Karsenty v. Schoukroun

HARRELL, J. We are asked in this case to decide whether an inter vivos transfer, in which a deceased spouse retained control over the transferred property during his lifetime, constitutes a per se violation of the surviving spouse’s statutory, elective right to a percentage of the deceased spouse’s net estate under Maryland Code (1974, 2001 Repl.Vol., 2008 Cum.Supp.), Estates and Trusts Article, § 3-203. 1 The Circuit Court for Anne Arundel County held that it does not, concluding that the decedent did not intend to defraud his surviving spouse when he transferred assets to a revocable trust that he created for his daughter (by a prior marriage) and named that trust as the beneficiary of two IRA accounts. The Court of Special Appeals reversed the trial court in a reported opinion, Sckoukroun v. Karsenty, 177 Md.App. 615 , 937 A.2d 262 (2007), where it held that, although the trial court was not clearly ⁴⁷⁷ erroneous in finding that the decedent did not intend to defraud his surviving spouse, the decedent’s retained control of the transferred assets rendered the transfer a fraud per se on the surviving spouse’s marital rights. We granted the trustee’s Petition for a Writ of Certiorari. Karsenty v. Schoukroun, 404 Md. 152 , 945 A.2d 1270 (2008).

The successful petition posed the following question: Whether Maryland has a bright-line rule establishing that in every case in which a deceased spouse has transferred property with a retained interest, the transfer constitutes a fraud on the surviving spouse’s elective share regardless of motive, the extent of control, and other equitable factors? For the reasons to be explained, we shall reverse the judgment of the intermediate appellate court; however, because we remain concerned by the apparent legal test applied by the trial court in its ruling, we shall direct remand of this case to the trial court with further guidance. As we shall explain, the body of precedents forming the doctrine that, until now, has been referred to as “fraud on marital rights” has really little to do with common law fraud as typically understood. We reject that phraseology as inconsistent with the weight of Maryland precedent.

We also shall take this opportunity to clarify somewhat the applicable primary factors to consider when determining whether to set aside an inter vivos transfer that frustrates a surviving spouse’s right to an elective share of the deceased spouse’s estate. Facts This case arises from a decedent’s inter vivos distribution of his assets through the use of both probate and non-probate estate planning arrangements. On 10 October 1987, Gilles H. Schoukroun (“Gilíes” or “Decedent”) married his first wife, Bernadette. 2 The marriage produced one child, Lauren Schoukroun (“Lauren”), who was born on 20 April 1990. When Lauren was six years old, Gilíes and Bernadette ended ⁴⁷⁸ their marriage.

A Judgment of Absolute Divorce was rendered on 5 September 1995 by the Circuit Court for Anne Arundel County. Before the divorce, however, Gilíes and Bernadette entered into a separation agreement whereby they agreed to share custody of Lauren and agreed to pay the expenses of her care. The agreement also required Gilíes and Bernadette each to maintain a life insurance policy in the amount of at least $150,000, naming Lauren as the beneficiary. Gilíes, however, did not purchase such a policy.

Sometime in 1999, Gilles met Kathleen Sexton (“Kathleen”) and, by October of that year, they became engaged to be married. Kathleen had been married previously and had a child from that marriage. In the Spring of 2000, before they married, Gilles and Kathleen took out life insurance policies from Zurich Kemper. Gilles purchased a policy on his life, naming Kathleen as the beneficiary, in the amount of $200,000. 3 Kathleen made her policy benefits payable to her estate in the amount of $200,000, with her son from her prior marriage as the beneficiary of her estate. 4 Gilles and Kathleen were married in Worcester County on 3 July 2000. 5 At the time, they were 40 and 45 years old, respectively.

On 29 January 2004, Gilles learned that he had lymphoma. He underwent chemotherapy and radiation treatment between then and September 2004. He experienced little success with the conventional treatments. His oncologist told him that he should consider a stem cell transplant.

Gilles had the transplant in September 2004 and was declared cancer free by early October 2004. About two weeks later, however, he was admitted to the hospital in the middle of the night. Gilles died on 18 October 2004. At the time of his death, Gilles was 44 ⁴⁷⁹ years old and had been married to Kathleen for four years.

Lauren, his and Bernadette’s child, was 14 years old when Gilles died. This case centers on the estate planning arrangements that Gilles made in the last three to four months of his life. On 23 June 2004, Gilles prepared and executed his Last Will and Testament and a document known as the Gilles H. Schoukroun Trust (the “Trust”). In his will, Gilles named his sister, Maryse Karsenty (“Maryse”), the Personal Representative of his estate.

The will provided, “I give all my tangible personal property, together with any insurance providing coverage thereon, to my wife, KATHLEEN SEXTON....” Gilles bequeathed the “rest, residue and remainder” of the estate to the Trust. With respect to the Trust, Gilíes named Lauren the beneficiary. He named himself settlor and trustee during his lifetime, and he appointed Maryse trustee upon his death. In the event Maryse could not serve as trustee, Gilíes named Kathleen as the alternative trustee.

Clause Two of the Trust provided: The Settlor reserves the right to amend or terminate this trust from time to time by notice in writing delivered to the Trustee during the lifetime of the Settlor, and any amendment or termination shall be effective immediately upon delivery thereof to the Trustee, except that changes with respect to the Trustee’s duties, liabilities or compensation shall not be effective without its consent. Upon the death of the Settlor, this trust shall be irrevocable and there shall be no right to alter, amend, revoke or terminate this trust or any of its provisions. Clause Three of the Trust, in pertinent part, provided: The Trustee shall pay the net income from this trust to or for the benefit of the Settlor during the Settlor’s lifetime, in such annual or more frequent installments as the Trustee and the Settlor may agree, and the Trustee shall pay so much or all of the principal of the trust to the Settlor as he shall from time to time request in a signed writing delivered to the Trustee. ⁴⁸⁰ On the same day that he created the Trust, Gilíes transferred into the Trust assets from three financial accounts: (1) one at E*Trade Financial, worth approximately $29,037.15; (2) one at Fidelity Investments, worth approximately $75,257.25; and (3) a second at Fidelity Investments, worth approximately $49,034.67. On 12 July 2004, Gilíes named the Trust as the beneficiary of two IRA transfer-on-death (“TOD”) accounts at Fidelity Investments, one worth approximately $257,863.31, the other worth approximately $14,069.51.

It was clear that Fidelity managed the investments in the larger TOD account (there was no similar evidence offered as to the smaller). It appears from the record that Gilíes took no distributions from either of the TOD accounts during his lifetime. 6 When Gilíes died, Lauren became the sole beneficiary of the Trust. Kathleen received the $200,000 proceeds from Gilles’s Zurich Kemper life insurance policy. In accordance with Gilles’s will, Kathleen also received his 2003 Toyota Highlander, the outstanding loan balance for which he had recently paid off.

The vehicle was valued at approximately $22,000. On 2 February 2005, Gilles’s will was admitted to administrative probate by the Orphans’ Court in Anne Arundel County. Kathleen renounced Gilles’s will and, on 17 February 2005, filed an election to take a statutory share of Gilles’s estate under Section 3-203 of the Estates and Trusts Article of the Maryland Code. Shortly thereafter, Kathleen filed a complaint against Maryse, as trustee of the Trust, and Bernadette, as Lauren’s guardian, in the Circuit Court for Anne Arundel County claiming fraud on her marital rights and constructive fraud.

That action is the genesis of the present litigation. In short, Kathleen alleged that, despite the Trust’s non-probate nature, Gilíes retained lifetime dominion and control over the Trust, its assets, and the TOD accounts, of which the Trust was the beneficiary, thereby unlawfully depriving ⁴⁸¹ her of her statutory share of his net estate. Kathleen principally relied on Knell v. Price, 318 Md. 501 , 569 A.2d 636 (1990). Knell applied the doctrine, heretofore referred to as fraud on marital rights, to invalidate a decedent’s inter vivos property transfer to his live-in companion because the decedent retained possession and absolute control of the property during his life.

Kathleen argued that Knell established a bright-line rule that absolute control of property by a decedent spouse is a per se fraud on a surviving spouse’s marital right to an elective share of the decedent’s estate. Alternatively, she argued that, absent the per se rule, the factual circumstances of this case necessitated the conclusion that the Trust and the TOD accounts should be set aside as frauds on her marital rights. Kathleen sought to have the Court impose a constructive trust on the funds in the Trust. Bernadette, on Lauren’s behalf, filed a counterclaim against Kathleen requesting that a constructive trust be imposed on the proceeds from Gilles’s Zurich Kemper life insurance policy.

Bernadette alleged that the proceeds properly were Lauren’s because Gilíes had an obligation, under the terms of the 1999 separation agreement, to purchase and maintain a life insurance policy for Lauren’s benefit and that he failed to do so. 7 During a two-day bench trial, Kathleen testified that, during Gilles’s illness, she frequently took him to his medical appointments and assisted him in other respects. She claimed that she did not know that Gilíes had a prior obligation to maintain a life insurance policy for Lauren’s benefit and that, although she was aware that Gilíes created a will and a trust, she did not know the details of either. Kathleen explained that, during their marriage, the couple lived in her home in Crofton, Maryland, and that Gilíes paid ⁴⁸² her $1,200 dollars per month to assist her with her mortgage. The trial judge found that: [T]hey maintained essentially separate financial lifestyles.

He worked. She worked. He had accounts. She had accounts.

They had a joint account. But essentially it was like I have my house, you’re living here, you pay — he paid her $1,200 a month that she used to pay the mortgage. They really didn’t commingle their funds to any great extent. There was testimony, however, that Gilíes and Kathleen, beginning in October 2001, discussed separating at various times.

In addition to the $200,000 life insurance policy proceeds and the Toyota Highlander that she received under Gilles’s will, Kathleen testified that she also received $12,680.91 as a death benefit from a thrift savings plan. Furthermore, Kathleen acknowledged that, before Gilíes died, he paid $17,000 to satisfy fully the balance due on her car loan. Besides the arrangements that Gilíes made for her, Kathleen described her general financial status. When Gilíes died, she was working as the Director of the Admissions and Records Office at the Prince George’s Community College, earning approximately $74,000 annually.

Since his death, she accepted a new position in the College’s Continuing Education Division and began earning $79,519 annually. She receives a pension from the Maryland State Teachers Retirement Association, has a mutual fund account consisting of approximately $16,000, and the house she owns is worth an estimated $450,000, though subject to a mortgage of $113,000 at the time of trial. In addition to becoming the beneficiary of the Trust, which the trial court valued at approximately $422,000 at the time of Gilles’s death, 8 testimony revealed that Lauren receives ap ⁴⁸³ proximately $900 a month as a survivor benefit from Gilles’s U.S. Air Force pension and approximately $1,200 a month from Social Security. At the conclusion of the receipt of evidence, the trial judge resolved Kathleen’s claims against her and denied Bernadette’s request for the imposition of a constructive trust on the insurance proceeds received by Kathleen.

Regarding Kathleen’s claims, the trial judge rendered the following findings of fact and conclusions of law: Let me tell you that I find as a matter of fact that there is no fraud on the part of Mr. Gilíes Schoukroun in the creation of this trust, actual or even constructive fraud. I find no actual fraud whatsoever. And I find no constructive fraud. I am impelled in that direction by a number of things.

First of all, his actions took place at a time when he knew he was sick. Now I can’t say I knew he was dying because after the stem cell transplants, they gave him good news for 20 or 30 minutes. So I don’t know. Its not proven to me what he knew at the time.

What I do know is he knew he was sick. And he had been sick for some period of time. So that when — and when he sat down to draw this last will and testament and this trust, I have to find that he knew exactly what he was doing vis-a-vis his assets. It is apparent that what he was doing was setting up a trust for Lauren____Interestingly enough, when he drew both the trust and his will, he set up Ms. Karsenty as the trustee and the personal representative.

But if she were unable to serve or declined to serve, he set up the plaintiff as the trustee and/or personal representative, which tells me that he certainly wasn’t trying to defraud Ms. Sexton. In fact, quite the contrary, he was in reliance on her. He relied on her. He intended to rely on her if he had to, if it became necessary, if his sister couldn’t serve.

It doesn’t sound like the actions of somebody who is trying to defraud another. And everything I’ve heard about ⁴⁸⁴ this man, this estate, these trusts, imply or tells me that he was trying to cover all bases. He was trying to cover everybody. Now what he didn’t do is, of course, he didn’t take out an insurance policy that he was supposed to take out.

But let me finish up. It is urged upon me that I find Knell versus Price in the Court of Appeals establishes a per se guideline for fraud in cases where one spouse disposes of their property by means of, in this case, a trust and, in setting up that trust, sets up a revocable trust, which gives them absolute control up through and to the time of their death, that that is per se a fraud upon the marital rights of their then-existing spouse. Now while I think that’s what Judge Orth said in Knell versus Price, I think I agree with [Bernadette’s attorney] that, while it may not be the clearest thing you can read, but he says I’m talking about this case, I’m talking about these facts. And the facts in that case were that Mr. Knell strawdeeded the property out and strawdeeded it back.

And the net result was he ended up with a life estate in which he had reserved to himself the absolute powers of disposition up until the time of his death. But I read that to refer to that case and that case alone, those facts and those facts alone. A deed, a deeded situation of real property. It is not real clear, but that’s what I read.

This is a case, however, of a [revocable] trust, a very common way of handling one’s estate prior to death to avoid the testamentary laws, very common____ Anyway, I don’t think Knell versus Price controls this case. I do not think that the creation of a revocable trust to the benefit of one’s child, and admittedly in derogation of the estate, and as a consequence of the wife, her one-third entitlement, is a per se act of fraud. If I’m wrong in that, it should be very easy to reverse me. Also, as a I said earlier, I reiterate I find no instance, no instance, of fraudulent conduct on the part of Mr. Schouk ⁴⁸⁵ roun in dealing with Kathleen Sexton Schoukroun.

So I decline — I find for all defendants in the complaint. As observed supra, the trial court also denied the constructive trust that Bernadette requested be placed on the insurance proceeds paid to Kathleen. Kathleen and Bernadette, respectively, appealed to the Court of Special Appeals, which reversed the trial court’s disposition of Kathleen’s claim of fraud on her marital rights and affirmed the trial court’s denial of Bernadette’s request for a constructive trust. 9 In its reported opinion, the intermediate appellate court reasoned as follows: The circuit court was not clearly erroneous in finding that Mr. Schoukroun had not acted with the intent to defraud his widow or his daughter. That finding, however, is not of dispositive consequence to Kathleen’s appeal.

Kathleen relies on Knell v. Price, 318 Md. 501 , 569 A.2d 636 (1990), for the proposition that — as a matter of law — a deceased spouse’s transfer of property during the marriage constitutes fraud on marital rights of the surviving spouse whenever, as is the situation in the case at bar, the “transfer” was not “complete, absolute, and unconditional.” .... We are persuaded that Kathleen’s interpretation of Knell is correct. We therefore hold that Mr. Schoukroun’s decision to retain the power to revoke the Trust requires that the assets of the Trust be included in his estate for purposes of calculating Kathleen’s statutory share. The Knell decision also applies to the financial accounts that were to be transferred to the Trust upon Mr. Schoukroun’s death.

During his life, Mr. Schoukroun retained the power to alter the beneficiary of the financial accounts he owned at Fidelity Investments. As we interpret the holding in Knell , even though the circuit court was not clearly erroneous in ⁴⁸⁶ finding that none of Mr. Schoukroun’s actions were undertaken with a “fraudulent intent,” the assets in those accounts must also be included in his estate for purposes of calculating Kathleen’s statutory share. Schoukroun, 177 Md.App. at 631-34 , 937 A.2d at 272-73 . We granted Maryse’s Petition for a Writ of Certiorari to determine whether the intermediate appellate court erred in holding that a decedent’s inter vivos property transfer is a per se fraud on her or his surviving spouse’s marital rights where the decedent retained dominion and control over the transferred property during her or his lifetime.

Karsenty v. Schoukroun, 404 Md. 152 , 945 A.2d 1270 (2008). 10 We also granted Kathleen’s Conditional Cross-Petition for a Writ of Certiorari to determine whether the intermediate appellate court erred as a matter of law in holding that the trial court was not clearly erroneous in finding that Gilíes did not intend to perpetrate a fraud on Kathleen’s marital rights. Id. 11 ⁴⁸⁷ Analysis I. Kathleen renounced her inheritance under Gilles’s will and invoked her right to an elective share of his estate, which she contends should include the Trust and the TOD accounts. Accordingly, the starting point of our analysis of her claims is Maryland’s elective share statute, Maryland Code (1974, 2001 Repl.Vol., 2008 Cum.Supp.), Estates and Trusts Article, § 3-203. 12 As we have noted, the “right of a spouse to take a share of an Estate in contravention of a Will ... [is] entirely statutory.” Downes v. Downes, 388 Md. 561, 573 , 880 A.2d 343 , 350 n. 5 (2005). Section 3-203(b) provides: Instead of property left to the surviving spouse by will, the surviving spouse may elect to take a one-third share of the net estate if there is also surviving issue, or a one-half share of the net estate if there is no surviving issue.

In other words, a surviving spouse, who is dissatisfied with her or his inheritance, has the right to “receive an elective share of the decedent’s estate, regardless of the provisions contained in the decedent’s will.” Skimp v. Huff, 315 Md. 624, 645-46 , 556 A.2d 252, 263 (1989). When construing a statute, we are mindful that “[i]f the language is clear and unambiguous, we ordinarily ‘need not look beyond the statute’s provisions and our analysis ends.’ ” Opert, v. Criminal Injuries Compensation Bd., 403 Md. 587, 593 , 943 A.2d 1229, 1233 (2008) (quoting Barbre v. Pope, 402 Md. 157, 172 , 935 A.2d 699, 708 (2007)). In Downes , we considered the statutory provision for extending the time ⁴⁸⁸ within which a surviving spouse must choose whether to elect against a will. 388 Md. at 565 , 880 A.2d at 345 . We held there that the Orphans’ Court did not possess the authority to grant an extension after the time provided for in the statute expired.

Id. In construing that statute, we stated: We have stated the controlling principles of statutory construction so often that only the briefest exposition is necessary. Our predominant mission is to ascertain and implement the legislative intent, which is to be derived, if possible, from the language of the statute (or Rule) itself. If the language is clear and unambiguous, our search for legislative intent ends and we apply the language as written in a common sense manner.

Id. at 571 , 880 A.2d at 349 . Section 3-203 is clear and unambiguous with respect to the Trust and the TOD accounts in this case. The term “net estate,” as it is used in Maryland’s elective share statute, “means the property of the decedent passing by testate succession.” Estates and Trusts Art. § 3-203(a) (italics added). This includes only property in which the decedent “has some interest ... which will survive his death.” 1 Page on the Law of Wills § 16.10 (2003). 13 Here, the Trust and the TOD accounts fall outside the definition of “net estate” because Gilles did not have any interest in either that survived his death.

When Gilles created the Trust, Lauren received a vested, albeit revocable, interest therein; accordingly, Lauren became the sole beneficiary of the Trust by operation of law when Gilles died. See Shaffer v. Lohr, 264 Md. 397, 407 , 287 A.2d 42, 48 (1972). Likewise, the TOD accounts transferred to the Trust upon Gilles’s death “by reason of the contract” between him and Fidelity Investments with which the accounts were registered. See Maryland Code (1974, 2001 Repl. ⁴⁸⁹ Vol.), Estates and Trusts Article § 16-109(a).

Thus, by its plain language, Section 3-203 does not permit Kathleen to take a share of the Trust assets or the TOD accounts. We must respect the “net estate” model chosen by the General Assembly. Many of our sister states, however, have taken a different approach with respect to their elective share statutes, adopting some form of the “augmented estate” concept. Although there are differences between the models adopted by the various augmented estate jurisdictions, the pith of the augmented estate concept is that a surviving spouse’s elective share is calculated by including non-probate assets over which the decedent had dominion and control during her or his lifetime.

See, e.g., Del.Code Ann. tit. 12, § 902 (West 2008); N.J. Stat. Ann. § 3B:8-3 (West 2008); N.Y. Est. Powers & Trusts Law § 5 -l.l-A(b)(1) (West 2008); 20 Pa. Cons.Stat. § 2203(a) (West 2008). 14 Although Kathleen urges that we decide this case, ostensibly, under the doctrine previously referred to as fraud on marital rights, what she seeks is to establish dominion and control by the decedent during his life as the sole touchstone for determining whether a non-probate asset will be included in the pool of assets that are subject to the elective share. In effect, if we were to hold that dominion and control (even absolute control) is per se fraud on marital rights, as Kathleen urges, we would be imposing, by judicial fiat, a kind of augmented estate model eschewed by the Legislature.

See Alavez v. MVA, 402 Md. 727, 737 , 939 A.2d 139, 145 (2008) (commenting that the Legislature provided only two exceptions to the statute requiring reciprocity for the suspension of ⁴⁹⁰ an out-of-state driver’s license and that “[i]t is not for this Court, by judicial fíat, to add another one”). Such a result would allow a surviving spouse to incorporate all non-probate assets, over which the decedent had control during her or his lifetime, into the elective share asset pool, regardless of the circumstances of the underlying inter vivos transfer. This we shall not endorse. The net estate, not an augmented estate, is the model provided for by the clear and unambiguous language of Section 3-203, and we must be cognizant of that model when scrutinizing non-probate estate planning arrangements like those at issue in this case.

See Melvin J. Sykes, Inter Vivos Transfers in Violation of the Rights of Surviving Spouses, 10 Md. L.Rev. 1, 3 (1949) (noting that the problem of determining what is and is not a fraud on a surviving spouse’s marital rights “technically, is one of statutory interpretation”). 15 Nonetheless, Maryland precedent long has recognized that a court may invalidate a deceased spouse’s inter vivos transfer where equity requires that the transferred property be considered part of her or his estate for the purpose of calculating the surviving spouse’s statutory share. E.g., Knell, 318 Md. at 512 , 569 A.2d at 641 ; Jaworski v. Wisniewski, 149 Md. 109, 120 , 131 A. 40, 44 (1925); Hays v. Henry, 1 Md. Chan. 337, 341 (1851). To determine whether equity requires that a transfer be set aside, a court must ask whether the decedent intended to part with ownership of the property in form only, while remaining the true owner of the property during her or his lifetime; if the decedent intended that the transfer divest her or him of ownership in form, but not in substance, the transaction unlawfully frustrates the statutory protection of the decedent’s surviving spouse and, accordingly, is invalid. ⁴⁹¹ See Winters v. Pierson, 254 Md. 576, 584-85 , 255 A.2d 22, 26-27 (1969); Allender v. Allender, 199 Md. 541, 549 , 87 A.2d 608, 611 (1952); Mushaw v. Mushaw, 183 Md. 511, 519 , 39 A.2d 465, 468-69 (1944). Kathleen urges that our opinion in Knell v. Price, 318 Md. 501 , 569 A.2d 636 (1990), established a “bright-line” or per se rule that a decedent’s absolute dominion over and control of an asset during the decedent’s lifetime will cause that asset’s non-probate disposition to be set aside as violative of the surviving spouse’s marital rights because such a transfer is merely colorable.

We disagree. In fact, we acknowledged in Knell that “[i]t may be that ‘[n]o general and completely satisfactory rule to determine the validity or invalidity of transfers alleged to be in fraud of marital rights has yet been evolved in this State.’ ” 318 Md. at 512 , 569 A.2d at 641 (quoting Whittington v. Whittington 205 Md. 1, 14 , 106 A.2d 72, 78 (1954)). Kathleen’s premise — that a colorable transfer is invalid as to a surviving spouse electing against a will — is correct; however, retention of dominion and control alone (even if absolute) does not necessitate, in all cases, a finding that a transfer is merely colorable. The pertinent case-law makes clear that all of the relevant facts and circumstances should be considered and a determination made on a case-by-case basis.

See Winters, 254 Md. at 581 , 255 A.2d at 24 (“If any conclusion can be drawn from our prior decisions, it is that questions like those here presented must be resolved on a case-by-case basis.”); Sturgis v. Citizens’ Nat’l Bank of Pocomoke City, 152 Md. 654, 660 , 137 A. 378, 381 (1927) (“[Rjeservations of right or dominion ... might properly be considered in connection with other facts to determine whether there has been a fraudulent use of the form of gift.... ”); Feigley v. Feigley, 7 Md. 537, 562 (1855) (“[W]e ... must call to our aid every fact, however remote and trivial it may be, which can throw light upon the subject.”). 16 Moreover, we long have recognized that an inter ⁴⁹² vivos transfer in which a decedent retained sole lifetime control over the transferred property is not, by itself, violative of the surviving spouse’s statutory share. E.g., Winters, 254 Md. at 585 , 255 A.2d at 27 (joint savings and checking accounts subject only to withdrawal by the decedent); Bestry v. Dorn, 180 Md. 42, 44-45 , 22 A.2d 552, 553 (1941) (a leasehold interest in which the decedent retained the right to “mortgage, sell or otherwise dispose of or encumber”). Stated simply, “retention of control does not in and of itself make the transaction a sham. . . .” Gianakos v. Magiros, 234 Md. 14, 32 , 197 A.2d 897, 906 (1964). Even more to the point, we held that a revocable inter vivos trust is not an actionable frustration of a surviving spouse’s statutory rights unless the circumstances indicate that there was an improper use of the trust form.

Mushaw, 183 Md. at 519 , 39 A.2d at 468 ; Sturgis, 152 Md. at 660 , 137 A. at 381 ; Brown v. Fid. Trust Co., 126 Md. 175, 179-80 , 94 A. 523, 524 (1915). In Brown v. Fid. Trust Co., we refused to set aside a revocable inter vivos deed of trust as violative of a surviving spouse’s rights because we concluded that the deed was a “complete and bona fide transfer____” 126 Md. at 184 , 94 A. at 526 .

There, the decedent conveyed to a trust company “stock and bond securities and cash money, amounting to about $33,550, ... to be held in trust for the uses and purposes and ■with the powers [ ] set out in the deed.” Id. at 177 , 94 A. at 524 . Like Gilles, the decedent in Brown retained a life estate in the trust income and the power to revoke the trust at any time. Id. at 178-79 , 94 A. at 524 . 17 During the decedent’s ⁴⁹³ lifetime, the trustee was to “pay over the entire net income to [the decedent], ... as she may request from time to time.” Id. at 178 , 94 A. at 524 . Upon her death, the trustee was to pay $50 per month from the trust’s net income to her surviving husband for the rest of his life, and then $50 per month to the decedent’s sister and brother.

Id. at 178 , 94 A. at 524 . The deed directed the trustee to disburse the corpus and remaining income to various charitable organizations following the death of the sister and brother. Id. at 178-79 , 94 A. at 524 . On these facts, we held that the decedent’s inter vivos deed of trust was “a complete and bona fide transfer of the property ... for the purposes named therein.” Id. at 184 , 94 A. at 526 .

In our analysis, although we did not discuss specifically the decedent’s life estate or right of revocation, we observed that all of the terms of the deed were reasonable and allowed that consideration to guide our analysis. We stated: We have thus set out somewhat at length the terms and provisions of the deed because, we think, the reasonable character of the provisions of the deed itself will reflect upon a proper conclusion, in the discussion and determination of the questions, in this case. Id. at 179-80 , 94 A. at 524 . Brown makes clear two significant points: (1) a revocable inter vivos trust with a retained life estate may be a complete and bona fide transfer and, thus, is not necessarily invalid with regard to a surviving spouse; and (2) when rights are reserved, the reasonableness of the terms is an important consideration. “To hold that either a husband or wife has a vested interest in the others’s personalty that the one is unable to divest in his or her lifetime would be disastrous in the extreme to trade and commerce.” Id. at 185 , 94 A. at 526 . 18 ⁴⁹⁴ In Mushaw v. Mushaw, we invalidated trust accounts that we concluded unlawfully frustrated a surviving spouse’s right to an elective share of her deceased husband’s estate; however, we reiterated that the power to revoke a trust, in and of itself, does not make for an improper frustration of that right. 183 Md. at 519 , 39 A.2d at 468-69 .

In Mushaw , the decedent was a trustee and beneficiary of the trust accounts, from which only he could withdraw funds during his lifetime. Id. at 516 , 39 A.2d at 467 . We observed that his right to make withdrawals, while the other beneficiaries could not, was “in legal contemplation no more than a power to revoke the trust.” Id. at 515-16 , 39 A.2d at 467 . We said that this power alone does not prevent a trust from being complete and bona fide as to a surviving spouse; however, it “might properly be considered in connection with other facts” to determine whether a decedent’s use of the trust form unlawfully frustrates the rights of her or his surviving spouse.

Id. at 517 , 39 A.2d at 467 (quoting Sturgis, 152 Md. at 660 , 137 A. at 381 ). In Mushaw , the “salient fact” was the extent to which the decedent’s trust accounts stripped his surviving wife of the personal property that otherwise would have been part of his estate. Id. Accordingly, we invalidated the accounts as to her interest.

Id. at 519 , 39 A.2d at 469 . In Whittington v. Whittington, however, we refused to invalidate trust accounts established and solely controlled by the decedent during his lifetime. 205 Md. 1, 14 , 106 A.2d 72, 78 (1954). Although the trust accounts were joint accounts in name, the decedent made explicit that “he didn’t want [the beneficiaries] to use the money until after his death.” Id. at 7 , 106 A.2d at 75 . Moreover, the decedent kept the passbooks for the accounts in a “lock box,” which remained in “his possession for the remainder of his life.” Id.

In other words, for all intents and purposes, the decedent retained absolute dominion and control over the trust accounts. In upholding the validity of the of the trust accounts, we explained: In Maryland, the completeness of the transfer and the extent of control retained by the transferor, the motive of the transferor, participation by the transferee in the alleged ⁴⁹⁵ fraud and the degree to which the surviving spouse is stripped of his or her interest in the estate of the decedent have all been considered material, and no one test has been adopted to the exclusion of all other tests. Id. at 12 , 106 A.2d at 77 . We held that the use of the trust form was not improper as to the surviving spouse in light of the other provisions that the decedent made for her and the relationship that the decedent enjoyed with his sons, who were the beneficiaries of the trust accounts.

Id. at 14 , 106 A.2d at 78 . In Gianakos v. Magiros, we refused to invalidate a decedent’s inter vivos transfer of restaurant property to his son from a previous marriage. 234 Md. at 31-32 , 197 A.2d at 906 . We emphasized “that retention of control does not in and of itself make the transaction a sham” and concluded that the decedent had “a sound business reason” for retaining a life estate with the power “to lease, mortgage, deed or in any other wise encumber the property absolutely.” Id. at 30-32 , 197 A.2d at 906 . 19 We said unequivocally in Gianakos that Whittington provides “controlling rules.” Id. at 29 , 197 A.2d at 905 . Moreover, in Winters v. Pierson, we refused to invalidate a number of checking and savings accounts that a decedent established for the benefit of his grandchildren and great-grandchildren, even though most of the accounts “were subject to withdrawal only by [the decedent].” 254 Md. at 580-85 , 255 A.2d at 24-27 .

We reiterated that there is no single determinative factor and concluded that the accounts established for the grandchildren and great-grandchildren were “not only understandable but legitimate.” Id. at 585 , 255 A.2d at 27 . ⁴⁹⁶ Kathleen places much stock in her view of Knell, supra, 318 Md. 501 , 569 A.2d 636 ; however, Knell added nothing new to the analytical paradigm. The decedent in Knell was estranged from his wife and living with a woman for whom he justifiably had a great deal of affection. Id. at 502-03 , 569 A.2d at 637 . The decedent’s live-in companion “served as his nurse during his illness, homemaker, cook, and companion,” and she had lived with the decedent for 27 years following his separation from his wife.

Id. To secure for her an interest in his real property, the decedent deeded the property to a strawman, who deeded it back to the decedent as a life estate, with the remainder vested in fee simple in the decedent’s live-in companion. Id. at 503-04 , 569 A.2d at 637 . The straw-man’s deed to the decedent also gave the decedent the absolute power to dispose of the property, including the remainder.

Id. Following this transaction, the decedent and his live-in companion continued to live together on the property as if nothing had changed. Id. In other words, despite the decedent’s noble intentions, the transaction was a sham.

We stated: It may be that “[n]o general and completely satisfactory rule to determine the validity or invalidity of transfers alleged to be in fraud of marital rights has yet been evolved in this State.” Whittington, 205 Md. at 14 , 106 A.2d 72 . See Klosiewski v. Slovan, 247 Md. 82, 88 , 230 A.2d 285 (1967). But here, it is perfectly clear that Mr. Knell retained control of the property during his lifetime by establishing a life estate in himself with unfettered power in him, while living (except by will), to dispose of all interests in the property in fee simple. He did not part with the absolute dominion of the property during his life.

His conveyance, through a straw man, of the remainder of the property was not complete, absolute, and unconditional. The law pronounces this to be a fraud on the marital rights of Mrs. Knell. His reluctance to relinquish control over the disposition of the property during his lifetime defeated his intention. ⁴⁹⁷ Id. at 512, 569 A.2d at 641-42 (alterations in original). Put simply, on these facts, we did not need to articulate a comprehensive rule because the outcome was clear to us.

There are two reasons why we believe that the holding in Knell was limited to its facts and did not establish a new analytical template for determining whether a surviving spouse may set aside a decedent’s inter vivos transfer. First, since the turn of the twentieth century, this Court has upheld transactions in which decedents retained absolute control over their non-probate assets, and, when we have allowed a surviving spouse to invalidate a non-probate disposition of property, we have required her or him to do more than simply demonstrate that the decedent retained lifetime control of the property. See, e.g., Whittington, 205 Md. at 14 , 106 A.2d at 78 ; Mushaw, 183 Md. at 519 , 39 A.2d at 468 ; Brown, 126 Md. at 179-80 , 94 A. at 524 . Thus, for Knell to have announced a new rule, Knell would have had to overrule the old and well-established rule to the contrary.

Nowhere in the Knell opinion did we reject (explicitly or implicitly) the prior precedents of this Court. 20 Second, Knell involved a peculiar and different set of facts than here; we were not dealing there with a revocable inter vivos trust or with trust accounts. In Knell , the decedent structured a two-part transaction, through a strawman, whereby he retained not just absolute control of his real property, but continued possession and use of it as well. Knell, 318 Md. at 512 , 569 A.2d at 641-42 . Indeed, such ⁴⁹⁸ transactions have been disapproved of since at least the mid-nineteenth century, see Hays, 1 Md. Chan, at 341, and that propensity has not encroached on this Court’s general protection of legitimate non-probate arrangements under which decedents may retain total control of their non-probate property until death.

See generally Winters, 254 Md. at 585 , 255 A.2d at 27 ; Brown, 126 Md. at 179-80 , 94 A. at 524 . In Gianakos , we said that “[a]n excursion into the law of other jurisdictions seems neither necessary nor helpful in the solution of the problem before us.” 234 Md. at 29 , 197 A.2d at 905 . Nonetheless, we find the D.C. Court of Appeals’s decision in Windsor v. Leonard, 475 F.2d 932 (D.C.Cir.1973) (per curiam), to be persuasive in its interpretation of Maryland law on the point that a decedent’s retained control over an asset, by itself, does not require a court to invalidate the transfer as to the decedent’s surviving spouse. In Windsor , a surviving husband attempted to invalidate, as an unlawful frustration of his right to take a statutory share of the net estate under D.C.’s equivalent of Section 3-203, an inter vivos trust established by his deceased wife. 475 F.2d at 933 . 21 The court noted that Maryland case law provided the “proper basis” for disposing of the issue before it.

Id. “In enacting the D.C.Code provisions on marital rights, Congress made it clear that courts interpreting those provisions should follow precedents under the similar Maryland statute.” Id. (citing H.R.Rep. No. 679, 87th Cong., 1 st Sess., p. 3, and S.Rep. No. 822, 87th Cong., 1 st Sess., p. 3).

The court echoed what we said in Gianakos — that Whittington “set forth certain ‘controlling rules’ to be applied in determining whether or not an intervivos transfer is an improper circumvention of the marital ⁴⁹⁹ rights of the surviving spouse.” Id. (quoting in part Gianakos, 234 Md. at 29 , 197 A.2d at 905 ). The D.C. appellate court affirmed the decision of the trial court not to invalidate the trust. Id.

In doing so, the court held: In creating the trust, Mrs. Windsor reserved, in addition to the power of revocation, the right to all income during her lifetime, the right to draw from the principal, and the right to amend the terms of the trust. These powers, however, have not been held to render an otherwise valid transfer “incomplete” in cases such as this. There is no evidence to indicate that Mrs. Windsor or the beneficiaries of the trust had any unusual or fraudulent motive for the transaction. Mrs. Windsor created the trust at the age of fifty-four, some 18 months before she died; this is hardly the kind of “brink of death” transfer that might indicate bad faith on the part of the transferor.

Finally, [the surviving spouse] is left with an estate exceeding $100,000 in addition to his personal holdings worth some $140,000. Id.; see also White v. Sargent, 875 A.2d 658, 663 (D.C.2005) (applying Whittington as adopted in Windsor and invalidating an inter vivos trust that the decedent created to conceal his assets from his wife). We also find the opinion of the Supreme Court of Illinois in Johnson v. La Grange State Bank, 73 Ill.2d 342 , 22 Ill.Dec. 709 , 383 N.E.2d 185 (1978), to be illustrative because its conclusion was premised on facts substantially similar to those at issue here and because we believe that Maryland precedents dictate that we interpret the law of this State the way that the Johnson court interpreted the law of Illinois. 22 In Johnson , the decedent learned that she had cancer, and, seven months before she died, she “executed a revocable Inter vivos trust in which she placed in trust substantially all of her assets.” 73 Ill.2d at 350 , 22 Ill.Dec. 709 , 383 N.E.2d at 188 . ⁵⁰⁰ Like Gilles, the decedent in Johnson named herself as trustee, and she retained a life estate in the trust income with the “power to invade the principal of the trust, as she in her discretion saw fit.” Id. Upon the decedent’s death, the successor trustee was to distribute the trust assets among the decedent’s “mother, sister, niece, and certain named charities.” Id. at 351 , 22 Ill.Dec. 709 , 383 N.E.2d at 189 .

When the decedent died, her husband filed suit to invalidate the inter vivos trust as to him because the decedent retained absolute control over it during her lifetime. Id. The court dismissed the notion that a decedent’s retained control of an asset has any overarching significance in this context and concluded: The declaration of trust immediately created an equitable interest in the beneficiaries, although the enjoyment of the interest was postponed until [the decedent’s] death and subject to her power of revocation. This, however, did not make the transfer illusory.

And the power of control that she had as trustee was not an irresponsible power; she was charged with a fiduciary duty in respect to the beneficiaries’ interest, and her management and administration of the assets in trust could only be exercised in accordance with the terms of the trust. Id. at 364 , 22 Ill Dec. 709, 383 N.E.2d at 195 ; see also Farkas v. Williams, 5 Ill.2d 417, 430 , 125 N.E.2d 600, 607 (1955) (noting that “the undeviating trend in cases dealing with the validity of trust declarations is to treat reservations ... as conditions subsequent which may operate to defeat the interest of the beneficiaries, but which, unexercised, do not prevent the vesting of equitable title” (internal quotations omitted)). Based on the facts underlying the trust’s creation and the decedent’s maintenance of the trust during the seven months preceding her death, the Johnson court held that the trust did not circumvent improperly the surviving husband’s statutory right to an elective share of the decedent’s estate. Id. at 364-65 , 22 Ill.Dec. 709 , 383 N.E.2d at 195 .

Specifically, the court relied on the facts that the decedent knew that her husband was independently wealthy, that the decedent’s mother was ⁵⁰¹ financially dependent on the decedent, that the trust terms provided for the successor trustee to take over if the decedent could no longer serve as trustee, and that the decedent did not exercise any of her retained powers or otherwise deplete the trust’s assets. Id. According to the court, “[tjhese facts tend to show that she intended to make a valid and effective transfer at the time her declaration of trust was executed.” Id. at 365 , 22 Ill.Dec. 709 , 383 N.E.2d at 195 . In the present case, Gilles retained the power to revoke the Trust at anytime “by notice in writing.” He named himself as trustee and retained a life-estate in the net income of the Trust.

Gilles also retained the power to invade the principal of the Trust. With respect to the TOD accounts, Gilles retained the power to change the beneficiary of those accounts. 23 It is clear that Gilles retained absolute control over the Trust; however, this Court has not made that characteristic the sole touchstone of an inter vivos transfer that will be invalidated as to a surviving spouse. While retained control is a significant fact to consider, it is not, by itself, a sufficient justification for invalidating an inter vivos trust. Accordingly, we reverse the judgment of the intermedi ⁵⁰² ate appellate court and direct a remand of this case to the trial court for further proceedings not inconsistent with this opinion.

II

Although we conclude that Gilles’s retention of control over the Trust and TOD accounts does not mean necessarily that they are invalid as to Kathleen, we still must consider whether the trial court was clearly erroneous in finding against Kathleen. According to Maryland Rule 8-131(c): When an action has been tried without a jury, the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses. “The deference shown to the trial court’s factual findings under the clearly erroneous standard does not, of course, apply to legal conclusions.” Griffin v. Bierman, 403 Md. 186, 195 , 941 A.2d 475, 480 (2008) (quoting Nesbit v. Gov’t Employees Ins. Co., 382 Md. 65, 72 , 854 A.2d 879, 883 (2004)).

Because we cannot be certain from the trial judge’s explication that he applied properly the law in this case as declared in this opinion, we are not in a position to determine whether the trial court’s factual findings were clearly erroneous. At the conclusion of the evidence, the trial court found that Gilíes had no intention to defraud Kathleen and, therefore, there was no actual or constructive fraud. Intent to defraud, however, is not the appropriate bellwether. For the guidance of the trial court on remand, we shall iterate the applicable principles for determining whether a decedent’s inter vivos transfer should be set aside as an unlawful frustration of a surviving spouse’s statutory right to a share of the decedent’s estate.

In a 1949 Maryland Law Review article, Melvin J. Sykes, Esquire, ably described the problem that we perceive with the trial court’s explication of its extant decision in this case: ⁵⁰³ The problem presented by these cases calls for the discriminating exercise of judicial discretion. While discretion necessarily involves uncertainties, which are perhaps even desirable where considerations of policy are delicately balanced, the confusion in the cases seems unnecessarily increased by a hazy delineation of the precise problem to be solved, by the tendency of the cases to try to fit facts into one precedent or another without fundamental analysis of the ratio decidendi, by the use of question-begging formulas such as “fraud,” and by the citation of cases inconsistent with the proposition for which they are cited. As the law now stands, therefore, the lawyer seeking some measure of practical guidance from the cases is confronted with confusion worse confounded than should be necessary. Sykes, Inter Vivos Transfers in Violation of the Rights of Surviving Spouses, supra, at 19.

This is the problem that we hope to see remedied on remand. We begin by examining the connection between a surviving spouse’s right to a statutory share of the estate and a court’s power to invalidate a decedent’s inter vivos transfer that frustrates that right. Historically, surviving spouses were protected by the estates of dower and curtesy. Angela M. Vallario, Spousal Election: Suggested Equitable Reform, for the Division of Property at Death, 52 Cath.

U.L.Rev. 519, 526 (2003). Dower was the right of a surviving wife to a life estate in one-third of her deceased husband’s real property, which he could not devise by will or transfer during his lifetime without her consent; curtesy was the somewhat reciprocal right of a surviving husband to a life estate in his deceased wife’s real property, provided there were children born of the marriage. Lefteris v. Poole, 234 Md. 34, 38 , 198 A.2d 250, 252 (1964); Fitzpatrick v. Mercantile-Safe Deposit & Trust Co., 220 Md. 534, 554 , 155 A.2d 702, 712 (19519); Jaworski, 149 Md. at 117-18 , 131 A. at 43 ; Vallario, Spousal Election, supra, at 528-30. 24 ⁵⁰⁴ As it was perceived that the nature of wealth began to shift from real to personal property, dower as a protection for widows became increasingly obsolete because husbands remained free to devise their personal property as they chose. Sykes, Inter Vivos Transfers in Violation of the Rights of Surviving Spouses, supra, at 2.

Thus, beginning in the early nineteenth century, states responded by passing elective share statutes to protect widows from being disinherited and left with no reasonable means of financial support. Id. As this Court observed on a prior occasion, Maryland enacted its original elective share statute in 1798. Domain v. Bosley, 242 Md. 1, 7-8 , 217 A.2d 555, 559 (1966).

That statute, the forerunner to Section 3-203, provided, in pertinent part, that a widow who renounces her right to take under her husband’s will “shall be entitled to one third part of the personal estate ..., which shall remain after payments of his just debts, and claims against him, and no more.” Id. (quoting Ch. 101, subch. 13, of the Acts of 1798). 25 We have noted that ⁵⁰⁵ “the public policy which surrounds the marriage relationship ... underlies the elective share statute.” Shimp, 315 Md. at 645 , 556 A.2d at 263 ; see also Vallario, Spousal Election, supra, at 530 (commenting that traditional elective share statutes “reflect a duty of support that arose at the time of the marriage”). Thus, one of the important attributes of dower was that a husband could not transfer the legal title to his real property during his lifetime, unless his wife consented. See Grove v. Frame, 285 Md. 691, 697, 402 A.2d 892, 896 (1979) (noting that “transfer of legal title to real property, without the wife’s consent, did not destroy her right of dower upon her husband’s death”).

This rule did not apply to personal property, effectively leaving a husband free to disinherit his wife by disposing of all (or substantially all) of his personal property through inter vivos transfers. See Rabbitt v. Gaither, 67 Md. 94, 104-05 , 8 A. 744, 748-49 (1887) (noting that a husband’s power during his lifetime freely to dispose of his personal property “has been so long recognized by the courts, and so often exercised, as to have become, not only a well-established principle of law, but a settled rule of property”). To protect the surviving spouse’s right to a statutory share from being effectively stripped by inter vivos transfers, a doctrine evolved whereby Maryland courts of equity could invalidate a sham transaction in which a decedent unlawfully frustrates that right by parting with ownership in form only. E.g., Collins v. Collins, 98 Md. 473, 483-84 , 57 A. 597, 600-01 (1904); Sanborn v. Lang, 41 Md. 107, 118 (1874); Hays, 1 Md. Chan, at 341-42.

Indeed, although we previously referred to this judicial authority as the doctrine of fraud on marital rights, on more than one occasion, we have stated more aptly its purpose: “to ⁵⁰⁶ balance the social and practical undesirability of restricting the free alienation of personal property against the desire to protect the legal share of the spouse.” Knell, 318 Md. at 512 , 569 A.2d at 641 ; Winters, 254 Md. at 583 , 255 A.2d at 26 ; Whittington, 205 Md. at 11 , 106 A.2d at 77 ; Allender, 199 Md. at 550 , 87 A.2d at 611 . Two early cases from the High Court of Chancery continue to provide the guideposts for a court’s exercise of this equitable power in Maryland, Hays v. Henry, 1 Md. Chan. 337 (1851), and Dunnock v. Dunnock, 3 Md. Chan. 140 (1853). In Hays, the decedent was estranged from his wife and used his money to buy land for a woman with whom he had fathered two children and cohabitated for the 20 years preceding his death. 1 Md. Chan, at 337-40. She then conveyed the property to the decedent to hold in trust for her and their children.

Id. at 339-40. 26 The decedent lived on the property for the rest of his life. Id. at 340. When he died, his wife argued that the two-part transaction was a sham designed for him to be the property’s true owner. Id. at 338.

The chancellor stated: [Although the husband is not permitted to deprive his wife of her reasonable share of his personal estate by will, there can be no doubt of his power to dispose absolutely of this description of property during his life, independently of the concurrence, and exonerated from any claim of the wife, provided the transaction is not merely colorable, and unattended with circumstances indicative of fraud on the rights of the wife. If the disposition by the husband be bona fide, and no right is reserved to him, then, though made to defeat ⁵⁰⁷ the claim of the wife, it will be good against her, because ... an act cannot be denounced as fraudulent which the law authorizes to be done. But if it be a mere device or contrivance, by which the husband, not parting with the absolute dominion over the property, seeks, at his death, to deny his widow that share of his personal estate which the law assigns her, then it will be ineffectual against her. One of the badges of fraud in such cases, is the retention of the possession of the property by the husband, after the transfer of the title, or keeping the deed in his hands after its execution.

Id. at 338-39 (italics in original). The chancellor agreed with the wife and concluded that the conveyances “were the result of a contrivance, invented ... to deprive the complainant of that portion of the personal estate of her husband....” Id. at 341. Importantly, the