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Keywords

appealtrialtrustconstructive trust

statuteappealestate planningtrust

Related Cases

Karsenty v. Schoukroun, 406 Md. 469, 959 A.2d 1147

Facts

Gilles H. Schoukroun created a revocable trust for his daughter Lauren and transferred various assets into it shortly before his death. He had previously been married to Bernadette, with whom he had Lauren, and later married Kathleen. After his death, Kathleen claimed that the transfers to the trust were fraudulent and sought a share of the estate, while Bernadette counterclaimed for a constructive trust on life insurance proceeds. The trial court found no fraud on Gilles's part, leading to appeals from both parties.

This case centers on the estate planning arrangements that Gilles made in the last three to four months of his life.

Issue

Whether an inter vivos transfer, in which a deceased spouse retained control over the transferred property during his lifetime, constitutes a per se violation of the surviving spouse's statutory, elective right to a percentage of the deceased spouse's net estate.

We are asked in this case to decide whether an inter vivos transfer, in which a deceased spouse retained control over the transferred property during his lifetime, constitutes a per se violation of the surviving spouse's statutory, elective right to a percentage of the deceased spouse's net estate under Maryland Code (1974, 2001 Repl.Vol., 2008 Cum.Supp.), Estates and Trusts Article, § 3–203.

Rule

The court held that a decedent's retention of control over transferred assets does not automatically constitute fraud on the surviving spouse's marital rights, and that the determination of whether a transfer frustrates a spouse's elective share must consider the decedent's intent and the nature of the transfer.

The term 'net estate,' as it is used in Maryland's elective share statute, 'means the property of the decedent passing by testate succession.'

Analysis

The court analyzed the facts surrounding Gilles's creation of the trust and his retention of control over the assets. It concluded that while Gilles did retain control, this alone did not establish fraud. The court emphasized the need to evaluate the decedent's intent and the specific circumstances of the transfer rather than applying a blanket rule regarding control.

The pertinent case-law makes clear that all of the relevant facts and circumstances should be considered and a determination made on a case-by-case basis.

Conclusion

The Court of Appeals reversed the judgment of the intermediate appellate court and remanded the case for further proceedings, clarifying the legal standards applicable to inter vivos transfers in the context of a surviving spouse's elective share.

Judgment of Court of Special Appeals reversed and remanded with directions.

Who won?

The trustee and the decedent's daughter prevailed in the case, as the court found that the transfers to the trust were not fraudulent and did not violate the surviving spouse's rights.

The circuit court was not clearly erroneous in finding that Mr. Schoukroun had not acted with the intent to defraud his widow or his daughter.

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