Opinion ID: 2300977
Heading Depth: 1
Heading Rank: 4

Heading: Income on Elective Share Property

Text: The Court of Special Appeals held that a spouse is entitled to income earned on assets in the net estate during the administration of the estate. Nassif, 198 Md.App. at 734, 18 A.3d at 1026-27. Green contests this holding for a number of reasons. First, he contends that because the statute does not specifically provide for an elective spouse to share in income, there is no such right. Second, he asserts that the 2003 amendments, which provided that elective spouses would thereafter be entitled to income, show that spouses were not previously entitled to income. Finally, Green argues, given that the statute mentions distributing income to legatees, but does not mention spouses, the Legislature must not have intended for elective spouses to share in income. [27] Nassif counters that the Court of Special Appeals was correct because, prior to 1969, spouses were clearly entitled to income, and nothing in the 1969 revision purported to change this rule. [28] Prior to 1969, an electing spouse was entitled to income on estate assets. See Gardner, 164 Md. at 283, 164 A. at 665 ([T]he surviving husband or wife shall take ... one-third of the surplus personal estate (if the deceased spouse shall be survived by descendants).... The words `surplus personal estate' ... mean, we think, the entire balance of personal estate, principal and income, at the time of distribution. (emphasis added)); Mercantile Trust Co. v. Schloss, 165 Md. 18, 31, 166 A. 599, 604 (1933) ([I]n settlement with the widow or her assignees, they were given one-half of the net estate, excluding therefrom any income received during the year of administration. This was error, [because] where a widow renounce[s], she [is] entitled, there being no children, to one-half of the net estate for distribution, including income[.] (emphasis added)). Thus, Green relies entirely on the position that the 1969 revision stripped a spouse of the right to income on assets in the elective share. Green argues that, in 2003, the Legislature was explicit in saying that spouses had not been entitled to income under the law as revised in 1969. He again refers to Senate Bill 312 of 2003. This bill added Section 3-203(e)(1), providing that a surviving spouse who has elected to take against a will shall be entitled to ... income earned on the net estate during the period of administration. Chapter 234 of the Acts of 2003. Green argues that, because the bill stated that its amendments shall be construed to apply only prospectively[,] a spouse's right to income on assets in the net estate was not previously part of the statutory scheme. As he points out, the floor report for Senate Bill 312 stated that one of the most significant changes in the bill was to allow the spouse to be paid a proportionate share of the income earned on the net estate during the period of administration. If such a rule had existed previously, he says, it would not have been a significant change. As support for this argument, Green selectively quotes a portion of our opinion in Chesek v. Jones , in which we observed that [a]lthough a subsequent legislative amendment of a statute is not controlling as to the meaning of the prior law, nevertheless, subsequent legislation can be considered helpful to determine legislative intent. Chesek v. Jones, 406 Md. 446, 462, 959 A.2d 795, 804 (2008). Thus, Green argues that Senate Bill 312's provision of income for the spouse shows that, previously, legislative intent was to the contrary. Chesek did not hold, however, that an amendment to a statute is evidence that the law was previously different. Indeed, it held the opposite: While appellants argue that the failure to expressly provide for delegation in the statute prior to the 2007 amendment indicates that no such delegation power existed previously, legislative intent suggests the contrary.... [T]he legislative history of the 2007 amendment reflects that the purpose of S.B. 384 ... was clarifying that the Legislative Policy Committee may delegate its authority to issue subpoenas[.] In addition, the record reflects that the Attorney General's Office testified before the House Rules Committee that the purpose was to resolve any disputes over subpoenas and witnesses' refusal to answer questions... and that the legislation merely codifies the ability of the Legislative Policy Committee to delegate its subpoena power. (Emphasis added. Citations and quotation marks omitted.) Id. Similarly, here, we are not convinced that Senate Bill 312 was intended to modify the law with respect to income. As Chesek made clear, amendments to a statute that merely clarify the law are still significant changes. See id. Senate Bill 312 also lists among its most significant changes the provision that elective share assets are to be valued as of the date of distribution, rather than the date of election[.] Chapter 234 of the Acts of 2003. As we explained above, this was the rule under the prior statute as well, at least for assets paid in kind, although the statutory language was less clear. See Maryland Code (1888), Art. 93, § 292; Kuykendall, 78 Md. at 542-43, 28 A. at 413; Gibber, supra, § 9.38. Thus, in legislative bills, prefatory clauses sometimes characterize as significant a language change that merely clarifies an earlier ambiguous statute. Moreover, even if the Legislature believed it was making a substantive change, a statement by present members of a legislative body, as to what their predecessors intended in a statute enacted several years previously, is not entitled to much weight. State v. Coleman, 423 Md. 666, 683, 33 A.3d 468, 477-78 (2011) (citations and quotation marks omitted); see also Collier v. Connolley, 285 Md. 123, 126, 400 A.2d 1107, 1108 (1979) ([W]e do not place much weight upon what the Legislature, in 1977, said was intended in a 1974 statute.); Dir. of Fin. for Balt. County v. Myers, 232 Md. 213, 218, 192 A.2d 278, 280 (1963) (holding that an amendment ... is not controlling as to the meaning of the prior law). [29] We are left, then, with Green's contention that Section 7-304(b)'s express provision that income be distributed to legatees, coupled with its silence regarding elective spouses, implies that elective spouses are not entitled to such income. In 1993, Section 7-304(b) provided: Unless the will provides otherwise, income from the assets of an estate of a decedent after the death of the testator and before distribution, including income from property used to discharge liabilities... shall be distributed as follows: (1) To specific legatees, the income from the property to which they are entitled, less [certain expenses and sums] ... [; and] (2) To all other legatees, except legatees (other than a surviving spouse) of pecuniary legacies not in trust, the balance of the income, less [certain expenses and sums]. [30] Thus, Green argues that, because the definition of legatee did not include an elective spouse, elective spouses were not entitled to share in income. Green asks us to make a negative inference from statutory silence, i.e., that because the Legislature did not mention elective spouses in Section 7-304, it intended to exclude them from sharing in income on estate assets. Were we to read Section 7-304(b) in isolation, we might agree, but we cannot ignore other provisions that undermine Green's argument. See Potomac Abatement, Inc. v. Sanchez, 424 Md. 701, 37 A.3d 972 (2012) (When, in [a statutory] scheme, two statutes, enacted at different times and not referring to each other, address the same subject, they must be read together, i.e., interpreted with reference to one another, and harmonized, to the extent possible, both with each other and with other provisions of the statutory scheme. (citations and quotation marks omitted)). Section 7-304 is not in the part of the statutory scheme dealing with an elective spouse's rights. Title 7 is titled Administration of the Estate, and Subtitle 3 pertains to Accounting. Title 3, on the other hand, is titled Intestate Succession and Statutory Shares, and Subtitle 2 pertains to the Family Allowance and Statutory Share of Surviving Spouse. Thus, looking at the statutory scheme as a whole, it appears at first blush that an elective spouse's rights would be defined in Title 3, not Title 7. The conclusion that Section 7-304(b) was not intended to define an elective spouse's rights is further confirmed by its first few words, which state: Unless the will provides otherwise[.] This phrase clarifies that the provisions of Section 7-304(b) can be overridden by the will, but an elective spouse's rights most certainly cannot be overridden by the will. See Shimp v. Huff, 315 Md. 624, 638, 556 A.2d 252, 259 (1989) ([T]he applicable statutes give a higher priority to a surviving spouse's elective share than to testamentary bequests[.]); Eugene F. Scoles and Edward C. Halbach, Jr., Problems and Materials on Decedents' Estates and Trusts 94 (5th ed. 1993) ([R]ights in the nature of dower... cannot be defeated by will.). Thus, we have further reason to believe that the Legislature did not intend to define an elective spouse's rights in Section 7-304. Moreover, although the statute is silent as to a spouse's right to income, the law in place when the statute was enacted was not. As mentioned above, our cases were clear that a spouse's elective share was a percentage of the net estate for distribution, including income[.] Mercantile Trust, 165 Md. at 31, 166 A. at 604 (emphasis added); see Gardner, 164 Md. at 283, 164 A. at 664-65. The Legislature explicitly preserved this rule when it created the current statutory scheme in 1969. As the Henderson Commission explained, certain proposals were made that would have modified the Maryland law with respect to the widow's statutory share. [But t]here seemed to be considerable opposition to this modification... and therefore the Commission has decided to retain the present law. (Emphasis added.) Summary of Changes made in Second Report of Governor's Commission to Review and Revise the Testamentary Law of Maryland (Jan. 31, 1969); see also Comments to Maryland Code (1957, 1969 Repl.Vol.), Art. 93, §§ 3-203 ([T]he proportional interest of the spouse under former law ... is retained.), 3-102 (providing the method of calculation for a spouse's elective share and stating: This section preserves the proportional distribution to the surviving spouse contained in former §§ 134-137). Because the Legislature said that it decided to retain the present law, we affirm the Court of Special Appeals' holding that there is nothing in the language of the statute as it existed in 1993 that convinces us that the Legislature intended to change the law, with respect to sharing of income. Nassif, 198 Md.App. at 734, 18 A.3d at 1027.