MODIFIED ADMINISTRATION – What is it? Why (not) elect it?
Personal Representatives (PRs) of Maryland probate estates are normally required to file detailed accountings of estate financial transactions with the Register of Wills, which are then approved by the Orphans’ Court. This can be tedious and costly.
Responding to public pressure for simplification, the Maryland legislature in 1997 enacted a statute permitting an abbreviated procedure known as “Modified Administration” in most circumstances. MD Estates &Trusts §§ 5-701 to 5-710. PRs may elect Modified Administration when: (1) the residuary legatees of the Estate are limited to the PRs and individuals and entities exempt from inheritance tax; (2) the Estate is solvent; (3) the PRs are capable of making a final distribution within twelve months of their appointment; and (4) all residuary legatees consent.
When Modified Administration is elected, the PRs may dispense with most formal filings. They simply file a Final Report within 10 months after their appointment and send a copy to all residuary legatees. Only minimal detail is required on the Final Report. Attorneys’ fees and PR aggravation are almost always less in estates administered under Modified Administration.
Despite the obvious benefits of Modified Administration (efficient, cost-effective, privacy etc.), most estates do not elect this abbreviated proceeding. Of the 9,459 estates opened in Maryland in 2018, only 1,445 (15.3%) elected Modified Administration (per Register of Wills docket data as of 02/22/19). In contrast, over 80% of the estates that our firm represented elected Modified Administration.
We strongly encourage all of our clients to consider the benefits of Modified Administration for those estates that qualify because we are committed to serving our clients and administering estates efficiently and cost effectively. If you are a Personal Representative responsible for administering an estate, contact us to further discuss the benefits of Modified Administration and whether your estate qualifies.