## Facts

- Gilles H. Schoukroun, diagnosed with terminal lymphoma, executed a will and a revocable trust on June 23, 2004.
- He transferred about $155,000 into the trust and designated the trust as beneficiary of about $275,000 in transfer-on-death retirement accounts.
- The trust was revocable; Gilles served as initial trustee and retained power to withdraw assets and change beneficiaries during life; his sister was successor trustee.
- Gilles’s will left personal property to his surviving spouse, Kathleen Sexton Schoukroun, and the residuary estate to the trust; he also named Kathleen beneficiary of a $200,000 life insurance policy.
- After Gilles’s death, Kathleen renounced the will’s bequest and elected a one-third statutory share of the “net estate” under Md. Code, Est. & Trusts § 3-203.
- Kathleen argued the trust and retirement-account designations were an improper frustration of her elective share and should be treated as part of the net estate.
- The trustee and aligned parties argued the transfers were valid inter vivos dispositions and not designed to defeat Kathleen’s statutory rights.
- The circuit court found no per se invalidity and found as a fact that Gilles did not intend to defraud the surviving spouse.
- The intermediate appellate court reversed, holding Gilles’s retained control made the transfers a “fraud per se” on marital rights despite the trial court’s factual finding.
- The high court granted review to decide whether Maryland law recognizes a bright-line rule based on retained control.

## Issues

1. Whether an inter vivos transfer in which the decedent retains substantial lifetime control is automatically invalid as an unlawful frustration of the surviving spouse’s elective share.
2. What standard governs when a court may set aside nonprobate lifetime transfers alleged to defeat a surviving spouse’s statutory elective-share rights.

## Decision

- The court reversed the intermediate appellate court’s adoption of a retained-control “fraud per se” rule.
- Retained control after an inter vivos transfer is significant but not dispositive in elective-share litigation.
- The proper inquiry is case-by-case: whether the challenged transfer was a “mere device or contrivance” to evade the surviving spouse’s statutory rights.
- The court rejected the label “fraud on marital rights” as misleading and recast the doctrine as an equitable inquiry into unlawful frustration of the elective share.
- The case was remanded to the circuit court to reevaluate the transfers under the clarified equitable framework, because the trial court may have applied an overly narrow intent-focused test.

## Legal Principles

- Maryland does not apply a bright-line rule that retained control over transferred assets automatically invalidates an inter vivos transfer for elective-share purposes.
- A court may set aside an inter vivos transfer only if, under an equitable, fact-specific analysis, it functions as a “mere device or contrivance” to defeat the surviving spouse’s statutory elective share.
- The doctrine historically described as “fraud on marital rights” is not common-law fraud and should not be analyzed using fraud elements; the relevant question is unlawful frustration of the statutory elective share.
- Relevant considerations may include: the extent of retained control; timing and circumstances of the transfer; the decedent’s motives; the relationship among decedent, spouse, and beneficiaries; consistency with prior estate-planning intent; and the economic effect on the surviving spouse.

## Conclusion

The court held that revocable trusts and similar lifetime arrangements are not automatically ineffective against a surviving spouse’s elective share merely because the decedent retained control; instead, courts must decide, on a case-by-case equitable basis, whether the transfer was a contrivance to evade the spouse’s statutory rights, and it remanded for reconsideration under that standard.


Karsenty v. Schoukroun, 959 A.2d 1147 (Md. 2008)