarant’s future actions are contradictory.

However, the Yivo case implies that a failure to take action can itself be “action” consistent with a stated intention or plan. In that case, the decedent did not take action to revise his Will because he believed that the charity would understand that his inter vivos gift adeemed the legacy in the Will. ^[265]

There is no “corroboration” requirement—i.e., there is no requirement to prove that the future action have been completed by the declarant.^[266]

The general Maryland rule, however, is that the declarant is the one who takes the future action (or in the Yivo situation, the future non-action): “In all of the forward-looking uses of a present intent to prove a future act or to interpret a future act, there is the identity of person between the hearsay declarant and the future actor. Although some states permit a declarant’s statement of intent to prove not only the declarant’s future action pursuant to that intent but the future action of another person as well, Maryland does not.”^[267] The required linkage between the declarant and the subsequent action was demonstrated when a daughter unsuccessfully sought to introduce testimony from father’s attorney that father had told the attorney that he would like to transfer a property to the daughter. The purpose of introducing this statement was to prove that when this transfer was later effectuated (by the daughter to herself, under a power of attorney), it had been directed by the father. Because the father never took the future action of executing a deed, the testimony was deemed “immaterial because, whatever he may have intended to do, he never did it. The Father’s intention, moreover, is not admissible to prove what someone else may have done.” ^[268]

The purpose of the forward-looking statement of intent exception is to explain that future action. In a case, the plaintiffs alleged that they were promised a bequest in a Will because of numerous household chores they provided the testator. No such bequest, however, was made by the testator in his Will. The testimony of that the testator orally made such a promise was held inadmissible hearsay because it was not offered to explain future conduct because no future action occurred.^[269]

An outlier of the forward-looking statement of intent involved a dispute among siblings about where their mother wished to be buried at her death.^[270] The majority of the siblings believed that she wanted to be buried in Montgomery County where she lived for many years and closest to where the majority of her children lived. Other siblings believed that she wished to be buried where her husband and one child was buried. The siblings arguing for Israel burial presented a written statement purportedly dictated by their mother stating her intention to be buried in Israel and sought to testify as to their mother’s oral statements that she wished to be buried in Israel. The trial court ruled against the proffered evidence as hearsay. The Appellate Court ruled that the testimony should have been admitted based on Maryland Rule 5-803(b)(3). In reaching its decision, the Court recognized that cases admitting forward-looking statements is generally linked with the intent of the declarant to act in the future: “Because the disposition of a person’s body after death is normally accomplished by persons other than the deceased, statements that a person may make regarding wishes for final disposition are more in the nature of desires than intent.” ^[271] Nevertheless, the Court ruled for admissibility based primarily on its reliability: “[T]here is probably no better evidence of her state of mind with respect to her burial wishes than her own statements on that subject.”^[272]

Other Exceptions to the Hearsay Rule

a. Statements for Purposes of Medical Diagnosis or Treatment (Md. Rule 5-803(b)(4)):

“Statements made for purposes of medical treatment or medical diagnosis in contemplation of treatment and describing medical history, or past or present symptoms, pain, or sensation, or the inception or general character of the cause or external sources thereof insofar as reasonably pertinent to treatment or diagnosis in contemplation of treatment.”

b. Records of Regularly Conducted Business Activity (Md. Rule 5-803(b)(6)):

“A memorandum, report, record, or data compilation of acts, events, conditions, opinions, or diagnoses if (A) it was made at or near the time of the act, event, or condition, or the rendition of the diagnosis, (B) it was made by a person with knowledge or from information transmitted by a person with knowledge, (C) it was made and kept in the course of a regularly conducted business activity, and (D) the regular practice of that business was to make and keep the memorandum, report, record, or data compilation. A record of this kind may be excluded if the source of information or the method or circumstances of the preparation of the record indicate that the information in the record lacks trustworthiness. In this paragraph, “business” includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.”

Under Rule 5-902(b), no testimony of authenticity is required to introduce records under the business records exception if a certificate of custodian of records is completed and the certificate, records, notice of the intention to introduce the records under Rule 5-803(b)(6) is given to the adverse party at least 10 days prior to the proceeding. The adverse party has 5 days to object based on lack of trustworthiness in preparation of the records.

The Rules contain many exceptions that are potentially applicable in estate & trust cases—e.g. statements in ancient documents (Rule 5-803(b)(16)) and the residual exception (Rule 5-803(b)(24)).

End Note

Fiduciary duty and breach of those duties characterize much of the litigation related to the law of estates and trusts. It defines the relationship of trustee/beneficiary, principal/agent, personal representative/legatee and heir, and others.^[273] Each form of the fiduciary relationship “reflects the legal principles of the substantive area of law in which it has developed.”^[274] Regardless of the setting within which the duty arises and the statutory and common law variations informing each relationship, “one characteristic is common to all: a person in a fiduciary relationship to another is under a duty to act for the benefit of the other as to matters within the scope of the relationship.”^[275]

The most often cited description of the unique, indeed moralistic, degree of loyalty owed by a fiduciary was from Justice Cardozo while a New York appellate judge:

“Many forms of conduct permissible in a workaday world for those operating at arm’s length are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the marketplace. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior.” ^[276]

The moralistic aspect of fiduciary duty reflects its origin. The law of trust arose in the fourteenth century: the “ancestor of the modern trust (the feoffment to uses), enjoyed a popularity at least from the reign of Edward III (1327-1377).”^[277] Originally, enforcement of uses fell to the courts of the Church of England which used canon law to regulate the conduct of the trustee (the feoffee).^[278] In the fifteenth century, Chancery took over the role of enforcing these antecedents to the modern trust.^[279] The evolution from the ecclesiastic courts to Chancery carried forward the application of canon law based norms to the Equity Courts.^[280] Presumably, these ecclesiastic origins count, at least in part, for the moralistic overlay that informs the fiduciary duty of trustees.^[281]

These heightened obligations imposed by fiduciary duty underpin the litigation related to estates and trusts.

[1] Franke Beckett, LLC is an Annapolis, Maryland estates and trusts law firm. Within that practice niche, the Firm “does it all” – estate planning, estate/trust administration, and fiduciary litigation. We find that there is an important relationship among all facets of a broad estates and trusts practice that strengthens the quality of each lawyer’s advice. Whether we are advising clients related to creating a comprehensive estate plan with challenging family situations, to use trusts for tax planning, creating trusts asset protection purposes for their heirs, or advising clients regarding closely held family businesses, the Firm brings a broad perspective to our estate planning advice. Similarly, our litigation practice benefits from the Firm engaging in an extensive estate planning practice and from our estate/trust administration engagements for clients. We constantly try cases at the trial court level and litigate appeals before the Maryland appellate courts. We bring the deep knowledge of estates, trusts, and the law governing fiduciaries to this litigation.

[2] Restatement (Second) of Trusts, § 2 cmt. b.

[3] Md. Code Ann., Est. & Trusts § 14.5-901 (Breaches of trust by trustee) Title 14.5 of the Maryland Estates and Trusts Article will be cited as the Maryland Trust Act or, abbreviated as the MTA; MTA § 14.5-101 (Maryland Trust Act) (“This title may be cited as the Maryland Trust Act.”)

[4] Md. Code Ann., Est. & Trusts § 7-403 (Breach of fiduciary duty).

[5] See below at Section III for a discussion of the nature of that relationship.

[6] The robust fiduciary duty historically owed by partners to each other is limited by the Revised Uniform Partnership Act adopted in Maryland in 1998. See MD Code, Corporations and Associations, § 9A-404 (General standards of partner’s conduct); Frederick R. Franke, Jr., Resisting the Contractarian Insurgency: The Uniform Trust Code, Fiduciary Duty, and Good Faith in Contract, 36 ACTEC L. J. 517, 539 (2010) (“The 1997 Revised Uniform Partnership Act and the 2001 Revised Uniform Limited Partnership Act, however, move away from a reliance on this broad fiduciary duty to regulate partner conduct. Instead, these Acts each limit fiduciary duty to a duty of loyalty, which is further limited (‘cabined’) to specific conduct instead of being a general concept tailored by courts to cover a broad array of impermissible conduct.”); Clancy v. King, 405 Md. 541, 954 A.2d 1092 (2008).

[7] Mekhaya v. Eastland Food Corp.,256 Md. App. 497, 527-8 (2022): “To establish a claim for breach of fiduciary duty, a plaintiff must show: (i) the existence of a fiduciary relationship; (ii) breach of the duty owed by the fiduciary to the beneficiary; and (iii) harm to the beneficiary. Directors and officers of a corporation have generally a fiduciary duty to the corporation and its shareholders.”) (Cleaned up); Fiduciary duty as a defining attribute of corporate governance is deeply rooted in law, see: A.A. Berle, Jr., Corporate Powers as Powers in Trust, 44 HARV. L. REV. 1049 (1931) (All corporate action must be measured “by equitable rules somewhat analogous to those which apply in favor of the cestui que trust to the trustee’s exercise of wide powers granted to him in the instrument making him a fiduciary.”)

[8] Although challenges to the validity of Wills (“caveats”) are not strictly speaking litigation against fiduciaries, it will be touched upon in Section III because of the frequency of Will challenges in an estates and trusts litigation practice. .

[9] Oliver Wendell Holmes, Jr., The Common Law, Lecture I-Early Forms of Liability (Project Gutenberg 2000, www.gutenberg.org).

[10] Literally the common law of trusts developed over a span of centuries. Trust law has ancient antecedents. It arose in the fourteenth century: the “ancestor of the modern trust (the feoffment to uses), enjoyed a popularity at least from the reign of Edward III (1327-1377).” R. H. Helmholz, The Early Enforcement of Uses, 79 COLUM. L. REV. 1503 (1979).

[11] Md. Code Ann. Est. & Trusts § 14.5-106 (Common law of trusts and principles of equity): “The common law of trusts and principles of equity supplement this title, except to the extent modified by this title or another statute of this State.” This provision parallels Unform Trust Code (UTC) § 106.

[12] The Reporter for the Uniform Trust Code addressed the relationship that the UTC was meant to have with the existing body of Common Law: “[E]fforts to reduce rules to writing will result in excess rigidity and insufficient discretion vested in the Courts to adapt to changing conditions. Even on issues that drafters have elected to codify, the UTC, in many cases, does not specify every detail, the drafters preferring flexibility and brevity to greater precision.” David M. English, The Uniform Trust Code (2000): Significant Provisions and Policy Issues, 67 Mo. L. Rev. 143-144 (2002). This sentiment, of course, mirrors that of Justice Holmes in his celebration of the common law.

[13] Used in these materials, a “trust” means a private express trust. It does not include “resulting” or “constructive” trusts.

[14] Restatement (Second) of Trusts § 2 (1959).

[15] George G. Bogert and George T. Bogert, The Law of Trusts and Trustees, § 1 (rev. 2d ed. 1982).

[16] Md. Code Ann., Est. & TRUSTS § 14.5-103 (aa) (Definitions – terms of a trust). This definition is consistent with the definition in each of the three Restatements. See Restatement (Third) of Trusts § 4 (2003). The MTA adopts much, but not all, of the provisions of the UTC which, in turn, is informed by the Restatement (Third) of Trusts.

[17] Md. Code Ann., Est. & Trusts § 14.5-413 (Reformation of terms by court). UTC § 415.

[18] See footnotes 10 and 11.

[19] John H. Langbein, The Contractarian Basis of the Law of Trusts, 105 Yale L.J. 625, 655-6 (1995).

[20] George G. Bogert, George T. Bogert, Amy M. Hess, and Susan Gary, Bogert’s The Law of Trusts and Trustees, § 541 (2022 Update).

[21] Id. Also note that Professor Langbein uses the terms interchangeably: “Fiduciary law imposes two broad standards, loyalty and care, that regulate the exercise of the discretion that modern trustees’ powers law bestows.” Langbein, Contractarian at 642.

[22] Karen E. Boxx, Of Punctilios and Paybacks: The Duty of Loyalty Under the Uniform Trust Code, 67 Mo. L. Rev. 279, 280 (2002) (“The duty of loyalty has been called ‘the essence of the fiduciary relationship’ and even has been considered an expression synonymous with fiduciary.”).

[23] Langbein, Contractarian, supra note 14, at 655. Md. Code Ann., Est. & Trusts § 14.5-802 (a) (Administration of trust solely in interests of beneficiaries): “A trustee shall administer the trust solely in the interests of the beneficiaries.”

[24] Langbein, Contractarian, id..

[25] These are attorney disbarment cases. These cases would seem more properly characterized as acts of theft than breaches of a trustee’s duty of loyalty. The Maryland Supreme Court, however, recited treatises and case law to rebut the legitimacy of any argument that taking money from a deceased or incapacitated client as a trustee could be justified by the law of trusts. Attorney Grievance Com’n of Maryland v. Hodes, 441 Md. 136 (2014); Attorney Grievance Com’n of Maryland v. Owrutsky, 322 Md. 334 (1991). These cases were decided when the highest appellate court of Maryland was known as the Court of Appeals. On December 14, 2022 the name of the Court was changed to the Supreme Court of Maryland.

[26] Board of Trustees of Employees’ Retirement System of City of Baltimore v. Mayor and City Council of Baltimore City, 317 Md. 72, 109 (1989).

[27] Id. at 109-10: “[W]e do not believe that a trustee necessarily violates the duty of loyalty by considering the social consequences of investment decisions. If, as in this case, the costs of considering such consequences are de minimis, the trustee ordinarily will not have transgressed that duty.”

[28] This exception to the “sole interest” rule is codified at MD Code, Estates and Trusts, § 14.5-802 (b) (1), discussed below.

[29] Goldman v. Rubin, 292 Md. 693(1982).

[30] The personal representatives, in that capacity, was also the majority shareholder of the closely held corporation at issue in the case, so “[c]onsequently their fiduciary duties to the legatees, as legatees, apply not only to the administration of the testamentary estate, but also to their action as directors of the buyer in the redemption transaction.” Id. at 704-5.

[31] Goldman v. Rubin, id at 708-714.

[32] UTC § 802 (Duty of Loyalty); MTA § 14.5-802 (Administration of Trust Solely in Interests of Beneficiaries).

[33] UTC § 802, Comment.

[34]The RESTATEMENT (SECOND), TRUSTS (1959), § 187 (Control of Discretionary Powers) Cmt. (j).

[35] Edward C. Halbach, Jr., Problems of Discretion in Discretionary Trusts, 61 Columbia L. Rev. 1425, 1430-1 (1961).

[36] The MTA specifically addresses the issue of court review of discretionary distributions when a settlor grants extended discretion to the trustee. MTA §14.5-203 (Determination of benefits of beneficiaries) provides notwithstanding extended discretion, an abuse of that discretion occurs if the trustee “Acts beyond the bounds of reasonable judgment.”

[37] Langbein, Contractarian, supra note 18, at 655 (Cleaned up). According to Professor Langbein the duty of prudence or care includes a subset of obligations: “[F]or example, the duties to keep and render accounts, to furnish information, to invest or preserve trust assets and make them productive, to enforce and defend claims, to diversify investments, and to minimize costs.” Langbein, Contractarian, supra note 18, at 656. Thus the ability of a court to oversee all of these functions is tied to a reasonable person standard.

[38] Md. Code Ann., Est. & Trusts § 14.5-804. This is derived from the Uniform Trust Code § 804. In Maryland, corporate trustees must follow the Prudent Investor Rule. Md. Code Ann., Est. & Trusts §15-114. That rule, however, only applies to a fiduciary who is a trust company, an investment advisor controlled by a trust company. Others may elect into the statute. The prudent investor rule, based on the modern portfolio theory, is spelled out in its statute and emphasizes diversification. Arguably, as discussed below, the way the Maryland Trust Act and the UTC describe the prudent person standard embraces the management of a portfolio as a whole and thus converges on the prudent investor rule. Also see Board of Trustees of Employees’ Retirement System of City of Baltimore v. Mayor and City Council of Baltimore City, 317 Md. 72, 104 (1989) (“the Ordinances permit the Trustees to construct an almost perfectly diversified portfolio, one that accurately matches the market as a whole in all respects except the size of the companies in which the pension systems invest.”) which seems to suggest the Prudent Investor Rule although the Maryland statute was not enacted until 1994.

[39] Harvard College v. Amory, 26 Mass. (9 Pick.) 446 (1830). Harvard College v. Amory, 26 Mass. (9 Pick.) 446 (1830).

[40] Jeffrey N. Gordon, The Puzzling Persistence of the Constrained Prudent Man Rule, 62 N.Y.U. L. Rev. 52, 66-7 (1987) (“The principle underlining … subsequent judicial analysis, is a particular idea of safety: only if each investment is safe, measured in isolation, will the collection of investments (the portfolio) be safe.”).

[41] Uniform Trust Code § 804. Although by using the phrase “a prudent person,” the provision obviously is invoking the prudent person standard. The Comment to § 804, however, notes that it mirrors Section 2(a) of the Uniform Prudent Investor Act. The Comment to that section states: “The prudence standard for trust investing traces back to Harvard College v. Amory, 26 Mass. (9 Pick.) 446 (1830). Trustees should ‘observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested.’”

[42] Md. Code Ann., Est. & Trusts § 14.5-804 (Prudent person standard applied to administration of trust). Uniform Trust Code § 804.

[43] Melanie B. Leslie, Common Law, Common Sense: Fiduciary Standards and Trustee Identity, 27 Cardozo L. Rev. 2713-29 (2006) vs. Karen E. Boxx, Distinguishing Trustees and Protecting Beneficiaries: A Response to Professor Leslie, 27 Cardozo L. Rev. 2753, 2756-61 (2006).

[44] Md. Code Ann., Est. & Trusts § 14.5-806 (“Special skills or expertise of trustee”). Uniform Trust Code § 806. These provisions are lockstep with the Restatement (Third) of Trusts § 77 (Duty of Prudence), cmt. on subsection 3: “It follows from the requirement of care, as well as from sound policy, that if the trustee actually possesses a degree of skill greater than that of an individual of ordinary intelligence, the trustee has a duty to make use of that skill, and is ordinarily liable for a loss that results from failure to do so.” (Cleaned up).

[45] Woods v. Fuller, 61 Md. 457, 459, 1884 WL 5922 (1884). Quoted in Kann v. Kann, 344 Md. 689, 701, 690 A.2d 509, 515 (1997).

[46] 3 A.W. Scott & W.F. Fratcher, The Law of Trusts § 197, at 188 (4th ed. 1988).

[47] Id. § 197.1, at 189.

[48] Id. at 190 (footnote omitted).

[49] George G. Bogert, George T. Bogert, and Amy M. Hess, Bogert’s The Law of Trusts and Trustees, § 870 (Jurisdiction to enforce trust- actions available) (June 2022).

[50] Kann v. Kann, 344 Md. 689, 703 (1997). The exception is when the trustee owes a fixed amount, in which case a action at law is appropriate. Nelson v. Howard, 5 Md. 327, 331, 1854 WL 3384 (1854); Restatement (Second) of Trusts § 198 (1987) (“If the trustee is under a duty to pay money immediately and unconditionally to the beneficiary … If the trustee of a chattel is under a duty to transfer it immediately and unconditionally to the beneficiary …”).

[51] Restatement (Second) of Torts § 874 (1977) (“One standing in a fiduciary relation with another is subject to liability to the other for harm resulting from a breach of duty imposed by the relation.”).

[52] Hartlove v. Maryland School of the Blind, 111 Md. App. 310, 331-4 (1996). The Hartlove Court, however largely sidestepped the issue as not being preserved for the appeal. The Hartlove decision is a pre-December 14, 2022 case before the then Court of Special Appeals became known as the Appellate Court of Maryland.

[53] Kann v. Kann, 344 Md. 689, 713 (1997). The Kann Court “disapproved” of the reasoning of the Hartlove Court and vacated and remanded it. Hartlove v. Maryland School of the Blind, 344 Md. 720 (1997).

[54] Kevin F. Arthur, Breach of Fiduciary Duty: a Cause of Action in Maryland?, Federal Bar Association Maryland Chapter Newsletter (March 2013) as quoted in Plank v. Cherneski, 469 Md. 548, 598 (2020). The Plank Court characterized Judge Arthur’s explanation as follows: “Prior to his appointment to the bench, Judge Kevin Arthur perhaps best summarized the confusion arising from Kann in an article published in the Federal Bar Association Newsletter.”

[55] Plank v. Cherneski, id at 597- 601.

[56] Kann v. Kann, 344 Md. 689, 713 (1997).

[57] One important take-away from these cases, however, is the importance of pleading a specific breach of the fiduciary duty and the resulting remedy sought. Otherwise, one will attract a motion to dismiss based on Kann.

[58] That is not to say there could not be a separate action at law not arising from the trustee’s action as trustee per se. See Barclay v. Castruccio, 469 Md. 368 (2020) recognizing the tort of tortious interference with an expectancy. Although the Court determined that the tort did not fit the facts in that case, in other situations the tort may arise. For a dramatic example of allegations constituting the tort, see In re Marshall 253 B.R. 550, 558-60, (Bkrtcy. C.D. Cal. 2000).

[59] Dabney v. Chase National Bank, 196 F.2d 668, 675 (2nd Cir. 1962) (Judge Learned Hand) as quoted in Kann v. Kann, 344 Md. 710, 710 (1997).

[60] This list paraphrases § 1001 of the Uniform Trust Code and § 14.5-901 of the Maryland Trust Code. Each list is non-inclusive – expressly including “other appropriate relief.” These lists parallel George G. Bogert and George T. Bogert, The Law of Trusts and Trustees, § 861 (rev. 2d. ed. 1982).

[61] Md. Rule 10-501 (a) (“A fiduciary or other interested person may file a petition requesting a court to assume jurisdiction over a fiduciary estate…”).

[62] Id at 501 (b) (“The petition shall be filed in the county in which all or any part of the property of the estate is located or where the fiduciary, if any, resides, is regularly employed, or maintains a place of business.”).

[63] Restatement (Second) of Trusts § 128 (1959).

[64] See above at I (B)(3) (Duty of Care) for a discussion of the enforceability, in general, of wholly discretionary trusts. When a settlor describes the discretion of the trustee’s discretion as being “sole,” “absolute,” or in similar terms seemingly granting unfettered discretion, the trustee nevertheless is still subject to court review. McNeil v. McNeil, 798 A. 2d 503, 509 (2002) (“A trust in which there is no legally binding obligation on a trustee is a trust in name only and more in the nature of an absolute estate or fee simple grant of property.”).

[65] Kevin D. Millard, Rights of Trust Beneficiaries Under the Uniform Trust Code, 34 ACTEC L.J. 57, 63 (2008). Also, Robert T. Danforth, Article Five of the UTC and the Future of Creditors’ Rights in Trusts, 27 Cardozo L. Rev. 2551, 2581 (2006)(“ An essential principle of the common law of trusts is that a trustee’s exercise of discretion is always subject to judicial review, no matter how broadly the trustee’s discretion may be described …”).

[66] George G. Bogert and George T. Bogert, The Law of Trusts and Trustees, § 228 (2011).

[67] Maryland retained the support/discretionary distinction because its common law recognized a very broad definition of a discretionary trust which restricted creditor access to such trusts. First Nat. Bank of Md. v. Dept. Health and Mental Hygiene, 284 Md. 720 (1979). Essentially, the MTA codified the First Nat. Bank of Md. case making standards enforceable by the beneficiary but not opening up the trust assets to the beneficiary’s creditors.

[68] Md. Code Ann., Est. & Trusts § 14.5-103(z) defines a support provision as a mandatory distribution but not if the trustee discretion to make the distribution or select from a class of beneficiaries in making the distribution. Maryland Trust Act § 14.5-103 (g) broadly defines a discretionary distribution provision. The definition includes if the trustee can determine the amount of a distribution or the timing of a distribution, then it is deemed a discretionary distribution even if the trust instrument provides standards for the exercise of the discretion by the trustee.

[69] Md. Code Ann., Est. & Trusts § 14.5-502 (a)(2). This provides much stronger asset protection for third party trusts than Uniform Trust Code § 504.

[70] Md. Code Ann., Est. & Trusts § 14.5-203 (a)(1)(“ A discretionary power conferred on the trustee to determine the benefits of a beneficiary is subject to judicial control to prevent misinterpretation or abuse of the discretion of the trustee.”).

[71] At I (B)(3) (Duty of Care).

[72] Restatement (First) of Trusts and Restatement (Second) of Trusts § 187, cmt. j. The early Restatements equated the granting of extended discretion to a trustee as releasing the trustee from acting reasonably: “The settlor may, however, manifest an intention that the trustee’s judgment need not be exercised reasonably, even where there is a standard by which the reasonableness of the trustee’s conduct can be judged.

[73] Edward C. Halbach, Jr., Problems of Discretion in Discretionary Trusts, 61 Colum. L. Rev. 1425, 1429 (1961), Dean Halbach was the Reporter for the Restatement (third) of Trusts which takes the position that a trustee is always held to a standard of reasonableness regardless of the scope of the discretion. This is not an aspirational position adopted by the Restatement (Third) but one based on Dean Halbach’s extensive research of court decisions.

[74] Md. Code Ann., Est. & Trusts § 14.5-203 (a)(3) (iii) and (iv).

[75] McNeil v. McNeil, 798 A.2d 503, 509 (Del. Supr. Ct. 2002) (“A trust in which there is no legally binding obligation on a trustee is a trust in name only and more in the nature of an absolute estate or fee simple grant of property.”). In McNeil, the trust instrument stated that the distribution decisions by a committee of trustees were “not subject to review by any court.”

[76] Stix v. Comm., 152 F.2d 562, 563 (2nd Cir. 1945) (J. Learned Hand) (A case involving a trust providing the trustee with “sole and exclusive discretion.”).

[77] Md. Code Ann., Est. & Trusts , § 14.5-103 (u) (1); Uniform Trust Code § 103 (13), Comment: “Due to the difficulty of identifying beneficiaries whose interests are remote and contingent, and because such beneficiaries are not likely to have much interest in the day-to-day affairs of the trust, the Uniform Trust Code uses the concept of ‘qualified beneficiary’… The term is used in Section 813 to define the class to be kept informed of the trust’s administration.”

[78] Md. Code Ann., Est. & Trusts § 14.5-103 (u)(2).)

[79] Md. Code Ann., Est. & Trusts § 14.5-603 (“Rights of beneficiaries subject to control of settlor). Except in one limited circumstance, “while a trust is revocable, rights of the beneficiaries are subject to the control of the settlor and the duties of the trustee are owed exclusively to the settlor.” Similarly, an interested person lacks standing to bring a pre-mortem contest to a revocable trust because it is treated as a Will substitute. Matter of Jacobson, 256 Md. App. 369 (2022).

[80] Md. Code Ann., Est. & Trusts , § 14.5-813(a),(c) (“Responses to beneficiary requests for information”)(“Unless unreasonable under the circumstances, a trustee shall promptly respond to the request of a qualified beneficiary for information related to the administration of the trust, including a copy of the trust instrument… On request by a qualified beneficiary, a trustee shall send to the qualified beneficiary annually and at the termination of the trust a report of the trust property, liabilities, receipts, and disbursements, including the source and amount of the compensation of the trustee, a listing of the trust assets, and, if feasible, the respective market values of the trust assets”); Uniform Trust Code § 813.

[81] Md. Code Ann., Est. & Trusts § 14.5-105 (11) sets out the non-modifiable terms. For qualified beneficiaries the non-modifiable term regarding access to information is only regarding those beneficiaries 25 years of age or older. A settlor may try to end-run this requirement by providing for “virtual representation” of a beneficiary. See Fred Franke and Deb Howe, The Maryland Trust Act: The Fate of the Unknowledgeable Beneficiary, 49 U. Balt. L. F. 85 (Spring 2019).

[82] Md. Code Ann., Est. & Trusts § 15-112 (“Grounds and procedure for removal), the earlier statute, and Md. Code Ann., Est. & Trusts § 14.5-706 (“Removal of fiduciary”), the later Maryland Trust Act statute which is clear that both apply to trustee removal: “ In addition to the grounds and procedures for removal of a fiduciary set forth in In addition to the grounds and procedures for removal of a fiduciary set forth in § 15-112 of this article…”).

[83] Md. Code Ann., Est. & Trusts , § 14.5-706 (2) (iv), for example, provides that the trustee may be removed if: “There has been a substantial change of circumstances and removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interest of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available).”

[84] Sullivan v. Mosner, 266 Md. 479, 295 A.2d 482 (1972). See also Edwards Family Limited Partnership v. Barlow, 915 F.2d 1564 (4th Cir. 1990) (unpublished).

[85] Restatement (Second) of Trusts § 222 (1959). The Restatement also states that if the exculpatory clause was placed in the instrument as the result of the abuse by the fiduciary of an existing duty between the trustee and the settlor at the time of the trust then it may not be effective. According to the Restatement, however, “The mere fact that the trustee draws the trust instrument and suggests the insertion of a provision relieving the trustee of liability does not necessarily make the provision ineffective.”

[86] This is a general requirement for the provision separate from a similar requirement in subsection (b) of both the MTA and the UTC statute that the provision must be “fair under the circumstances” if drafted or caused to be drafted by the trustee.

[87] Md. Code Ann., Est. & Trusts § 14.5-811 (“Enforcement or defense of claims.”).

[88] Md. Code Ann., Est. & Trusts § 14.5-709 (“Reimbursement of expenses of trustee.”).

[89] Hitchens v. Safe Deposit and Trust Company of Baltimore, 193 Md. 62, 66 A.2d 97 (1949); Urquhart v. Alexander & Alexander Inc., 218 Md. 405, 147 A.2d 213 (1958).

[90] Saulsbury v. Denton Nat. Bank, 25 Md. App. 669, 674-5 (1975) (“‘The question remains whether the services were beneficial in the preservation of the trust. We have no doubt that they were. Mr. Smith had been named in the will as a trustee. He owed a duty to the estate to stand his ground against unjust attack.”) (Quoting Judge Cardozo in Jessup v. Smith, 119 N.E. 403 (1918)). MD Code, Estates and Trusts, § 14.5-709 (a)(1) (“reimbursement of expenses of a trustee”) (Entitled for reimbursement for “expenses that were properly incurred in the administration of the trust.”).

[91] “May not be true” because it is not certain. The Uniform Trust Code Comment to § 709: “Reimbursement under this section may include attorney’s fees and expenses incurred by the trustee in defending an action. However, a trustee is not ordinarily entitled to attorney’s fees and expenses if it is determined that the trustee breached the trust. See 3A Austin W. Scott & William F. Fratcher, The Law of Trusts § 245 (4th ed. 1988).” However, some removals may not involve a breach of trust.

[92] The American Rule has various exceptions. For examples of general exceptions to the American Rule, see: Garcia v. Foulger Pratt Development, Inc., 155 Md. App. 634 (2003) (the “common fund” doctrine); St. Luke Evangelical Lutheran Church v. Smith, 318 Md. 337 (1990) (whenever punitive damages are appropriate); Hall v. Cole, 412 U. S. 1 (1973) (opponent has acted in bad faith); Inlet Associates v. Harrison Inn Inlet, Inc., 324 Md. 254 (1991). (Maintenance or defending proceeding in bad faith under Md. Rule 1-341).

[93] Uniform Trust Code § 1004.

[94] Id, Comment: “The court may award a beneficiary litigation costs if the litigation is deemed beneficial to the trust. Sometimes, litigation brought by a beneficiary involves an allegation that the trustee has committed a breach of trust. On other occasions, the suit by the beneficiary is brought because of the trustee’s failure to take action against a third party, such as to recover property properly belonging to the trust. For the authority of a beneficiary to bring an action when the trustee fails to take action against a third party, see Restatement (Second) of Trusts §§ 281-282 (1959). For the case law on the award of attorney’s fees and other litigation costs, see 3 Austin W. Scott & William F. Fratcher, The Law of Trusts §§ 188.4 (4th ed. 1988).” See also Restatement (Third) of Trusts § 88 (d); Benjamin G. Carter, Relief for Beneficiaries Suing for Breach of trust: Payment of Accounting Costs Before Trial, 76 Wash. U. L. Q. 1411, 1423-4 (1998).

[95] Restatement (Third) of Trusts § 88 (Power to Incur and Pay Expenses) at Comment (d).

[96] Alloy v. Wills Family Trust, 179 Md. App. 255, 299 (2008) (applying DC law) (“See generally Dobbs, [The law of Remedies § 3.3(2) (2d ed. 1993)] (recognizing that suit may be brought to recover nominal damages “much as declaratory judgment suits are brought, to determine a right”). Finally, such a judgment permits the non-breaching partner to shift expenses incurred in litigating a breach of fiduciary duty to the breaching partner, through an award of costs. See generally id. (“the nominal damages award is, realistically, a rescue operation” that shifts litigation costs to the defendant when the plaintiff proves wrongful conduct but fails to prove the amount or fact of its monetary injury)”. Although a partnership case, this holding is consistent with the general proposition that it is a benefit to entity itself if the guiderails regulating a fiduciary’s actions are established by the litigation. To impose a “no harm, no foul” standard when the litigation is necessary to keep the fiduciary in line would award unfaithful fiduciaries merely because they were caught early.

[97] Caveat actions are discussed within this section below becausethey constitute a large portion of a fiduciary litigation practice. Strictly speaking, of course, they are not actions based on a breach of a fiduciary duty so not fiduciary litigation as such. Instead they are suits to set aside a Will based on the testator’s lack of capacity, the exercise of undue influence over the testator, the Will being the product of the testator’s insane delusion, or an error in the execution or witnessing of the purported Will.

[98] Some uncontested matters, however, may involve judicial probate before the Orphans’ Court. Md. Code Ann., Est. & Trusts § 5-402 (Proceedings for judicial probate) provides that it “shall be instituted” if “ it appears to the court or the register that the petition for administrative probate is materially incomplete or incorrect in any respect” regardless if the interested persons object. The name “Orphans’ Court” for the probate court was not unique to Maryland: Lewis M. Simes and Paul E. Basye, “The organization of the Probate Court in America,” 42 Mich. L. Rev. 965, 979 (1944) ( “In Pennsylvania, Maryland, Delaware, Virginia and New Jersey separate orphans’ courts were early established. ‘The idea was taken from the court of orphans of the City of London, which had the care and guardianship of children of deceased citizens of London in their minority, and could compel executors and guardians to file inventories, and give securities for their estates …'”) (Cleaned up).

[99] The Second Report of the Governor’s Commission to Study and Revise the Testamentary Laws of Maryland (December 5, 1968), is universally called the “Henderson Commission Report” after its chair, William L. Henderson, former Chief Judge of the Maryland Court of Appeals. See generally Shale D. Stiller and Roger D. Redden, Statutory Reform in the Administration of Estates of Maryland Decedents, Minors, and Incompetents, 29 Md. L. Rev. 85 (1969) (detailing the work of the Henderson Commission). As a result of the Henderson Commission Report, the General Assembly in 1969 repealed and replaced most of the laws then governing estates in Maryland. The effective date, however, for the provision revamping the testamentary laws, as opposed to the laws affecting guardianships, was 1970. In 1974, that new testamentary code was reenacted as the Estates & Trusts Article continuing in effect currently.

[100] Henderson Commission Report cmt. § 2-102.

[101] Kaouris v. Kaouris, 324 Md. 687 (1991).

[102] Id. at 696.

[103] Md. Code, Estates and Trusts, Title 3, Subtitle 4 (Elective Share of Surviving Spouse); Md. Code, Estates and Trusts § 3-201 (Allowances).

[104] Kaouris at 713.

[105] Appeals from the Orphans’ Court generally may either go to the Circuit Court or directly to the Appellate Court of Maryland. The appeal is heard de novo by the Circuit Court (as a new proceeding, as if there had never been a prior hearing or judgment). Md. Code, Courts & Judicial Proceedings, § 12-502. Because of the composition of the Orphans’ Courts of Harford, Howard, and Montgomery County, the appeal to the Circuit Court does not apply. An appeal from a final judgment to the Appellate Court of Maryland is an appeal on the record pursuant to Courts & Judicial Proceedings Article § 12-501.

[106] Kaouris at 706.

[107] Id. at 694.

[108] Radcliff v. Vance, 360 Md. 277 (2000).

[109] Matter of Watkins, 241 Md. App. 56, 70 (2019). The Orphans’ Court determination in this case is consistent with the broad equitable powers it has per the Supreme Court of Maryland decisions of Kaouris and Radcliff. The Watkins Court found that the new wife only married the decedent “for her financial gain.” It. at 76..

[110] E. Miller, The Construction of Wills in Maryland § 7 (1927); Woods v. Fuller, 61 Md. 457, 459 (1884) (“But it is equally certain, that the Orphans’ Courts of the State are the tribunals in which, ordinarily, the estates of deceased persons must be settled; and in order to give courts of equity jurisdiction to superintend the settlement of an estate, or to distribute the legacies at the instance and request of the executor, he must show some special circumstances, such as a trust devolved upon him by the will, and about which he is doubtful, or at least something more than the mere payment over of a legacy after the debts are paid.”)

[111] E. Miller § 7.

[112] Clarke v. Clarke, 291 Md. 289, 291 (1981).

[113] Kaouris at 708 (“Application of the Clarke complexity test does not resolve whether, when the circuit court exercises jurisdiction in a complicated construction matter, the orphans’ court is divested of jurisdiction or is simply precluded from acting by virtue of the superior jurisdiction of the circuit court. Stated differently, does the determination that a construction matter is “complicated” affect the orphans’ court’s power to resolve the issue or merely the propriety of its doing so? …[A] fair reading of Clarke, that it affects only the propriety of the orphans’ court acting.”)

[114] Md. Code Ann., Courts & Judicial Proceedings § 3-408. Also, “Except for the District Court, (of Maryland) a court of record within its jurisdiction may declare rights, status, and other legal relations whether or not further relief is or could be claimed.” Maryland Uniform Declaratory Judgments Act § 3-403.

[115] Uniform Declaratory Judgment Act Comment: “The Declaratory Judgment Act is a development of the old Roman law of procedure … The exercise of the Declaratory Judgment procedure constantly grew and in the Middle Ages the law had so developed that the questions of status and property rights connected therewith and of the validity or invalidity of wills or other legal instruments constituted the principal subjects of declaratory actions.”

[116] See Castruccio v. Est. of Castruccio, 239 Md.App. 345 (2018).

[117] Md. Code, Estates and Trusts, § 2-105 (a) (Issues of fact determinations): “At the request of an interested person made within the time determined by the court, the issue of fact may be determined by a court of law.”; Md. Rule 6-434(a): “Transmitting on Petition. In any proceeding, the orphans’ court, upon petition by a person with standing, may transmit contested issues of fact within its jurisdiction for trial to the circuit court of the county in which the orphans’ court is located.”

[118] Md. Code, Estates and Trusts, § 2-105 (b) (2): “When the request is made before the court has determined the issue of fact, the court shall transmit the issue to a court of law.”

[119] Myers v. Hart, 248 Md. 443, 447-8 (1968) (“The intention of the testatrix as expressed in the will is a problem of construction, over which the orphans’ court has no jurisdiction. It is a matter of interpretation, a question of law which can only be determined by a court of equity.”)

[120] Walters v. Walter, 3 H.&J. 201, 2014 (1811).

[121] Reedy v. Barber, 353 Md. 141, 148 (1969).

[122] See Castruccio v. Est. of Castruccio, 239 Md.App. 345 363 (2018). (“Many, many Maryland case have stated or applied the proposition that, to understand or explain the words that a testator has written, a court may consider evidence of the circumstances that surrounded the execution of the will.”).

[123] Nugent v. Wright, 277 Md. 614, 620 (1976) “It is impermissible to submit an issue which poses a pure question of law, but an issue which raises a mixed question of law and fact may be submitted to a jury under proper instructions.” (Cleaned up).

[124] Id. at 619, (Cleaned up).

[125] Id. at 623. For questions deemed issues of law, see Kao v. Kao, 309 Md. 366 (1987). In that case, however, that the issues were of questions of law was conceded by the parties and some of the issues may have been proper as being mixed of fact and law.

[126] Kao v. Kao, 309 Md. 366, 378-9 (1987). Bringing a case directly to the Circuit Court on a declaratory judgment petition is not the same as giving advice to the court hearing the matter. See above II (B)(1). Also, questions of law and fact can be heard by the Circuit Court by de novo appeal. MD Code, Courts and Judicial Proceedings, § 12-502 (Appeals to circuit court from final judgment of orphans’ court).

[127] Md. Code Ann., Estates and Trusts, § 7-101 ( Duties of personal representative generally). “Interested person” is a defined term. Md. Code Ann., Est. & Trusts § 1-101 (i).

[128] Per the Henderson Commission Report Comments to this section: “The fundamental responsibility is that of a trustee, although, unlike many trustees, a personal representative’s authority is derived from appointment by

the Court.”

[129] Md. Code Ann., Estates and Trusts, § 7-403 (a) (Breach of fiduciary duty). Because a personal representative is appointed, and to a degree supervised, by the Court (unlike a trustee of an express trust), § 7-403 (b) adds that: “The exercise of power of a personal representative in violation of a court order, or contrary to the provisions of the will may be a breach of duty.”

[130] Md. Code Ann., Estates and Trusts, § 7-403 (a) equating the fiduciary duties of a Personal Representative to that of a Trustee of an express trust was discussed above at I (B) (2) in connection with the Personal Representative case of Goldman v. Rubin, 292 Md. 693 (1982) exception to the conflict-of-interest exception to the basic duty of loyalty.

[131] See, for example, Bastian v. Laffin, 54 Md. App. 703, 709 (1990) (the duty of prudence) (“In carrying out that obligation (to protect and preserve the estate assets), he is required to act in good faith, and must perform his fiduciary duties with the same degree of care and diligence that would be exercised by a prudent person under similar circumstances in the management of his own affairs.”). Also, Surratt v. Knight, 162 Md. 14 (1932) (the duty of loyalty) (“An executor is the personal representative of the testator, and, after probate, is charged with the duty to defend and maintain the validity of the instrument with loyalty and fidelity, and to complete the administration of the estate in accordance with the terms of the will, under the law.”)

[132] Md. Code Ann., Estates and Trusts, § 6-306 (a).

[133] Schmidt v. Chambers, 265 Md. 9, 38 (1972).

[134] Ayers v. Liller, 65 Md. App. 178, 182 (1985) (“Removal is mandatory where any of the above causes (in the statute) are found. In addition, a personal representative may be removed for conduct amounting to fraud, bad faith, collusion or breach of trust.”) (Cleaned up).

[135] Md. Code Ann., Estates and Trusts, § 6-306 (b).

[136]Md. Code Ann., Estates and Trusts, § 6-306 (c) (1)-(3); also at (4): “After notice has been given to the personal representative, the personal representative may exercise only the powers of a special administrator…” This shrinks the powers related to distributions. See Title 6, Subtitle 4 of Md. Code Ann., Estates and Trusts.

[137] Hodel v. Irving, 481 U.S. 704, 716 (testamentary freedom “has been part of the Anglo-American legal system since feudal times.”) (Justice O’Connor); Restatement (Third) of Property: Wills and Other Donative Transfers, § 10.1 cmt. c (2003) (“American law does not grant courts any general authority to question the wisdom, fairness, or reasonableness of the donor’s decisions about how to allocate his or her property.”); Jesse Dukeminier and Robert L. Sitkoff, Wills, Trusts, and Estates, 1 (9^th ed. 2013)) (“The American law of succession embraces freedom of disposition, authorizing dead hand control, to an extent that is unique among modern legal systems. Within the American legal tradition, a property owner may even exclude her blood relations and subject her dispositions to ongoing conditions. The right of a property owner to dispose of her property on terms that she chooses has become to be recognized as a separate stick in the bundle of rights called property.”)

[138] Sellers v. Qualls, 206 Md. 58, 68 (1954) (“Neither does the fact that a will disappoints reasonable expectations of prospective beneficiaries establish lack of mental capacity.”).

[139] Md. Code Ann., Estates and Trusts, Title 3, Subtitle 4 (Elective share of surviving spouse).

[140] Restatement (third) of Property: Wills and Other Donative Transfers, § 10.1 cmt. c (2003) (“American law does not grant courts any general authority to question the wisdom, fairness, or reasonableness of the donor’s decisions about how to allocate his or her property. The main function of the law in this field is to facilitate rather than regulate.”).

[141] Md. Code Ann., Estates and Trusts, §5-207 (Petition to caveat a will); Md. Rule 6-431 (b).

[142] Id.

[143] Hegmon v. Novak, 130 Md. App. 703, 714 (2000) (“[W]e are constrained to rule that the caveat petition cannot be amended to add undue influence as an additional ground for relief because more than six months have elapsed since the appointment of the personal representative.”).

[144] Henderson Commission Report, cmt. on § 5-207. As noted above, caveats are not strictly “fiduciary litigation” but included because of the frequency estates and trusts litigators encounter Will contests as part of their litigation practice. The treatment of this topic is consequently abbreviated.

[145] Md. Code Ann., Estates and Trusts, § 4-102 (Will requirements).

[146] In re Dreyfus’ Estate, 165 P. 941 (Calif. 1917) (“The provision that a will should be valid if entirely ‘written, dated, and signed by the hand of the testator,’ is the ancient rule on the subject. There can be no doubt that it owes its origin to the fact that a successful counterfeit of another’s handwriting is exceedingly difficult, and that therefore the requirement that it should be in the testator’s handwriting would afford protection against a forgery of this character.”).

[147] Kevin R. Natale, A Survey, Analysis, and Evaluation of Holographic Will Statutes, 17 Hofstra L. Rev. 159 (1988).

[148] Md. Code Ann., Estates and Trusts, § 4-103 (“A holographic will is void one year after the discharge of the testator from the armed services unless the testator has died prior to expiration of the year or does not then possess testamentary capacity.”).

[149] Md. Code Ann., Estates and Trusts, § 4-104. Wright v. Nugent, 23 Md. App. 337 (1974), affirmed Wright v. Nugent. 275 Md. 290 (1975) (Virginia holographic Will accepted)..

[150] In O’Neal v. Jennings, 53 Md. App. 604 (1983), the Court upheld a Will despite an attestation clause stating that the witnesses signed in the presence of each other when, in fact, they did not.

[151] Tinnan v. Fitzpatrick, 120 Md. 342, 87 A. 802 (1913).

[152] Casson v. Swogell, 304 Md. 641, 500 A.2d 1031 (1985) (holding that there is no requirement of “publication”); Generally, see Truitt v. Slack, 137 Md. App. 360 (2001) holding the Will was valid even though testator did not sign will in front of witnesses, did not direct witnesses’ attention to his signature, and did not proclaim that document was his will.

[153] VanMeter v. VanMeter, 183 Md. 614 (1944); West v. Fidelity-Baltimore Nat’l Bank, 219 Md. 258 (1959).

[154] VanMeter v. VanMeter, 183 Md. 614, 617-18 (2944).

[155] Castruccio v. Estate of Castruccio, 456 Md. 1 (2017). Castruccio was argued and won by our law firm. We did not, however, have any role in creating the Will under dispute which Will was done years before our involvement as fiduciary litigators. Although the attestation clause was flawed, other factors triggered the presumption which was instrumental in having the Will upheld.

[156] Estate of Steiner, 255 Md. App. 275, 304 (2022).

[157] Md. Code Ann., Estates and Trusts, § 4-104 (f) (“A will executed in conformance with the provisions of Executive Order 20.04.10.01, authorizing remote witnessing and electronic signing of certain documents, shall be deemed to have been signed and witnessed in conformity with this section if the will was signed and witnessed during the time that the executive order was in effect.”)

[158] If the lawyer supervises the process but is one of the two witnesses, the separate notarization is required. Md. Code Ann., Estates and Trusts, § 4-104 (c)(1).

[159] The forms provided in the statute, however, recite rather more than would be required by an attestation clause. “An attestation clause is a ‘provision at the end of an instrument (esp. a will) that is signed by the instrument’s witnesses and that recites the formalities required by the jurisdiction in which the instrument might take effect (such as where the will might be probated).” Castruccio v. Castruccio, 456 Md. 1, 17 (2017) (cleaned up). The forms in the statute require that the testator declared the Will was signed willingly, with no constraint or undue influence, and that the testator was in sound mind – somewhat self serving pronouncements that may have some, but questionable significance, if there is a later caveat proceeding.

[160] Md. Code Ann., Estates and Trusts, § 4-102 (a).

[161] Philip L. Sykes, Contest of Wills in Maryland § 61 (1941), quoted in Sellers v. Qualls, 206 Md. 58, 66, 110 A.2d 73 (1954).

[162] How wills shall be made, and their effect, Proceedings and Acts of the General Assembly, 1797, Archives of Maryland, Vol. 105, page 288-9: Shale D. Stiller and Roger D. Redden, Statutory Reform in the Administration of Estates of Maryland Decedents, Minors and Incompetents, 29 Md. L. Rev. 85, 86 (1969) (dating its codification at 1798);

[163] Henderson Report, cmt. on 4-101 (Who can make a will) (“The Maryland Court of Appeals has developed a sound and consistent body of law on the subject of mental capacity to make a will which, in the opinion of the Commission,

could be better described by the language “legally competent to make a will” than by the language presently contained in the statutory provision.”). See Ritter v. Ritter, 114 Md. App. 99 (1997) (Earlier finding that testator lacked capacity to execute a power of attorney not determinative on later issue of capacity to execute a will); Lee v. Lee, 337 So. 2d 713 (Miss. 1976); In Re Estate of Sorenson, 274 N.W.2d 694 (Wis. 1979).

[164] Grill v. O’Dell, 113 Md. 625 (1910); Dudderar v. Dudderar, 116 Md. 605 (1911); Collins v. Ecksteine, 164 Md. 696 (1933).

[165] Ingalls v. Mount Oak Methodist Church Cemetery, 244 Md. 243 (1966).

[166] Sellers v. Qualls, 206 Md. 58, 66 (1954) (Eccentricity is not enough to void a will and even grotesque eating habits such as eating out of garbage cans were seen as “an odd and extreme form of miserliness; but miserliness is not necessarily the hallmark of insanity and is more likely to indicate the reverse.”).

[167] Id. at 70 (cleaned up).

[168] Moore v. Smith, 321 Md. 347, 353 (1990); See Anderson v. Meadowroft, 339 Md. 218, 229 (1995).

[169] “The complaint fails, however, because Anderson did not allege facts sufficient to establish the decedent’s high susceptibility to undue influence. In some cases we have concluded that the decedent was highly susceptible to influence because his or her mental state had deteriorated… In other cases, we have found the decedent to be highly susceptible to influence when he or she was highly dependent on the beneficiary to meet vital physical needs… When such physical dependence exists along with the other characteristics of undue influence, we have found the combination to be sufficient for a fact-finder to infer that the decedent was motivated by force or fear.” Anderson v. Meadowcroft, id. at 229-30 (cleaned up).

[170] See discussion for the basis of the change at II, D, 6 (Challenges based on lack of capacity). The change of the statutory language was to emphasis that the Maryland common law controlled the definition of testamentary capacity separate from the capacity to make a deed or to contract.

[171] Arbogast v. MacMillan, 221 Md. 516, 523 (1960), quoted post-Henderson changes to the Maryland code in Wall v. Heller, 61 Md. App. 314, 326 (1985) (cleaned up).

[172] Restatement (Third) of Property: Wills and Other Donative Transfers § 8.1, cmt. c; Bradley E.S. Fogel, The Completely Insane Law of Partial Insanity: the Impact of Monomania on Testamentary Capacity, 42 Real Prop., Probate and Trust J. 67, 77 (2007).

[173] Id.

[174] Id. at 83; Dew v. Clark, (1826) 162 Eng. Rep. 410 (L.R.A. & E.), accessible at https://lawreview.law.pitt.edu/ ojs/lawreview/article/download/917/568/1855.

[175] Id. at 84.

[176] Doyle v. Rody, 180 Md. 471, 477-8 (1942): Benjamin v. Woodring, 268 Md. 593, 602 (1973) (“It is essential to the exercise of such power . . . that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties-that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.”)

[177] Banashak v. Wittstadt, 167 Md. App. 627, 658 (2006).

[178] Id. at 658-9.

[179] Nugent v. Wright, 277 Md. 614 (1976); Schlossberg v. Schlossberg, 275 Md. 600 (1975); Holland v. Enright (Holland II ), 169 Md. 390 (1935) ; Holland v. Enright (Holland I ), 167 Md. 604 (1934).

[180] Kao v. Kao, 309 Md. App. 366, 376 (1987) (“Nor can the circuit court modify or supplement issues. Unless the issues are immaterial or involve only pure questions of law, or unless they are abandoned by consent of all parties, it is the duty of the circuit court to submit to the jury the issues received from the orphans’ court.”)

[181] Carrick v. Henley, 44 Md. App. 124 (1979).

[182] Id. at 130-1 (“It is apparent that the order in the present case if not otherwise final, comes within the “collateral order exception” set forth above. It will be observed: (1) that the order finally disposed of the question as to who is to be the special administrator, which is the only one here in dispute; (2) the issue is important; (3) it is apparent that this appeal is completely separate from the merits of the caveat; and (4) that the order would be completely unreviewable except on direct appeal because as we have stated, the special administrator’s duties would have been completed by the time the caveat has been decided.”).

[183]Lowenthal v. Rome, 45 Md. App. 495, 503 (1980), affirmed on appeal Rome v. Lowenthal, 290 Md. 33, 42 (1981): “As we pointed out earlier, the statute here obviously intends a somewhat different procedure for a determination in a circuit court than would be true on an appeal to the Court of Special Appeals…In a proceeding such as this a circuit court or the Superior Court of Baltimore City is not engaged in an appellate review of whether the orphans’ court made the proper determination upon the basis of what was before it, but is expected to make its own determination on the evidence brought before it. To require the preparation of a transcript of testimony would be to dictate the performance of a superfluous act.”

[184] Karen E. Boxx, The Durable Power of Attorney’s Place in the Family of Fiduciary Relationships, 36 Ga. L. Rev. 1, 6 (2001). The law governing powers of attorney is agency not the law of trusts.

[185] This automatic termination is consistent with the concept that the agent was directly at the direction and control of the principal. “The principal’s incapacity undoubtedly terminated the agency because the assumption that an agent acts at the direction of the principal and the principal has the power to terminate the agency at any time. The principal’s incapacity would remove both of those essential elements.” Id. at 5.

[186] Bloomberg Tax, Portfolio 859-3d (Durable Powers of Attorney), A. Definition and Background (“In 1954, Virginia became the first state to change the common law rule of termination of the agency upon incapacity of the principal. Virginia’s statute provided that the agency would continue if the instrument expressly stated that it survived the principal’s incapacity. Between 1954 and 1987, all 49 other states and the District of Columbia changed the common law requirement.”

[187] The requirement that the power of attorney needed to affirmatively state it would survive the principal’s disability mimicked the original Virginia statute. E.g., Former Va. Code Ann. §11-9.1. The Uniform Power of Attorney Act of 2006 (the “UPOAA) reversed the treatment of both the Virginia act and the earlier uniform power of attorney act requiring the document to state its durability: “Another innovation is the default rule in Section 104 that a power of attorney is durable unless it contains express language indicating otherwise. This change from the Original Act reflects the view that most principals prefer their powers of attorney to be durable as a hedge against the need for guardianship.” UPOAA, Prefatory Note. Maryland modeled its current statute on the UPOAA, see discussion in text below.

[188] King v. Bankerd, 303 Md. 98, 105 (1985).

[189] 303 Md. 98 (1985). See supra Chapter 1, C.4.a.(Gift-Giving Power).

[190] Restatement (First) of Agency § 7 (Authority).

[191] Md. Code Ann., Est. & Trusts Title 17 (“the Maryland General and Limited Power of Attorney Act”).

[192] Uniform Power of Attorney Act (2006). Few states have adopted the model act in its entirety, Angela M. Vallario, The Uniform Power of Attorney Act: Not a One-Size-Fits-All Solution, 43 U. Balt. L. Rev. 85, 88-9 (2014). Unlike the MTA whose goal was to codify not modify the POA Act in some respects modified the common law.

[193] UPOAA § 121; UTC § 106.

[194] MTA § 14.5-106 mirrors UTC § 106. The Maryland POA Act did not adopt UPOAA § 121. The difference probably has no significance. Generally, the MTA adopted many more sections of the UTC than the Maryland POA Act did of the UPOAA.

[195] 17-105(c) (clarifying that unless otherwise provided by its terms the written power of attorney is durable). This is a reversal of the common law treatment.

[196] This closely tracks Section 114 of the UPC model

[197] UPOAA §113 cmt.: “This section establishes a default rule for agent acceptance of appointment under a power of attorney. Unless a different method is provided in the power of attorney, an agent’s acceptance occurs upon exercise of authority, performance of duties, or any other assertion or conduct indicating acceptance… Because a person may be unaware that the principal has designated the person as an agent in a power of attorney, clear demarcation of when an agency relationship commences is necessary…”

[198] In King v. Bankerd, 303 Md. 98, 108(1985). the principal brought an action based on a breach of the agent’s fiduciary duty to the principal. In reaching its conclusion, the Court held: “[T]he main duty of an agent is loyalty to the interest of his principal… In light of the duties of loyalty that arise from the fiduciary relation, it is difficult to imagine how a gift of the principal’s real property would be to the benefit of the principal when the power of attorney does not authorize such a gift or the principal does not intend to authorize such a gift.”

[199] And, of course, the Maryland Trust Act and the other state codifications of the law of trusts modeled on the Uniform Trust Code bring more clarity and consistency to the fiduciary obligations of trustees.

[200] The law of agency mandated that the agent followed the principal’s direction. Restatement (Third) of Agency, § 2.02

[201] UPOAA §114 cmt.: “Establishing the principal’s reasonable expectations as the primary guideline for agent conduct is consistent with a policy preference for “substituted judgment” over “best interest” as the surrogate decision-making standard that better protects an incapacitated person’s self-determination interests.”

[202] The second duty under the UPOAA §114 is to act in good faith. Standing alone, good faith is the contract standard of conduct. It is not a fiduciary duty nor is it the equivalent to a duty to act in the principal’s best interests. However, see Frederick R. Franke, Jr. Resisting the Contractarian Insurgency: The Uniform Trust Code, Fiduciary Duty, and Good Faith in Contract, 36 ACTEC L. J. 517, 522-3 (2010) (“Certain rules (under the UTC), however, are non-modifiable, including the ability of any trust agreement to alter the ‘duty of a trustee to act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.‘ Although this rule is framed in what may sound like contractarian vocabulary (‘good faith‘), it is in fact close to the classic formulation of the fiduciary duty of loyalty. The Uniform Trust Code may be ‘permeated with (contractarian) default rule rhetoric‘ but it came out solidly in the anti-contractarian camp by rejecting a pure ‘good faith‘ standard in the contract, Uniform Commercial Code, sense.) (Citations omitted).

[203]The duty of loyalty, however, is modified from the “sole benefit” rule governing trustees. See Maryland Act § 17-113 (d); UPOAA §114 cmt.: “This position is a departure from the traditional common law duty of loyalty which required an agent to act solely for the benefit of the principal.”

[204] Generally, an agent, like other fiduciaries, would not be deemed to have an impermissible conflict if it was sanctioned by the principal. Goldman v. Rubin, 292 Md. 693 (1982).

[205]The UPOAA version states that an agent that acts in good faith to preserve such estate plan is not liable to beneficiaries. The Maryland version states that an agent that acts consistent with “this section” is not liable. Compare UPOAA § 114(c) with the Maryland Act § 17-113 (c). Time will tell whether this is a material difference.

[206] The uniform act, however, has a direct parallel to the broad provisions of the Maryland Trust Act and the Uniform Trust Code. UPOAA § 121: “Unless displaced by a provision of this [act], the principles of law and equity supplement this [act].”

[207] Maryland Act § 17-103; UPOAA § 116.

[208] Maryland Act § 17-103 (a) (8) includes: “The principal’s caregiver or another person that demonstrates sufficient interest in the principal’s welfare” with the ability to bring an action. This is in addition to family members, those named as beneficiaries of the principal’s estate, health care agents, and others.

[209] Ibru v. Ibru, 239 Md. App. 17, 40 (2018), cert. denied 462 Md. 570 (2019) (“We hold that the question of whether Janet fraudulently obtained and employed the Powers of Attorney to become the joint owner of the Joint Accounts during Chief Ibru’s lifetime is a question of title that is squarely within the scope of the circuit court’s equity jurisdiction and “beyond the jurisdiction of the Orphans’ Court’”)

[210] Maryland Act § 17-102; UPOAA § 114 (h) cmt.: “The narrow categories of persons that may request an agent to account are consistent with the premise that a principal with capacity should control to whom the details of financial transactions are disclosed. If a principal becomes incapacitated or dies, then the principal’s fiduciary or personal representative may succeed to that monitoring function.”

[211] John H. Langbein & Lawrence W. Waggoner, “Reformation of Wills on the Ground of Mistake: Change of Direction in American Law?”, 130 U. Pa. L. Rev. 521 (1982) (quoting, in part, from G. Palmer, The Law of Restitution, § 20.1, at 158 (1978).

[212] Restatement (Third) of Property (wills and other donative transfers) § 10.2, cmt. d(2003).

[213] Marty v. First Nat. Bank of Baltimore, 120 A.2d 841, 845 (Md. 1956); See also Castruccio v. Estate of Castruccio, 239 Md. App. 345, 362 (2018), cert. denied 463 Md. 149; Miller, Edgar G., The Construction of Wills in Maryland §§ 12, 44 (1919); and Gilmer v. Stone, 120 U.S. 586, 590 (1887).

[214] Restatement (Second) of Trusts § 38 cmt. a. (1959).

[215] Bogert, supra note 16. See also id. § 88 (“The courts have, however, distinguished between using oral evidence to supply a term entirely missing and offering oral testimony to clear up ambiguities, explain doubtful terms, and give a setting to the writing. If all of the essential elements of the writing are present, they may be clarified by non-documentary evidence.”).

[216] See Shaffer v. Lohr, 287 A.2d 42, 48 (Md. 1972) (noting that a joint bank account was regarded as an inter vivos trust because an expression of clear and unmistakable intent to create such a trust could be proved by parol evidence). Presumably, the Shaffer decision would be now impacted by Maryland’s multiple account statute. Parol evidence can also be used to establish a resulting and constructive trust, including such trusts regarding land. See Jahnigen v. Smith, 795 A.2d 234, 240 (Md. Ct. Spec. App. 2002); Fasman v. Pottashnick, 51 A.2d 664, 666 (Md. 1947).

[217] Md. Code, Estates and Trusts § 14.5-406 (Oral trusts) (“Except as required by a provision other than this title, a trust need not be evidenced by a trust instrument, but the creation of an oral trust and the terms of the oral trust may be established only by clear and convincing evidence.”).

[218] Md. Code, Real Property § 5-101 (Parol estates with force and effect of estates or interests at will).

[219] Shriner’s Hospital for Crippled Children v. Maryland Nat. Bank, 270 Md. 564, 581-2, 312 A.2d 546, 555 (1973).

[220] See Kiser v. Lucas, 185 A. 441, 446 (Md. 1936); Roos v. Roos, 203 A.2d 140, 142 (Del. Ch. 1964) (citing Kiser for the proposition that a declaration of trust may be amended to reflect the intent of the settlor after his or her death).

[221] Md. Code Ann., Est. & Trusts 14.5-102 (application of title).

[222] Uniform Trust Code cmt. @ §102 (scope). UTC § 102 is identical to MTA §14.5-102.

[223] Md. Code Ann., Est. & Trusts § 14.5-1006.

[224] See Restatement (Third) of Prop.: Wills and Other Donative Transfers § 12.1 cmt. d. (2003). This “disapproval” is not rooted in the common law. No pretense is made that the reworking of the rule by the Restatement of Property is based on case law development. Thus, this is not a “restatement” of the common law.

[225] Id. § 12.1 cmt. b.

[226] Unif. Trust Code § 415 (2010).

[227] UTC § 415 cmt.(citations omitted.) Given that the Maryland version of UTC § 415 is verbatim, the comment may be useful in arguments over the admissibility of extrinsic evidence.

[228] MTA § 14.5-413; Unif. Trust Code § 415 (2010).

[229] John H. Langbein, Substantial Compliance with the Wills Act, 88 Harv. L. Rev. 489, 501 (1975) (“[T]he dead man statutes are widely condemned among commentators and practitioners. To Wigmore, ‘The exclusion is an intolerable injustice,’ since ‘cross-examination and other safeguards for truth are a significant guarantee against false decision.’ As long ago as 1938 the American Bar Association’s Committee on the Improvement of the Law of Evidence voted disapproval of dead man statutes by the margin of forty-six to three, following a national survey of professional and judicial opinion.”).

[230] Ed Wallis, An Outdated Form of Evidentiary Law: A Survey of Dead Man Statutes and a Proposal for Change, 53 Clev. St. L. Rev. 75 (2005-6). Mr. Wallis lists 32 states that have expressly rejected the dead man’s statute. Since his article, at least 30 jurisdictions do not recognize or have repealed the statute. See Fred Franke and Anna Katherine Moody, The Terms of the Trust: Extrinsic Evidence of Settlor Intent, 40 ACTEC L. J. 1, appendix. The remaining jurisdictions either recognize it fully or with some degree of limitation.

[231] Md. Code Ann., Cts. & Jud. Proc. § 9-116.

[232] Wigmore, supra note 6, § 576.

[233] Robertson v. Mowell, EX’R, etc., 66 Md. 530, 8a. 273, 274 (1887).

[234] Id.

[235] Indeed, in Davis v. State, 38 Md. 15, WL 4269 (1873) the Court held that an alleged accomplice to a murder, who obviously would have an interest in the outcome, was competent to testify as a witness because of the more liberal Maryland Evidence Act of 1864. Additionally, in Leitch v. Leitch, 144 Md. 330, 79a 600 (1911) an attesting witness to a will that left that witness valuable real property was not precluded from testifying to the underlying facts of the execution of the will due to his interest. See also, Estep v. Morris, 38 Md. 411 (1873). Federal Rule of Evidence 601 generally eliminated the common law witness incompetency disqualification with a Dead Man Statute care-out. See Fred Franke and Anna Katherine Moody, The Terms of the Trust: Extrinsic Evidence of Settlor Intent, 40 ACTEC L. J. 1, 19-21 (2014).

[236] Reddy v. Mody, 39 Md. App. 675, 679 (1978) (quoting C. McCormick, Evidence, s 65 (2d ed. 1972)).

[237] Soothcage’s Estate v. King, 227 Md. 142, 150 (1961) (quoting, as “a correct statement of the law of Maryland,” Riley v. Lukens Dredging & Contracting Corp., 4 F. Supp. 144, 147 (D. Md. 1933) (Chestnut, J.).

[238] See Griffith v. Benzinger, 144 Md. 575 (1924).

[239] See Soothcage’s Estate, at 144, 151. A creditor may be appointed personal representative if others with a higher priority fail to be appointed. MD Code, Estates and Trusts, § 5-104 (Priority of rights) (Those entitled to appointment include as tenth in priority “The largest creditor of the decedent who applies for administration.”).

[240] Sheeler v. Sheeler, 207 Md. 264, 269 (1955); see also Guernsey v. Loyola Fed. Sav. & Loan Ass’n, 226 Md. 77, 81 (1961)

[241] For a more detailed exploration of this issue, including the procedural issues that arise in “omnibus” challenges to a decedent’s probate and non-probate estate planning, see generally Jack Beckett, Pesky and Persistent Evidentiary Issues in Estate & Trust Litigation, MSBA CLE (June 25, 2018), Available at http://fredfranke.com/presentation. This course provides an overview of the myriad of evidentiary and procedural issues that can arise when probate and non-probate claims are being litigated in the same action.

[242] Ridgely v. Beatty, 222 Md. 76 (1960)

[243] Boyd v. Bowen, 145 Md. App. 635 (2002)

[244] Stacy v. Burke, 259 Md. 390 (1970).

[245] Checks were permitted for a limited purpose in Ridgely v. Beatty, 222 Md. 76, 81 (2002) (“The [trial] court permitted the claimant to identify each check, describe it and to state the item for which the check was given, but it would not permit him to connect such payments with any ‘agreement or understanding or transaction’ the claimant had with the decedent.,”) whereas in Boyd v. Bowen, 145 Md. App. 635, 664 (2002) the Court upheld the trial court excluding checks altogether when the claimant “had written notations on the checks that the payments were ‘loans’” to the decedent..

[246] See Reddy v. Mody, 39 Md. App. 675, 679 (1978)

[247] Rhea v. Burt, 161 Md. App. 45 1, 458 (2005); Clark v. Strasburg, 79 Md. App. 406, 411–12 (1989), rev’d on other grounds 319 Md. 583 (1990).

[248] Bekessy v. Floyd, 2015 WL 5885162 (Ct. Spec. App. July 15, 2015) (unpublished) (reviewing decisions from a number of other jurisdictions and determining that reliance upon a deposition transcript in a motion for summary judgment constituted waiver).

[249] Md. Rule 5-802.

[250] Most other states have adopted the federal evidentiary rules, or a version of it. There are extensive Advisory Committee Notes associated with the federal rules which are useful if the meaning or application of a rule is examined by a court. As to the federal structure of the hearsay rule: “The approach to hearsay in these rules is that of the common law, i.e., a general rule excluding hearsay, with exceptions under which evidence is not required to be excluded even though hearsay… This plan is submitted as calculated to encourage growth and development in this area of the law, while conserving the values and experience of the past as a guide to the future.” Advisory Introductory Note.

[251] Irving Younger, The Irving Younger Collection, Chapter 4, “Hearsay,” American Bar Association, Section of Litigation (2010)

[252] Md. Rule 5-803 (b) (3) tracks Federal Rule of Evidence 803 (3) with only stylistic changes.

[253] Although “testamentary” usually refers to bequests in a Will, the Court of Appeals held that provisions of a trust transferring property at the settlor’s death is predominantly testamentary. Upman v. Clarke, 359 Md. 32, 45 (2000).

[254] 145 U.S. 285 (1892).

[255] In some instances, the proponent wants to introduce forward-looking hearsay to prove someone other than the declarant did something. This raises thorny due process issues. See Lynn McLean, “I’m Going to Dinner with Frank”: Admissibility of Nontestimonial Statements of Intent to Prove the Actions of Someone Other Than the Speaker – and the Role of the Due Process Clause, 32 Cardozo L. Rev. 373 (2010).

[256] 290 U.S. 96 (1933) (Cardozo).

[257] Id. at 106. Nor did the statements qualify as a dying declaration under the facts of the case.

[258] In re Sayewich’s Estate, 413 A.2d 581 (N.H. 1980); Engle v. Siegel, 377 A.2d 892 (N.J. 1977). Both cases permitting the scrivener to testify as to what the testator wished to accomplish in his Will as long as this testimony did not contradict the terms of the Wills.

[259] The Advisory Committee Notes for the 1972 proposed Rule 803(3) gives the game away.

[260] 128 Md. App. 232 (1999)..

[261] 386 Md. 654 (2005).

[262] This would not be admissible in some other jurisdictions based on a similar version of 803. Estate of Gill v. Clemson Univ. Foundation, 725 S.E. 2d 516 (S.C. 2012) (The testatrix made a subsequent IRA designation telling her advisors that it was to fund her testamentary gift. The court excluded testimony of what the testatrix told her advisors when setting up the IRA designation because it was “not made at the time of the will to show her belief at that time…”)

[263] Ebert v. Ritchey, 54 Md. App. 388 (1983). The Md. Rule 5-803(b)(3) backward looking exception is limited to statements relating “to the execution, revocation, identification, or terms of declarant’s will.” Ebert, of course, does not precisely meet this criterion. It does, however, relate to the testator’s testamentary intent.

[264] Figgins v. Cochrane, 174 Md. App. 1, 32 (2007) (quoting McCormick on Evidence (4^th Ed. 1992), § 274, 227–28) (“he substantive law often makes legal rights and liabilities hinge upon the existence of a particular state of mind or feeling. Thus, such matters as the intent to steal or kill, or the intent to have a certain paper take effect as a deed or will, or the maintenance or transfer of the affections of a spouse may come into issue in litigation. When this is so, the mental or emotional state of the person becomes an ultimate object of search. It is not introduced as evidence from which the person’s earlier or later conduct may be inferred but as an operative fact upon which a cause of action or defense depends.”).

[265]156 Md. App. 527, 358 (2004) (“[H]e was articulating the opinion that, as he had already satisfied his gift, there was no need to take future action, to wit, amendment of his will. We find no abuse of discretion in the court’s admissibility ruling.”). Also, in its decision affirming the Appellate Court, the Supreme Court of Maryland likewise discussed the admissibility of future non-action. 386 Md. 654, 673 (2005) (“We find that the court did not err in allowing the testimony. The ‘intention of a testator as to whether a gift should adeem or satisfy a legacy may be shown by extrinsic or parol evidence, including [a testator’s] conduct after the execution of the will.’”). (Emphasis added).

[266] Gray v. State, 137 Md. App. 460, 499–500 (2001), rev’d on other grounds, 368 Md. 529.

[267] Figgins v. Cochrane, 174 Md. App. 1, 40 (2007), aff’d 403 Md. 392.

[268] Id. at 43.

[269] Farah v. Stout, 112 Md. App. 106 (1996)

[270] Edery v. Edery, 193 Md. App. 215 (2010).

[271] Id. at 235.

[272] Id. at 237.

[273] Restatement (Second) § 2 (Definition of Trust), Comment (b).

[274] Restatement (Third) § 2 (Definition of Trust), Comment (b); For a comparison of trusts and other relationships see Restatement (Third) § 5 (trusts and Other Relationships).

[275] Restatement (Third) § 2 (Definition of Trust), Comment (b) (“In matters within the scope of a fiduciary relationship, the fiduciary is under a duty not to profit at the expense of the other and not to enter into competition with the other without the latter’s consent, unless properly authorized to do so by a court or by the terms of the arrangement under which the relationship arose. In such matters, if the fiduciary enters into a transaction with the other and fails to make full disclosure of all relevant circumstances known to the fiduciary, or if the transaction is unfair to the other, the transaction can be set aside by the other.”).

[276] Meinhard v. Salmon, 249 N.Y. 458, 463-4, 164 N.E. 545, 546 (N.Y. 1928) (Cardozo). It is difficult to overestimate the enduring importance of Chief Judge Cardozo’s decision in Meinhard. Although it may have been somewhat devalued in academia, Meinhard has been cited in over 1000 cases from the date of the holding in 1928 through 2005. Robert W. Hillman, “Closely Held Firms and the Common Law of Fiduciary Duty: What Explains the Enduring Qualities of a Punctilio?” 41 Tulsa L. Rev. 441, 449 (app.) (2006). Ironically, the fiduciary duty among partners was shrunk by the Revised Uniform Partnership Act. See supra, footnote 6. In the dissent filed by Justices Battaglia and Greene refer to Justice Cardozo’s famous characterization of the heightened duty is imposed by fiduciary duty. Clancy v. King, 405 Md. 541, 577 (2008) (where the majority decided that the Uniform Act, adopted by Maryland, changed the historic fiduciary duty owed among partners.)

[277] R. H. Helmholz, “The Early Enforcement of Uses,” 79 Colum. L. Rev. 1503 (1979).

[278] Id. At 1504-5.

[279] Id. At 1512.

[280] “The evolution of the enforcement of uses from the ecclesiastical to Chancery jurisdiction serves as an example of the role that canon law has played in the growth and development of our common law. Modern students of legal history may regard it as part of the long continuing absorption into the secular law of remedies once available only in the courts of the Church. The rise of the Chancery jurisdiction over feoffees to uses is not, therefore, the story of the creation of a legal remedy where previously there had been none. Rather it is the story of continuing enforcement in a new setting.” Id., at 1513.

[281] “Beginning in the late fourteenth and early fifteenth centuries, beneficiaries increasingly turned for justice to the Chancellor who granted relief on the theory that he was ‘compelling the trustee to act upon the dictates of his conscience.’ In other words, the Chancellor’s role was to force the trustee to abide by his pre-existing moral or ethical obligation…Thus, the duty of loyalty developed as an equitable doctrine to support and enforce pre-existing moral norms.” Melanie B. Leslie, “Trusting Trustees: Fiduciary Duties and the Limits of Default Rules,” 94 Geo. L.J. 67, 73 (2005).

since POA act and UPC are distinguished in some ways which could hurt/help for purposes of litigation do you think a side by side comparison of the provisions discussed may be helpful? [AV1]

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The Trial Lawyers Comprehensive Guide to Maryland Fiduciary Litigation