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March 2013 Archives

Allowance for Funeral Expenses in Small Estates

Funeral expenses can often be an enormous financial burden on families who are already dealing with the emotional and financial stress caused by the death of a loved one. Last November, Maryland passed a law that increased the maximum allowance for funeral expenses that a court can authorize for small estates from $5,000 to $10,000. See MD Code, Estates and Trusts, ยง 8-106. The increase in allowable funeral expenses has a big impact in small estates that have insufficient assets to pay claims made against them because funeral expenses have priority over other claims. In addition, the law also clarifies what constitutes "funeral expenses" that can be paid from the estate. This law makes it easier for family and friends to be reimbursed for the decedent's funeral, burial, cremation, or memorial, as well as food and beverages related to a pre or post funeral or wake gathering.

Maryland attorney indicted in real estate investment fraud scheme

Earlier this week federal agents with the Department of Homeland Security and the FBI arrested Aaron G. Seltzer, a Maryland attorney. Seltzer has been indicted by a federal grand jury on nine counts of wire fraud in connection with an investment scam. According to the indictment, Seltzer solicited victims to invest in fraudulent real estate investment opportunities and used the funds invested for his own benefit.

Author, Patricia Cornwell, Wins $51 Million in Lawsuit Against Former Financial Advisers

A jury awarded crime writer Patricia Cornwell nearly $51 million in damages against her former financial management company Anchin, Block & Anchin. The complaint alleged negligence and breach of contract against her former adviser and company.

Maryland's Proposed Slayer's Law

Maryland is currently in the minority of states without a "Slayer's Law" to prevent murderers from financially benefitting from their victim's death. However, that may change with proposed legislation known as the "Ann Sue Metz Law" recently heard by the House Judiciary Committee and Senate Judicial Proceedings Committee. The proposed legislation is named after Ann Sue Metz who was brutally murdered in 2009 by Marshall Franklin Metz, her husband of 38 years. Despite being convicted of first degree murder and serving a life sentence, Mr. Metz was able to sell the house he owned with his deceased wife as well as much of her personal property in the home. The Ann Sue Metz Law provides that "A person who feloniously and intentionally kills, conspires to kill, or procures the killing of a decedent is disqualified from inheriting, taking, enjoying, receiving, or otherwise benefitting from the death, probate estate, or nonprobate property of the decedent." If it is passed by the General Assembly, the law would take effect on October 31, 2013.

SEC States One-Third of Reviewed Investment Firms Mishandling Client Assets

On March 4, 2013, the Securities and Exchange Commission (SEC) cautioned investors that they found significant deficiencies in how investment advisers handle client assets. Specifically, that advisers had failed to maintain control of clients' assets or comingled client, proprietary and employee assets in a single account.

State Securities Regulators Seek Federal Legislation to Ban Mandatory Arbitration

State regulators are urging Congress to request that the Securities and Exchange Commission (SEC) propose a regulation banning pre-dispute arbitration clauses in brokerage contracts. "States are seeing the emergence of mandatory pre-dispute arbitration clauses in contracts between state regulated investment advisers and their clients, despite the investment advisers' fiduciary duty," said Pennsylvania's securities commissioner, Steve Irwin.

Court of Appeals of Maryland Overturns $1 Billion Punitive Damages Award

On February 26, 2013, the Court of Appeals of Maryland issued an important opinion regarding claims of fraud in the case of Exxon Mobil Corporation v. Albright, et al., No. 15, September Term 2012. The decision overturns a $1 billion punitive damage award against Exxon Mobil Corp. While the case does not involve the purchase or sale of securities, the decision will impact the type of proof necessary in Maryland to prove a claim of fraud based upon disclosures to a government entity. This 132 page opinion will need to studied closely by Maryland practitioners to determine how it may impact securities fraud claims based upon false statements made to government regulators.

South Carolina Supreme Court Overturns Settlement in James Brown's Estate

On Wednesday, the South Carolina Supreme Court overturned a settlement brokered by the former attorney general of South Carolina divvying up the estate of the late James Brown, the "Godfather of Soul". The estate planning documents executed by Brown gave most of his estate to a charitable trust aimed at providing education for needy children known as The James Brown "I Feel Good" Trust. Brown's heirs brought numerous actions to set aside the will and trust documents based on undue influence and attempted to have the estate pass under the laws of intestate succession.

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