Maine Bankers Association Expo April 11, 2019 PROBATE CODE CHANGES – AN OVERVIEW Presented by Eaton Peabody Gretchen Jones Nathaniel S. Putnam 167 Park Row 80 Exchange Street P.O. Box 9 P.O. Box 1210 Brunswick, ME 04011 Bangor, ME 04402 (207) 729-1144 (207) 947-0111 gjones@eatonpeabody.com nputnam@eatonpeabody.com Augusta I Augusta I Bangor I Brunswick I Bangor I Brunswick I Ellsworth I Ellsworth I Portland Portland eatonpeabody.com eatonpeabody.com
Legal Disclaimer The purpose of this presentation is to provide a general overview of its subject matter. It does not and is not intended to provide legal or other professional advice and must not be relied upon as such. You should consult with a qualified legal professional for specific questions and requirements. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
LD 123/PL Ch. 402 – An Act to Recodify and Revise the Maine Probate Code Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Repeals Title 18-A Enacts Title 18-C Effective Date July 1, 2019 Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Articles 1 – 4 – Broad Themes • increased emphasis on testator’s intent • addresses increased use and importance of nonprobate transfers • recognition of “non - traditional families” Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Article 1 – General Provisions, Definitions and Jurisdiction Governing Instrument - "Governing instrument" means a deed, will, trust or insurance or annuity policy; account with POD designation; security registered in beneficiary form, TOD; transfer on death deed, TOD; pension, profit-sharing, retirement or similar benefit plan; instrument creating or exercising a power of appointment or a power of attorney; or dispositive, appointive or nominative instrument of any similar type. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Article 2 – Intestacy, Will and Donative Transfers Important substantive changes: Intestacy – law that governs distribution of probate estate if no Will • increases share of surviving spouse in most situations Elective Share Statute – prohibits spousal disinheritance • substantially changes calculation of what spouse is entitled to • reflects economic partnership their of marriage Simultaneous Death – must survive by 120 hours Antilapse – governs what happens if beneficiary under a Will dies before testator • extends applicability to include stepchildren Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Article 2 – Intestacy, Will and Donative Transfers Important substantive changes (cont.): Expansion of “antilapse” concept – in addition to Wills, antilapse will apply to life insurance, retirement plans, PoD/ToD accounts Impact of Divorce on “governing instruments” • revokes any disposition of property to former spouse, or nomination of a former spouse to serve in fiduciary capacity (e.g., PR., Trustee, etc.) • revokes any disposition of property to relative of former spouse, or nomination of such relative to serve in fiduciary capacity unless, after divorce, relative and divorced individual are still related through “blood, adoption, or affinity ” ( Huh? ) Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Article 2 – Intestacy, Will and Donative Transfers Important substantive changes (cont.): Impact of Divorce on “governing instruments” (cont.) • applies to Wills as well as trust, insurance policies, annuities, POD/TOD designations, etc. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
How might these substantive changes impact banks? Example : Decedent owns an account that he has designated A and B as the beneficiaries under a ToD designation. Decedent dies, and A comes into a branch and presents a Death Certificate of D as well as B. Who is entitled to the account proceeds? Questions : Was B a grandparent, a descendent of a grandparent, or a stepchild of Decedent? Does the bank have an obligation to ask this question? If it does not and pays the account proceeds to A, what happens when B’s child later comes into the bank and explains that Decedent and B were cousins (i.e., they were descendants of the same grandparent)? What should the bank do? Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Liability protection: “Payor” protected from liability for making payment under the terms of the beneficiary designation until payor has received written notice of a claim Written notice must be mailed to or served upon payor in he same manner as a summons in a civil proceeding Upon receipt of written notice of claim, payor may pay any amount to the probate court with jurisdiction over Decedent’s estate Similar provisions for claims based on elective share, simultaneous death, divorce Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Article 3 – Probate of Will and Administration Relatively few changes Collection of Small Estates by Affidavit • amount increased from $20,000 to $40,000. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Article 5 – Uniform Guardianship and Protective Proceedings Act • Maine is first state to adopt • focus on least restrictive arrangement • increased guidance and clarity • enhanced monitoring Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Acceptance of Authority of Guardian or Conservator: • mandatory and discretionary refusals to recognize authority Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Mandatory: Actual knowledge or reasonable belief that letters are invalid or guardian/conservator is exceeding or improperly exercising authority or that guardian/conservator is subjecting the protected person to physical or financial abuse Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Discretionary: Proposed action is inconsistent with the law A report has been made to protective services Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Must report refusal to the Court. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
A guardian of an adult has a duty to administer assets of the person having a value of $5,000 or less • what does this mean? Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Multiple Party Accounts – Article 6 Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
No More “Joint” Accounts Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Specifically permits “multiple party”, i.e. “joint”, accounts without survivorship rights; on death of one party, that party’s “net contribution” is property of his/her estate. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Setoff rights – only against the debtor’s “net contribution” – not against full balance in the account. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Presumption that “net contribution” of spouses is equal. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Agency Accounts – Finally! Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Real Property Transfers on Death Act: applies where transferor dies on or after July 1, 2019 Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Deed must state transfer is to occur at death. Must be recorded prior to death. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Revocable at any time prior to death. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Does not affect mortgages in effect at time of death. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Model Form provided Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
LD 968/PL Ch. 390 – An Act to Help Prevent Financial Elder Abuse Effective Date Delayed to 7/1/2019 Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Must include question on document creating a joint account or adding a joint owner to an existing sole account: Do you intend for the sum remaining upon your death to belong to the surviving party or parties? Yes or No. Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Banking Code § 427(13) State Charters Federal and out of state charters with offices in Maine Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
If any party answers “No” , will you open the account? Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
Augusta I Bangor I Brunswick I Ellsworth I Portland eatonpeabody.com
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