Ch. 11

1996 LAWS OF MARYLAND

IF A RESIDENT OF THE STATE DIES INTESTATE AND LEAVES AN ESTATE THAT
CONSISTS OF ASSETS, INCLUDING LIFE INSURANCE PROCEEDS, IN A TOTAL AMOUNT
NOT EXCEEDING $1,000, AN INSURER MAY PAY THE LIFE INSURANCE PROCEEDS TO
THE DECEDENT'S SURVIVING SPOUSE, CHILD, OR PARENT, WITHOUT THE GRANT OF
LETTERS OF ADMINISTRATION, IF THE INDIVIDUAL TO WHOM PAYMENT IS TO BE
MADE PROVIDES THE INSURER WITH:

(1)     AN AFFIDAVIT THAT STATES THAT THE ENTIRE ESTATE OF THE
DECEDENT, INCLUDING LIFE INSURANCE PROCEEDS, DOES NOT EXCEED $1,000; OR

(2)     A LETTER OF ADMINISTRATION AS PROVIDED BY THE SMALL
ESTATE LAW, §§ 5-601 THROUGH 5-608 OF THE ESTATES AND TRUSTS ARTICLE.

(B)     PAYMENT TO MINOR.

THE INSURER MAY PAY THE SHARE OF A MINOR TO AN INSTITUTION OR TO A
RELATIVE OF THE MINOR, WITH CUSTODY OF THE MINOR, WITHOUT REQUIRING
THE INSTITUTION OR RELATIVE TO BE APPOINTED THE LEGAL GUARDIAN OF THE
MINOR.

(C)     EFFECT OF PAYMENT.

PAYMENT BY AN INSURER UNDER THIS SECTION, OR UNDER A FACILITY OF
PAYMENT CLAUSE IN A POLICY OF LIFE INSURANCE, DISCHARGES THE INSURER
FROM ALL FURTHER LIABILITY WITH RESPECT TO THE LIFE INSURANCE PROCEEDS.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 382.

In the introductory language of subsection (a) and in subsection (b) of this
section, the former phrase "at its option" is deleted as unnecessary in light of
the word "may".

In the introductory language of subsection (a) of this section, the former
reference to an estate that consists of "property" is deleted as unnecessary in
light of the comprehensive reference to an estate that consists of "assets".

In subsection (a)(2) of this section, the reference to a "letter of
administration" is substituted for the former reference to a "certificate of
administration" for clarity. See ET §§ 5-601 through 5-608 of the Code.

Defined terms: "Insurer" § 1-101
"Life insurance" § 1-101
"Policy" § 1-101

16-111. PROCEEDS EXEMPT FROM CREDITORS.

(A) IN GENERAL.

THE PROCEEDS OF A POLICY OF LIFE INSURANCE OR UNDER AN ANNUITY
CONTRACT ON THE LIFE OF AN INDIVIDUAL MADE FOR THE BENEFIT OF OR
ASSIGNED TO THE SPOUSE, CHILD, OR DEPENDENT RELATIVE OF THE INDIVIDUAL
ARE EXEMPT FROM ALL CLAIMS OF THE CREDITORS OF THE INDIVIDUAL ARISING

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