Resource ID: W-013-1082

Revocable Trusts: Maryland

FRANK CAMPBELL, KIERNAN WATERS, AND MAKAYLA HANINGTON, HOLDEN AND CAMPBELL,
WITH PRACTICAL LAW TRUSTS & ESTATES

Search the Resource ID numbers in blue on Westlaw for more.

A Q&A guide to the laws governing revocable REVOCABLE TRUSTS AS WILL SUBSTITUTES
trusts in Maryland. This Q&A addresses state Use of revocable trusts as a will substitute is common in Maryland,
but wills alone (without the use of a revocable trust) are common
laws and customs that impact revocable as well. Counsel should consider several factors when deciding
trusts, including the key statutes and rules whether to recommend a will or a revocable trust-based estate plan
in Maryland, including the client’s:
related to revocable trusts, the requirements
„„Age: A simple will may be sufficient for younger clients who are not
for creating a valid revocable trust agreement, likely to die or become incapacitated in the near term.
common revocable trust provisions, information „„Wealth: A revocable trust based plan often makes more sense for
a wealthy client than for a client of limited means who is likely to
concerning trustees, information on making have a simple probate.
changes to revocable trust agreements after „„Tolerance for complexity: Funding a revocable trust and continuing
execution, and Maryland’s treatment of certain to fund it with newly acquired assets on an ongoing basis can be
daunting for some clients.
special circumstances for gifts made under a „„Likelihood of becoming incapacitated in the near-term: If funded,
revocable trust agreement and gift recipients. a revocable trust allows a trustee to manage the client’s trust
assets if the client becomes incapacitated. If there is no revocable
trust, a guardianship is likely to be needed.
„„Desire for privacy: Revocable trusts generally afford clients more
KEY STATUTES AND RULES privacy than wills (see Court Supervision and Privacy).
1. What are the key statutes and rules that govern revocable „„Fee tolerance: Revocable trust-based plans typically cost more
trusts in your state and are revocable trusts commonly used as during the planning phase than will-based plans.
will substitutes in your state? „„Probate avoidance: Assets held by a revocable trust may avoid
probate not only in Maryland, but in the other states in which a
The statutes and rules governing revocable trusts in Maryland are client may own property.
found in:
„„The Maryland Trust Act, which became effective on January 1, WHO CAN CREATE A REVOCABLE TRUST
2015, and is adapted from the Uniform Trust Code and Maryland
trust law. It sets out the specific rules governing trusts, trust 2. Is there a minimum age requirement to create a
administration, and fiduciaries. (Md. Code Ann., Est. & Trusts revocable trust?
§§ 14.5-101 to 14.5-1006.)
In Maryland, a person must be eighteen years of age or older to create
„„Subtitle 6 of the Maryland Trust Act which governs the rules specific
a revocable trust (Md. Code Ann., Est. & Trusts §§ 4-101 and 14.5-601).
to revocable trusts (Md. Code Ann., Est. & Trusts §§ 14.5-601 to
14.5-604).
3. What is the standard of mental capacity required to create a
„„Title 15 of the Estates and Trusts law which governs the rules specific revocable trust?
to fiduciaries (Md. Code Ann., Est. & Trusts §§ 15-101 to 15-620).
„„Title 10 of the Maryland Rules, which governs the rules specific to In Maryland, a person must have the capacity to create a will to
guardians of person and property (Md. R. 10-101 to 10-712). create a revocable trust. To create a will or revocable trust, a person

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 Revocable Trusts: Maryland

must be legally competent. (Md. Code Ann., Est. & Trusts §§ 4-101 BENEFICIARY REQUIREMENTS
and 14.5-601(a).) For a trust to be valid in Maryland, there must be a definite
The standard for mental capacity is established through case law beneficiary, unless the trust is:
and is not clearly defined by statute. The testator of a will and the „„A charitable trust.
settlor of a trust have the mental capacity to create a will or trust if „„For the benefit of an animal.
the testator or settlor:
„„A non-charitable trust with a specific intended use, in which case it
„„Understands the nature of the business in which the testator or can exist for no longer than 21 years.
settlor is engaging.
(Md. Code Ann., Est. & Trusts §§ 14.5-402(b) and 14.5-408.)
„„Can recite the property of which the testator or settlor intends to
dispose and who is to receive it. TRUST PROPERTY REQUIREMENTS
„„Knows the relative claims of the persons who were or should be A revocable trust does not need to be funded when it is created
the objects of the testator’s or settlor’s bounty (that is, knows the to be valid in Maryland. The trust can be funded by transfers by
claims of those who would receive the property if the testator or will or other disposition that takes effect on the settlor’s death
settlor did not make the will or trust). (for example, a beneficiary designation). (Md. Code Ann., Est. &
(See Dougherty v. Rubenstein, 172 Md. App. 269, 283-84, 914 A.2d 184, Trusts § 14.5-401.)
192-93 (2007).)
It is routine to fund the trust with a small amount of cash (usually $10)
A revocable trust does not automatically convert to an irrevocable at the time of the execution, and fund it more significantly once the
trust if the settlor no longer has capacity. However, an incapacitated trust has been properly established.
settlor may not create, revoke, or amend a trust instrument. (Md.
Code Ann., Est. & Trusts § 14.5-601(c).) 6. What provisions, if any, must be included for a trust to be
deemed revocable?
4. Can any of the following create a revocable trust on behalf of
an individual: In Maryland, there is a presumption that the trust instrument is
„„Agent under a power of attorney?
revocable unless it expressly states that it is irrevocable (Md. Code
Ann., Est. & Trusts § 14.5-602(a)(1)).
„„Guardian or conservator?
For a trust to be considered revocable, a settlor must be able to
AGENT UNDER A POWER OF ATTORNEY revoke the trust without the consent of the trustee or a person
holding an adverse interest in the trust or trust property (Md. Code
A principal may grant the power to create, amend, or revoke an inter Ann., Est. & Trusts § 14.5-103(u)).
vivos trust to an agent. However, this power must be explicitly stated
in both the trust instrument and the power of attorney. (Md. Code
Ann., Est. & Trusts §§ 17-108(d)(1) and 17-203.) TRUST FORMALITIES AND EXECUTION REQUIREMENTS
7. Must a revocable trust agreement be in writing to be valid?
GUARDIAN OR CONSERVATOR
A guardian of the property of a settlor (or, if none has been appointed, A trust agreement created by an individual does not have to be in
a guardian of the settlor’s person) may exercise the same powers that writing to be valid in Maryland if the creation and terms of the trust
a settlor has to amend or revoke a trust if both: are established by clear and convincing evidence (Md. Code Ann.,
„„The court supervising the guardianship approves. Est. & Trusts § 14.5-406).
„„The trust instrument does not provide otherwise (Md. Code Ann., However, counsel should always create a trust agreement in writing
Est. & Trusts § 14.5-602(f)). because:
However, statute does not authorize a guardian to create a trust for „„The clear and convincing evidence standard is almost impossible
the settlor. to meet.
„„An oral trust may not hold real property or the proceeds from the
TRUST REQUIREMENTS sale of real property (see Juliano v. Juliano, 36 Md. App. 1, 5-12,
372 A.2d 1084, 1086-91 (1977)).
5. What conditions must be met in your state to create a valid
trust? In particular, please specify: 8. What are the execution requirements for a valid written
„„Trustee requirements. revocable trust agreement? In particular, please specify
requirements for:
„„Beneficiary requirements.

„„Trust property requirements. „„The settlor’s signature.

„„The trustee’s signature.

TRUSTEE REQUIREMENTS „„Witnesses to the agreement.

For a trust to be valid in Maryland, a trustee must have duties to „„Notarization.

perform (Md. Code Ann., Est. & Trusts § 14.5-402(a)(4)).

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 Revocable Trusts: Maryland

In Maryland, there are no execution requirements for a valid written and the witnesses’ signatures of the trust agreement to express
revocable trust instrument. However, it is standard practice to execute that the settlor:
a trust instrument in compliance with the execution requirements of a „„Intentionally created the trust.
will (Md. Code Ann., Est. & Trusts § 4-102). A will in Maryland is valid
„„Had the mental capacity to create the trust.
if the will is:
„„In writing. It is also common practice to notarize the trustee’s signature of the
trust agreement to express that the trustee:
„„Signed by the testator, or some other person for the testator’s, in
the testator’s presence and by the testator’s express direction. „„Accepts the trust property.

„„Attested and signed by two or more credible witnesses in the „„Agreesto administer the trust property as written in the trust
presence of the testator. agreement.
(Md. Code Ann., Est. & Trusts § 4-102.) The settlor will sign the agreement as settlor and initial trustee (as is
usually the case), and usually have the settlor’s signature notarized.
If a trust holds real property, the trust (and any amendments to
that trust), must be in writing and signed by the party who by law
can create the trust or else the trust is void (Md. Code Ann., Real RELATIONSHIP TO POUR-OVER WILL
Prop. § 5-105).
9. How is a revocable trust agreement used in conjunction with
a pour-over will in your state? In particular please specify:
SETTLOR’S SIGNATURE
„„Whether the revocable trust must exist before the pour-over will
The settlor’s signature is required on a written revocable trust
can be signed.
agreement if the settlor wants to comply with the execution
requirements of a will. If the settlor does not sign the trust „„Whether the terms of the revocable trust agreement can be
instrument, another person must sign it on the settlor’s behalf, incorporated by reference into the pour-over will.
in the settlor’s presence, and by the settlor’s express direction
to be in compliance with the rules regarding will execution. In Maryland, a pour-over will is used to transfer a settlor’s property
(Md. Code Ann., Est. & Trusts § 4-102(2) and see Vito v. Grueff, to a revocable trust that may not have been transferred during the
453 Md. 88, 106, 160 A.3d 592, 602-03 (2017).) settlor’s lifetime. This ensures that, even if the property must be
probated, the property becomes trust property to be administered
A Maryland trust should be executed in compliance with the and distributed under the terms of the revocable trust instrument.
requirements of a will to strengthen the argument of capacity. (Md. Code Ann., Est. & Trusts §§ 4-402 and 4-411.)
Two witnesses, and even a notary, as well, may provide some
support against those who may challenge or contest the validity EXISTENCE OF REVOCABLE TRUST BEFORE EXECUTION OF WILL
of a trust document.
In Maryland, for a settlor’s property to be transferred to the settlor’s
revocable trust at the settlor’s death, the trust instrument must be
TRUSTEE’S SIGNATURE
created before or contemporaneously with the will and must be
The trustee is not required to sign a valid written revocable identified in the will (Md. Code Ann., Est. & Trusts § 4-411).
trust instrument. However, a trust is not created until property
is transferred to another as trustee during the settlor’s lifetime INCORPORATION BY REFERENCE
or by some disposition taking effect on the settlor’s death. For A Maryland will may incorporate by reference the terms of any writing
a successful transfer, the trustee must accept the trust property which is in existence when the will is executed by reference to the
and agree to administer it as written in the trust instrument. writing if the intention to incorporate the terms is clearly written into
(Md. Code Ann., Est. & Trusts § 14.5-401 and see Owings v. Owings, the will (Md. Code Ann., Est. & Trusts § 4-107).
233 Md. 357, 364, 196 A.2d 908, 912 (1964).) Therefore, it is
common practice to have the trustee sign the trust instrument to Often, when a pour-over will distributes the settlor’s assets to the
indicate this acceptance. settlor’s revocable trust, the will also includes contingency provisions
to distribute the settlor’s assets as stated in the trust, in case the trust
WITNESS REQUIREMENTS or any of its provisions fail or are not operative at the settlor’s death.
If the settlor intends to follow the common practice of complying If the trust (and any amendments) is executed before the will, and
with the rules for will execution when creating a revocable trust, the the will expressly identifies the trust (and any existing amendments),
revocable trust instrument must be signed in the presence of the the will can dispose of the settlor’s property under the trust and
settlor and attested by two or more credible witnesses (Md. Code amendment terms.
Ann., Est. & Trusts § 4-102(3)). A credible witness is a person who Incorporation by reference is a separate doctrine from the one in
is competent to testify under the penalties of perjury, and should Md. Code Ann., Est. & Trusts Section 4-411, which is similar, but
be notified of the settlor’s competency at the time of execution is limited to allowing wills to distribute the settlor’s assets to the
(see Estep v. Morris, 38 Md. 417, 423-4 (Md. 1873)). settlor’s revocable trust. Section 4-411 of the Maryland Code is
only applicable if the settlor’s trust is in existence and valid when
NOTARY REQUIREMENTS the settlor dies, whereas the incorporation by reference doctrine in
A trust instrument is not required to be notarized in Maryland. Md. Code Ann., Est. & Trusts Section 4-107 applies if the revocable
However, it is common practice to notarize the settlor’s signature trust is not in existence or is not valid when the settlor dies.
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 Revocable Trusts: Maryland

RIGHTS OF SURVIVING SPOUSE revoked by either spouse acting alone, but may be amended only by
both spouses acting jointly (to the extent of the community property).
10. How are the elective share rights affected by funding a (Md. Code Ann., Est. & Trusts § 14.5-602(b)(1).) This preserves the
revocable trust? community character of the property that is transferred to the trust.

In Maryland, a spouse is entitled to either the spouse’s bequests Unless the trust provides otherwise, the portions of a revocable trust
under the decedent’s will or a share of the deceased spouse’s holding the balance of the property which is not community property
net probate estate under statute, known as the elective share. may be revoked or amended by each settlor acting alone regarding
The net estate is the deceased spouse’s property that passes by the portion of the trust property attributable to that settlor’s
testate succession reduced by: contribution (Md. Code Ann., Est. & Trusts § 14.5-602(b)(2)).
„„Funeral and administration expenses.
TENANTS BY THE ENTIRETY
„„Family allowances.
In Maryland, when property held by married couples as tenants by
„„Enforceable claims and debts against the estate.
the entirety is transferred to a revocable trust, the property loses its
The amount the spouse may claim is also dependent on whether the characterization as a tenancy by the entirety. However, the property
deceased spouse had surviving children at the time of the deceased (or proceeds from the sale of the property) retains immunity against
spouse’s death. To claim the elective share, the surviving spouse the claims of separate creditors of each spouse if:
must make the proper election and file it in the probate estate „„The husband and wife remain married.
proceeding. (Md. Code Ann., Est. & Trusts § 3-203.) „„The property or proceeds continue to be held in trust.

Because revocable trust property passes outside of probate, it is „„The husband and wife are both beneficiaries of the trust.
not subject to the spousal election. Maryland does not include in „„The trust instrument, deed, or conveyance specifically provides
the elective share any non-probate assets over which the deceased that this Section 511(b) of the Maryland Trust Act applies to the
spouse had control during the deceased spouse’s lifetime, such as: property or proceeds.
„„Jointly owned properties or accounts (with survivorship rights). (Md. Code Ann., Est. & Trusts § 14.5-511(b), (g).)
„„Property with payable on death or transferable on death
designations. COMMON REVOCABLE TRUST PROVISIONS
„„Property held in a revocable trust.
12. Discuss specific provisions commonly found in a revocable
(Md. Code Ann., Est. & Trusts § 3-203.)
trust agreement and the rules that apply to these provisions in
However, Maryland will invalidate a trust that unlawfully frustrates your state. In particular, please discuss the following provisions
a spouse’s elective share right and the trust assets would become and their effect:
part of the deceased spouse’s estate and the elective share in this „„No-contest clause.
circumstance. To create a valid revocable trust, the settlor must have
„„Incorporation by reference of trustee powers.
reasons for creating the revocable trust other than to eliminate a
spouse’s right to an elective a share of the settlor’s estate. (Karsenty v. „„Virtual representation.
Schoukroun, 959 A.2d 1147 (Md. 2008).) „„Rule against perpetuities.

Especially in these circumstances, counsel should consider including „„Sample rule against perpetuities clause.

a clear statement of the settlor’s intent for creating the trust in the „„Governing law.
trust instrument to provide clarity to any potential beneficiaries. „„Transfer of assets to trust by schedule.
That statement should explain the reasons that the settlor created
the trust. Potential reasons for creating a revocable trust include
probate avoidance, additional privacy, and ease of transition and NO-CONTEST CLAUSE
administration of the settlor’s assets when the settlor becomes There are no statutes or cases that address the enforceability
incapacitated or dies. of no-contest clauses in revocable trusts in Maryland. However,
a no-contest clause in a will is void if probable cause exists for
11. Does the transfer of property to a revocable trust change the instituting proceedings (Md. Code Ann., Est. & Trusts § 4-413).
characterization of ownership between spouses? Specifically, These rules likely apply to gifts made by Maryland trusts, as
please discuss: well, since trusts are generally considered will substitutes
„„Community property. (Vito, 160 A.3d at 602-03).
„„Property owned as tenants by the entirety. A no-contest clause that is included in a revocable trust may
deter a beneficiary from challenging the trust instrument without
COMMUNITY PROPERTY probable cause if the beneficiary receives a substantial bequest
under the trust. The bequest would be lost if the beneficiary
Maryland is not a community property state. However, trusts created
challenges the trust without probably cause. This may minimize
in Maryland may include property from community property states.
meritless litigation.
If a revocable trust contains community property, the trust may be

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 Revocable Trusts: Maryland

A contestant must bring any challenge to the validity of a trust not later than 21 years after some life in being at the creation of the
revocable at the settlor’s death within the earliest of: interest (Md. Code Ann., Est. & Trusts § 11-103 and Dorado Ltd. P’ship v.
„„One year after the settlor’s death. Broadneck Dev. Corp., 562 A.2d 757, 759 (Md.1989)).
„„Six months after the trustee sends the person a copy of the trust However, a revocable trust instrument may state that the rule against
and notice informing the person of the trust’s existence, the name perpetuities does not apply. If the trust instrument states that the
and address of the trustee, and the time allowed for commending rule against perpetuities does not apply and the trust provisions
a proceeding. allow for the trustee to sell, lease, or mortgage property any time
(Md. Code Ann., Est. & Trusts § 14.5-605.) beyond the rule against perpetuities vesting period, a trust interest
is not required to meet the standard of the common-law rule against
INCORPORATION BY REFERENCE OF TRUSTEE POWERS perpetuities. (Md. Code Ann., Est. & Trusts § 11-102(b)(5).)
Trust documents in Maryland generally grant trustees all the powers
and authorities listed in the Maryland Trust Act, subject to the RULE AGAINST PERPETUITIES SAMPLE CLAUSE
provisions of the trust instrument that conflict with those powers “Pursuant to Section 11-102(b)(5) of the Estates and Trusts
(Md. Code Ann., Est. & Trusts § 14.5-105). Trust instruments generally Article of the Annotated Code of Maryland, the Rule Against
also explicitly state the specific powers conferred to fiduciaries under Perpetuities does not apply to this instrument or to any trust
Maryland law (Md. Code Ann., Est. & Trusts § 15-102(b)(1)). created under this instrument. The Trustee is hereby granted,
and shall at all times have, the power to sell, lease, or mortgage
VIRTUAL REPRESENTATION property for any period of time beyond the period that is required
Maryland recognizes the concept of virtual representation by which for an interest created under this instrument to vest, so as to be
a holder of an interest in a trust can be represented and bound by good under the Rule Against Perpetuities. If, notwithstanding
another (called a “representative”) regarding a specific question the Settlor’s intent as expressly stated above, the Rule Against
or dispute. The holder is bound by the action of the representative Perpetuities is nonetheless applicable to this instrument or to a
in the following circumstances, if there is no conflict of interest trust created under this instrument, the following provisions shall
between the holder and representative: apply to the extent and with regard to any such trust to which the
Rule Against Perpetuities is so applicable:
„„A guardian of the property may represent and bind a minor or
disabled person. Unless sooner terminated by the express provisions of this
„„If no guardian of the property has been appointed, a guardian of instrument, each trust created in this instrument shall terminate
the person may represent and bind a minor or disabled person. twenty-one (21) years after the death of the last survivor of
„„An agent with specific authority to act for trust matters may
the Settlor’s descendants who are living at the time of the
represent and bind the principal. Settlor’s death. At that time, the property held in trust shall be
discharged of any further trust, and shall immediately vest in
„„A trustee of a trust that is the beneficiary of another trust may
and be distributed to those persons, equally, (if more than one)
represent and bind the beneficiaries of the beneficiary trust. entitled to receive or have the benefit of the income from the
„„A personal representative of the estate of a decedent who is also respective trust.
a beneficiary of a trust may represent and bind interested persons
in the estate. For purposes of distributions under this Section only, it shall
be presumed that any person then entitled to receive any
„„If no guardian of the property or person of a minor, incapacitated,
discretionary payments of the income of a separate trust is
unborn, or unknown child has been appointed, the child’s parent
entitled to receive all of the income, and it shall be presumed
or guardian may represent and bind the child.
that any class of persons entitled to receive discretionary
„„If a minor, incapacitated, unborn, or unknown individual whose payments of income is entitled to receive all of such income.”
location is unknown and not reasonably ascertainable cannot
otherwise be represented, that individual’s grandparent or more GOVERNING LAW
remote ancestor may represent and bind the individual.
The meaning and effect of the trust’s terms are determined by either:
„„A representative with a substantially identical interest with
„„The law of the jurisdiction designated in the trust unless the
respect to the specific question or dispute may represent a minor,
designation of that jurisdiction’s law is contrary to a strong public
an incapacitated or unborn individual, or an individual whose
policy of the jurisdiction having the most significant relationship to
identity or location is unknown and not reasonably ascertainable,
the matter at issue.
regarding that specific question or dispute.
„„Without a controlling designation in the trust, the law of the
„„The holder of a qualified power of appointment may represent and
jurisdiction having the most significant relationship to the
bind a person whose interests are subject to this power.
matter at issue.
(Md. Code Ann., Est. & Trusts §§ 14.5-302 to 14.5-304.)
(Md. Code Ann., Est. & Trusts § 14.5-107.)
RULE AGAINST PERPETUITIES In Maryland, a governing law provision generally establishes each
Generally, Maryland follows the common law rule against perpetuities, trust under the trust agreement as a Maryland trust. But, a governing
which states that no interest is good unless it must vest, if at all, law provision may also provide the trustee with the power to change

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 Revocable Trusts: Maryland

the law governing the administration of any of the trusts after the TRUSTEE APPOINTMENT
settlor’s death, to change the situs of administration of the trust, or to
allow removal of trust property from one jurisdiction to another. These 13. What are the rules regarding appointment of trustees in
actions may require additional trustee action, such as appointing an your state? In particular, please discuss:
independent trustee or filing an instrument with the trust records that „„Criteria for qualifying as a trustee.
the governing law is changing. „„Priority rules for appointment of a successor trustee if the

Unless otherwise provided in the trust, Maryland law generally applies named trustees fail to qualify or stop acting.
to a trust if:
„„The trust instrument was executed in Maryland. QUALIFICATION AS TRUSTEE
„„The settlor was domiciled in Maryland. There are no statutory requirements for an individual to qualify as
„„The trustee was domiciled in Maryland.
a trustee in Maryland. Under Maryland law, a trustee may be any of
the following:
„„Any trust property was in Maryland at the time of creation.
„„An individual.
(Md. Code Ann., Est. & Trusts §§ 14.5-403 and 14.5-404(a).) For „„A trust company.
clarity, Maryland trusts usually specify that Maryland law is the
„„A tax-exempt organization.
governing law of the trust.
„„A bank, trust company, or savings bank that is either:
TRANSFER OF ASSETS TO TRUST BY SCHEDULE zz organized under the laws of another state and authorized to act
A revocable trust does not need to be funded when it is created as trustee in the state where the principal place of business is
to be valid in Maryland. The trust can be funded by transfers by located; or
will or other disposition that takes effect on the settlor’s death zz organized under the laws of the United States and authorized to
(for example, a beneficiary designation). (Md. Code Ann., Est. & act as trustee under federal laws.
Trusts §14.5-401.)
(Md. Code Ann., Est. & Trusts §14.5-710.) However, a court can
A trust instrument generally states that the settlor transfers, remove a trustee under certain conditions (see Question 18).
conveys, and assigns to the trustee the trust property described in
an attached “Schedule A.” It is routine to fund the trust with a small APPOINTMENT OF SUCCESSOR TRUSTEE
amount of cash (usually $10), and list this asset on the Schedule A, at In Maryland, if there is a vacancy in the office of trustee and there is
the time of the execution. Trust funding is an ongoing process, and as no co-trustee remaining in office, the vacancy is filled in the order
the trust acquires more property, the settlor may add each asset to indicated:
Schedule A after the trust has been properly established, but this is
„„By a person designated under the trust to act as successor trustee.
not required.
„„By a person appointed by unanimous agreement of the qualified
It may be beneficial to keep Schedule A updated to inform the beneficiaries.
successor trustees of the assets that have been funded to the trust
„„By a person appointed by the court.
to make administration more efficient. Depending on how the initial
trust has been drafted, Schedule A may need to be signed by the (Md. Code Ann., Est. & Trusts §14.5-704.)
trustee to show acceptance of the trust assets, however, the trust ”Qualified beneficiaries” of a trust at any given time are:
itself may not need to be amended when assets are transferred to
„„The current or permissible recipients of trust income or principal
or from the trust.
at that time.
To make this process simpler, counsel should consider not requiring „„Those who would be current or permissible recipients of trust income
Schedule A to be signed, witnessed, or notarized each time it is or principal if the interests of the current permissible recipients
changed. Typically, the settlor will not update the Schedule A as terminated without causing the trust to terminate at that time.
assets are transferred into and out of the trust. Listing specific
„„Those who would be current or permissible recipients of trust
assets on Schedule A rather than a nominal amount can be
income or principal if the trust terminated according to its terms
problematic if the schedule is not constantly updated as assets
at that time.
are sold or acquired. Disputes may arise later about what assets
are held by the trust. (Md. Code Ann., Est. & Trusts § 14.5-103(t).)

Also, the settlor must understand that if titled or registered property The court also may appoint a successor trustee or special fiduciary
is to be transferred to the trust, creating a list of this property as being (who may be a third party or uninterested temporary trustee) whether
titled in the trust is not sufficient to fund these assets to the trust. The or not there is a vacancy, as is necessary for the administration of the
settlor must actually transfer title of these assets to the trust. trust (Md. Code Ann., Est. & Trusts §14.5-704(d)).

Counsel and the settlor should have a clear understanding of the 14. Please describe how a nominated trustee accepts
settlor’s trust and non-trust assets when the settlor seeks an estate the trusteeship.
plan review.

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 Revocable Trusts: Maryland

In Maryland, a nominated trustee can accept the trusteeship by Absent a provision in the trust agreement or another agreement
complying with the method of acceptance as written in the terms regarding compensation, Maryland law provides a statutory
of the trust. If the trust instrument does not provide a method for fee schedule:
accepting the trusteeship, or if it does not provide that the acceptance „„Income commissions (paid from and chargeable against income) are:
method indicated in the trust instrument is exclusive, the trustee can zz 6% on all income from real estate, ground rents, and mortgages
accept the trusteeship by: collected in each year;
„„Accepting delivery of the trust property. zz 6.5% on the first $10,000 of all other income collected in
„„Exercising the duties of a trustee. each year;
„„Otherwise indicating acceptance of the trusteeship. zz 5% on the next $10,000;
(Md. Code Ann., Est. & Trusts § 14.5-701(a).) zz 4% on the next $10,000; and
Without accepting the trusteeship, a nominated trustee may:
zz 3% on any remainder.
„„Act to protect and preserve trust property, if the person notifies
(Md. Code Ann., Est. & Trusts § 14.5-708(b)(1).)
the settlor, or if the settlor cannot be notified, the qualified „„Principal commissions, payable at the end of each year on the
beneficiary, of the nominated trustee’s rejection of the trusteeship fair value of the principal held in the trust at the end of each year
within a reasonable time after acting. (paid from and chargeable out of principal) are:
„„Inspect or investigate trust property to determine potential liability
zz 0.4% on the first $250,000;
under environmental law or other law or for any other purpose. zz 0.25% on the next $250,000;
(Md. Code Ann., Est. & Trusts § 14.5-701(c).) zz 0.15% on the next $500,000; and

Generally, a nominated trustee should accept a trusteeship in writing

zz 0.1% on any excess of value.
to make the trustee’s intention to accept clear. (Md. Code Ann., Est. & Trusts § 14.5-708(c)(1).)
A trustee who is a financial institution or a member of the Maryland
15. Please describe how a nominated trustee declines the
Bar may charge a commission higher than these statutory income
trusteeship.
and principal commission rates. To do so, the trustee must file a
schedule of fees with the appropriate agency and give notice to
In Maryland, a nominated trustee may decline a trusteeship by: qualified beneficiaries. (Md. Code Ann., Est. & Trusts § 14.5-708(a)(2).)
„„Before accepting any trust property, notifying in writing the person For more information on qualified beneficiaries, see Appointment of
who designated the trustee or that person’s legal representative of Successor Trustee.
the nominated trustee’s declination (Md. Code Ann., Est. & Trusts
§14-403(f)(2)). A Maryland trustee may also be reimbursed out of the trust property:
„„For proper expenses incurred within the scope of trust administration.
„„Not accepting any trust property within a reasonable time
(Md. Code Ann., Est. & Trusts §14.5-701). „„When necessary to prevent unjust enrichment of the trust, such as
for other expenses incurred by the trustee that are not within the
Generally, if the nominated trustee does not want to accept the scope of trust administration.
trusteeship, the nominated trustee should decline a trusteeship in (Md. Code Ann., Est. & Trusts § 14.5-709(a).)
writing to make that intention clear.

MULTIPLE TRUSTEES
TRUSTEE COMPENSATION
17. Who has authority to act when there are multiple trustees?
16. What are the rules, if any, regarding trustee compensation
in your state? Maryland law requires co-trustees of a trust to act unanimously
unless the trust agreement provides otherwise (Donovan v. Miller,
Trustees in Maryland whose duties include the collection and 137 Md. 555, 555, 112 A. 926, 927 (1921)).
distribution of income from trust property are entitled
to commissions. A trust agreement or any other valid agreement The trust agreement can eliminate the requirement of unanimity of
may provide for the amount and source of payment of commissions. trustee action (Md. Code. Ann., Est. & Trusts §§ 14.5-105 and 14.5-106).
(Md. Code Ann., Est. & Trusts § 14.5-708(a)(1).) If a valid agreement If a co-trustee cannot perform the co-trustee’s duties due to illness,
exists, a court that has jurisdiction over the trust may: absence, disqualification, or other temporary incapacity, the
„„Increase or decrease commissions for cause. remaining trustee or trustees may act for the trust (Md. Code Ann.,
„„Provide for compensation for special or unusual services.
Est. & Trusts § 14.5-703(c)). A trustee may delegate functions to a
co-trustee when prudent under the circumstances (Md. Code Ann.,
(Md. Code Ann., Est. & Trusts §14.5-708(a)(1).) The settlor of the trust Est. & Trusts §14.5-703(d)). However, a settlor can prohibit delegation
cannot prohibit the court from revising a trustee’s commission (Md. of functions by specific provisions in the trust agreement (Md. Code
Code Ann., Est. & Trusts § 14.5-105(8)). Ann., Est. & Trusts § 14.5-105).

© 2019 Thomson Reuters. All rights reserved. 7

 Revocable Trusts: Maryland

REMOVAL AND RESIGNATION OF TRUSTEES approval for a trustee to resign (Md. Code Ann., Est. & Trusts
§14.5-705(a)). Unless a co-trustee continues to serve or a court orders
18. Can a trustee be removed from office, and if so, how? otherwise, the resigning trustee is required to act until either:
„„A successor trustee takes control of the trust property.
The settlor of a revocable trust may remove a trustee at any time
if the settlor has capacity to do so. The trust agreement should „„The trust property is delivered to the person entitled to it.

also provide for the removal of a trustee and include provisions for (Md. Code Ann., Est. & Trusts § 14.5-707(a).)
who may do so, the method of removal, and who may replace the
removed trustee. TRUSTEE LIABILITY
In addition to the trust’s provisions for removal of a trustee, in 20. What is the standard of care applicable to the trustee?
Maryland a court must remove a trustee if the trustee has:
„„Willfully misrepresented material facts leading to the trustee’s A person or company that is acting as a trustee is considered a
appointment or to other action by the court regarding the fiduciary and is bound by the rules and regulations of that role
fiduciary estate. (Md. Code Ann., Est. & Trusts §15-101(g)).
„„Willfully disregarded an order of court.
The trustee has extensive duties under the Maryland Trust Act
„„Shown the trustee incapable, with or without fault to properly (Md. Code Ann., Est. & Trusts §§ 14.5-801 to 14.5-817). Among
perform the duties of the trustee’s office. these duties, the trustee must administer the trust:
„„Breached the trustee’s duty of good faith or loyalty in the „„Reasonably under the circumstances, under the terms and
management of property of the fiduciary estate. purposes of the trust and in the interest of the beneficiaries (Md.
(Md. Code Ann., Est. & Trusts § 15-112(a)(1).) Code Ann., Est. & Trusts § 14.5-801).
„„Solely in advancement of the interests of the beneficiaries, not the
A court may remove a trustee on its own initiative, or on the petition
of the settlor, a co-trustee, or a beneficiary of the trust if: trustee’s own interests (Md. Code Ann., Est. & Trusts § 14.5-802).
„„Impartially,
as between beneficiaries’ respective interests
„„The trustee negligently failed to file a bond within the time
required by rule or order of court (Md. Code Ann., Est. & Trusts (Md. Code Ann., Est. & Trusts § 14.5-803).
§ 15-112(a)(2)(i)). „„Prudently, exercising reasonable care, skill, and caution considering

„„The trustee negligently failed to obey an order of court (Md. Code

the purpose, terms, requirements and other circumstances of the
Ann., Est. & Trusts § 15-112(a)(2)(ii)). trust (Md. Code Ann., Est. & Trusts § 14.5-804).
„„The trustee failed to perform any of the trustee’s duties as The settlor cannot draft around the trustee’s duty to act reasonably,
fiduciary, or to competently administer the estate (Md. Code Ann., under the terms and purpose of the trust, and in the interest of the
Est. & Trusts § 15-112(a)(2)(iii)). beneficiaries (Md. Code Ann., Est. & Trusts § 14.5-105).
„„The trustee engaged in a serious breach of trust (Md. Code Ann.,
Maryland has also enacted the Prudent Investor Rule, which allows
Est. & Trusts § 14.5-706(2)(i)). a fiduciary to take advantage of the Modern Portfolio Theory when
„„There is a lack of cooperation among co-trustees that substantially investing trust assets. This rule only applies to:
impairs the trust administration (Md. Code Ann., Est. & Trusts „„Trust companies.
§ 14.5-706(2)(ii)).
„„Investment advisors.
„„The trustee is unfit, unwilling, or persistently failing to administer
„„Individual fiduciaries that have made the election to be governed
the trust effectively and the court determines that removal is in the
best interests of the beneficiaries (Md. Code Ann., Est. & Trusts by this statutory standard.
§ 14.5-706(2)(iii)). (Md. Code Ann., Est. & Trusts § 15-114(g).)
„„A substantial change of circumstances occurred and all the Any other fiduciary is governed by the common law Prudent Man
qualified beneficiaries request removal, and the court finds that: Rule, which requires a fiduciary to invest trust assets as a prudent
zz removal is in the beneficiaries’ best interests; man would invest the man’s own property. Under the Prudent Man
zz removal is not inconsistent with a material purpose of the Rule, a fiduciary may be held liable for a loss resulting from a single
trust; and bad investment, regardless of how the whole portfolio performed.
(Bd. of Trs. of Employees’ Ret. Sys. of Balt. City v. Mayor and City
zz another suitable trustee is available to serve.
Council, 317 Md. 72, 102-03, 562 A.2d 720, 734-35 (1989).)
(Md. Code Ann., Est. & Trusts § 14.5-706(2)(iv).) For a definition of
A trustee is generally not liable for the loss, depreciation, or lack
qualified beneficiaries, see Appointment of Successor Trustee.
of profitability of trust property without a breach of trust or breach
19. What rights does a trustee have to resign from office? of the applicable standard of care (Md. Code Ann., Est. & Trusts
§ 14.5-903).
The trust agreement should include provisions for a trustee to resign 21. Under what circumstances is a successor trustee liable for
and for a successor trustee to be appointed. If the trust agreement the acts of a prior trustee?
does not include resignation provisions, Maryland requires court

8 © 2019 Thomson Reuters. All rights reserved.

 Revocable Trusts: Maryland

Under Maryland law, a successor trustee is generally not liable for If a trustee drafted an exculpatory provision or caused an exculpatory
the acts or omissions of the prior trustee (Md. Code Ann., Est. & provision to be drafted, that provision is invalid unless the trustee proves
Trusts § 14.5-812). However, a trustee is liable to a beneficiary if that the provision is fair under the circumstances and that its existence
the trustee: and contents were adequately communicated to the settlor. Generally,
„„Knows or should know of a situation constituting a breach of trust if the settlor retained independent counsel, then the exculpatory
committed by a former trustee and the trustee improperly permits provision is not considered to have been drafted or caused to be drafted
it to continue. by the trustee. (Md. Code Ann., Est. & Trusts § 14.5-906(b).) A settlor
may not draft around the limitations on exculpatory provisions, those
„„Neglects to take reasonable steps to compel a former trustee or
limitations apply regardless of what is included in the trust instrument
other person to deliver trust property to the trustee.
(Md. Code Ann., Est. & Trusts § 14.5-105(12)).
„„Neglects to take reasonable steps to redress a breach of trust
committed by a former trustee. The beneficiaries of a trust can consent, release, or ratify the conduct
(Md. Code Ann., Est. & Trusts § 14.5-812(b).) of a trustee and therefore relieve a trustee of liability. The trustee
is not liable then unless the trustee acted improperly to induce the
The acts or omissions of a resigning trustee are not discharged by the consent, release, or ratification or if the beneficiary was unaware of
trustee’s resignation (Md. Code Ann., Est. & Trusts § 14.5-705(c)). the beneficiary’s rights or the material facts relating to the trustee’s
breach. (Md. Code Ann., Est. & Trusts § 14.5-907.) It is common
22. Under what circumstances is a trustee liable for the acts of practice for trustees in Maryland to obtain beneficiary consent,
a co-trustee? release, or ratification for their actions.

A trustee in Maryland may be found liable for the acts of a co-trustee Also, in Maryland, a trustee will not be liable if the beneficiary
in certain circumstances: consented to, released, or ratified the conduct that resulted in a
breach of trust. However, a trustee will be held liable for the breach of
„„A trustee may be liable for the acts of a co-trustee when one
trust, despite the beneficiary’s consent, release, or ratification if either:
trustee delegated important duties to another who then wastes
„„The beneficiary’s action was induced by a trustee’s improper
the trust funds. The delegating trustee is liable to the injured
parties along with the trustee to whom the duty was delegated. conduct.
(Caldwell v. Graham, 115 Md. 122, 128, 80 A. 839, 841 (Md. 1911).) „„The beneficiary did not know of the beneficiary’s rights at that time.

„„Because all co-trustees must participate in the performance „„The beneficiary was unaware of the material facts relating to the
of trustee duties under Section 14.5-703(b) of the Maryland breach at that time.
Trust Act, a trustee who remains inactive is guilty of a breach of (Md. Code Ann., Est. & Trusts § 14.5-907.)
trust committed by the acting trustees (Jacob v. Davis, 128 Md.
App. 433, 460-61 738 A.2d 904, 918 (Md. App. 1999)). Because the trust terms prevail except in certain circumstances, the
trust can generally be drafted to afford a trustee or co-trustee greater
If two or more trustees committed a breach of trust and are liable protection from liability (Md. Code Ann., Est. & Trusts § 14.5-105). For
to the beneficiaries, all liable trustees must contribute to restore example, the trust terms may allow for a trustee to dissent or abstain
the value of the trust property or return the profit made by the from a decision of the majority and then be absolved of personal
breach, whichever greater (Md. Code Ann., Est. & Trusts §14.5-902). liability by documenting the dissent or abstention in trust records.
However, a trustee who received a benefit from the breach is not However, the trust cannot change the duty of the trustee to act
entitled to contribution from another trustee who did not so benefit, reasonably under the circumstances, given the trust purposes, terms,
to the extent of the benefit received (Md. Code Ann., Est. & Trusts and beneficiaries’ interests (Md. Code Ann., Est. & Trusts § 14.5-105(2)).
§ 14.5-902(b)(2)).
The trust may also waive trustee liability in certain circumstances SPECIAL CIRCUMSTANCES REGARDING
(Md. Code Ann., Est. & Trusts § 14.5-906 and see Question 23). GIFTS OR RECIPIENTS
24.Please describe what happens if:
23. To what extent can the trust agreement waive trustee
liability? „„A beneficiary does not survive the settlor.

„„A gift is not owned by the settlor or the revocable trust at the
Under the Maryland Trust Act, an exculpatory provision relieving the settlor’s death.
trustee of liability for acts performed while administering the trust is „„There are not enough assets passing through the revocable
unenforceable if it: trust agreement, or after payment of taxes and debts, to
„„Relieves a trustee of liability for a breach of trust that was satisfy all the gifts.
committed in bad faith or with reckless indifference to the „„The gifted property is encumbered.
purposes of the trust or the interests of the beneficiaries
„„The settlor and a beneficiary or fiduciary to whom the settlor
„„Was included as the result of an act of abuse by the trustee who
was married when the revocable trust was created are no
has a fiduciary or confidential relationship to the settlor. longer married when the settlor dies.
„„Is unreasonable under the circumstances.
„„The settlor and a beneficiary die at the same time.
(Md. Code Ann., Est. & Trusts § 14.5-906(a).)

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 Revocable Trusts: Maryland

The rules regarding priority of dispositions, abatement, ademption, „„General legacy to dependents of testator or settlor.
and lapse are not clear in the revocable trust setting. However, „„General legacy to creditor of testator or settlor in satisfaction of a
because revocable trusts are generally considered will substitutes, just debt.
the rules of construction for wills are generally the same for trusts;
„„General legacy to surviving spouse of testator or settlor.
the court will try to ascertain the testator’s or settlor’s intent. It is
therefore likely that Maryland courts will apply the law of wills to „„Specific and demonstrative legacies.

revocable trusts in this context, as has been done by Maryland courts (Md. Code Ann., Est. & Trusts § 9-103(b).)
in other contexts (Md. Code Ann., Est. & Trusts §§ 14.5-103(z) and
14.5-105, Vito, 160 A.3d at 602-03 and see, for example, Upman v. Counsel should add custom priority provisions in a trust agreement
Clarke, 359 Md. 32, 46, 753 A.2d 4, 11 (2000)). if the settlor prefers that certain dispositions be cancelled or reduced
if the assets are insufficient to satisfy all distributions under the
BENEFICIARY DOES NOT SURVIVE (LAPSE) trust agreement.
Maryland has an anti-lapse statute under the law of wills that states GIFTED PROPERTY ENCUMBERED
that a legacy may not lapse or fail due to the death of the legatee
unless a contrary intent is expressly stated in the will (Md. Code Ann., Under the law of wills, unless a contrary intent is stated in the
Est. & Trusts § 4-403). This rule likely applies to distributions under a document, a legacy of specific property passes subject to a
trust if the trust does not provide for what happens if the beneficiary security interest or lien existing at the time of execution of the
predeceases the settlor. This rule does not apply in the context of will or which is a renewal, extension, or refinancing of a security
wills if the legatee was dead when the will was made (and similarly interest or lien that existed at the time the will was executed. The
likely does not apply in the trust context) (see Billingsley v. Tongue, legatee is entitled to exoneration if the security interest or lien is
9 Md. 575 (1856)). created or attaches after the execution of the will. (Md. Code Ann.,
Est. & Trusts §4-406.) These rules likely apply to Maryland trusts,
A non-spouse legatee who does not survive the testator (or likely as well, since trusts are generally considered will substitutes
the settlor, if a trust is involved) by 30 days is considered to have (Vito, 160 A.3d at 602-03).
predeceased unless the document specifically states otherwise
(Md. Code Ann., Est. & Trusts § 4-401). EFFECT OF DIVORCE
After the creation of the settlor’s revocable trust, if the settlor and the
GIFT NOT OWNED BY SETTLOR AT DEATH (ADEMPTION) settlor’s spouse divorce or if the marriage is annulled:
Under the law of wills, when specific property bequeathed in a will „„All terms relating to trust distributions to or for the benefit of
is not owned by the testator at the testator’s death, the property the spouse are revoked and the spouse is considered to have
is considered to have adeemed and the gift fails (Von Steinner v. predeceased the settlor for the purposes of the trust.
Sorrell, 259 Md. 228, 230, 269 A.2d 604, 605 (1970)). This rule
„„The spouse is removed as a trustee or an advisor without further
likely applies to gifts made by Maryland trusts, as well, since
court action.
trusts are generally considered will substitutes (Vito, 160 A.3d
at 602-03). „„The former spouse may not serve as trustee or an advisor
or exercise any trust or fiduciary powers after the divorce or
To avoid confusion and potential disputes after death, counsel should annulment.
generally advise the client to update the trust agreement when the (Md. Code Ann., Est. & Trusts § 14.5-604(b).)
client no longer owns property that is specifically gifted in the trust
agreement. These rules do not apply if otherwise expressly provided:
„„In the trust instrument.
INSUFFICIENT ASSETS (ABATEMENT)
„„By court order.
Under the law of wills, specific legacies almost always have priority
„„By agreement between the settlor and the settlor’s spouse or
over other bequests. Assets are available first to pay debts and
former spouse.
costs. If the remaining assets are insufficient to pay all legacies,
specific legacies have priority over other legacies. (Hall v. Elliott, (Md. Code Ann., Est. & Trusts § 14.5-604(a)(2).)
236 Md. 196, 204–05, 202 A.2d 726, 730–31 (1964).) These rules
likely apply to Maryland trusts, as well, since trusts are generally SIMULTANEOUS DEATH
considered will substitutes (Vito, 160 A.3d at 602-03). Where a disposition of property depends on the priority of death,
and there are simultaneous deaths with no sufficient evidence
Unless a contrary intent is stated in the document, legacies in a will that the persons died in a specific order, each person’s property is
or trust abate in proportional amounts in order as follows: generally disposed of as if that person was the survivor (Md. Code
„„Residuary legacies. Ann., Cts. & Jud. Proc. § 10-801). However, both a testator and settlor
„„General legacy (other than general legacies to the testator’s may provide for a different disposition of property in the trust or will
or settlor’s dependents, the testator’s or settlor’s creditor by stating who is the survivor under those circumstances. (Md. Code
in satisfaction of a just debt, or to the testator’s or settlor’s Ann., Cts. & Jud. Proc. § 10-805).
surviving spouse).

10 © 2019 Thomson Reuters. All rights reserved.

 Revocable Trusts: Maryland

CREDITOR PROTECTION only reach the beneficiary’s interest when it is distributed to the
beneficiary. (Md. Code Ann., Est. & Trusts §§ 14.5-502 to 14.5-504.)
25. What, if any, creditor protection does a revocable trust However, both a spendthrift provision and a support provision my
provide in your state. In particular, please specify: still be reached in satisfaction of an enforceable claim by:
„„Any protection provided regarding the settlor’s debts during life. „„A child, spouse, or former spouse of the beneficiary that has a
„„Any protection provided regarding the settlor’s debts after the judgment or court order against the beneficiary for support or
settlor’s death. maintenance.
„„Any protection provided regarding the debts of the trust „„A judgment creditor that has provided services for the protection
beneficiaries after the settlor’s death. of the interest of a beneficiary in the trust.
„„Whether revocable trust assets are considered available „„Maryland or the United States, in certain limited cases.
resources in determining Medicaid eligibility. (Md. Code Ann., Est. & Trusts § 14.5-505.)

SETTLOR’S DEBTS DURING LIFE MEDICAID ELIGIBILITY

A revocable trust does not provide asset protection during the life Assets titled in a settlor’s revocable trust, which the settlor contributed
of the settlor. A revocable trust can preserve the protection under to the trust, are considered available resources for determining the
Maryland law for married couples when property that is transferred settlor’s Medicaid eligibility (42 U.S.C. § 1396p(d)(3)(A) and COMAR
to the trust was initially titled tenants by the entirety (see Tenants 10.09.24.01).
by the Entirety).
COURT SUPERVISION AND PRIVACY
SETTLOR’S DEBTS AFTER DEATH
26. Is a revocable trust court supervised on the death of
In Maryland, the property of a trust that was revocable at the
the settlor?
settlor’s death is subject to the claims of the settlor’s creditors,
subject to the settlor’s right to direct the source from which liabilities
A revocable trust is normally not subject to ongoing supervision
are to be paid (Md. Code Ann., Est. & Trusts § 14.5-508(a)(5)). If
by a court after the death of the settlor unless the court orders
there are insufficient assets in the trust to pay final expenses and
supervision. However, an interested person may petition a court
debts, payments are generally made from the estate in the order
or a court on its own may intervene in the administration of a trust
prescribed by statute (Md. Code Ann., Est. & Trusts § 8-105(a)).
and provide remedies as required considering the public interest
If the settlor has no probate estate, the trustee may publish a general and the interests of the beneficiaries. (Md. Code Ann., Est. & Trusts
notice to creditors substantially in the form provided by statute. § 14.5-201.) An interested person is:
The trustee must publish the notice for three successive weeks in „„A person named as the executor in a will.
a newspaper of general circulation in the venue where probate
„„A person serving as personal representative after judicial or
would have been filed for the decedent (Md. Code Ann., Est. & Trusts
administrative probate.
§ 14.5-508(b)). Claims by the deceased settlor’s creditors are barred
unless the creditor files an action against the trustee or presents „„A distributee with a vested or contingent interest that has not

sufficient notice to the trustee within the 6-month term following the first been fully paid.
publication of a notice (Md. Code Ann., Est. & Trusts § 14.5-508(b)(4)). „„An heir (a person entitled to receive property in intestacy).

The trustee can pay a properly presented claim or can disallow it (Md. Code Ann., Est. & Trusts § 1-101(h), (i).)
in whole or in part. If a properly presented claim is disallowed in
27.Does an estate plan that includes a revocable trust afford a
whole or in part, the claim is barred unless the claimant files an
settlor more privacy than a will-based estate plan?
action against the trustee or the beneficiary to whom the property is
distributed within 60 days of the mailing of the notice of disallowance
In Maryland, a revocable trust is not published in the public
(if the notice informed the claimant about this time limitation)
record like a will (Md. Code Ann., Est. & Trusts §§ 2-211 and 4-201).
(Md. Code Ann., Est. & Trusts § 14.5-508(b)(6)).
Since a revocable trust is generally administered without any
DEBTS OF TRUST BENEFICIARIES AFTER SETTLOR’S DEATH public proceeding, the details of the trust agreement are kept
private, unless the trust assets become subject to court supervision
A revocable trust can provide some asset protection to the (Md. Code Ann., Est. & Trusts § 14.5-201 and see Question 26).
beneficiaries after the death of the settlor.
However, having a revocable trust does not guarantee there will be
If the trust agreement includes a discretionary distribution no probate estate. Any assets that are not titled to the trust or do not
provision, a support provision, or a spendthrift provision, the have an associated survivorship right or beneficiary designation may
beneficiary’s interest cannot be judicially foreclosed, attached pass through probate and be made public record.
by a creditor, or transferred by the beneficiary. The creditors can

© 2019 Thomson Reuters. All rights reserved. 11

 Revocable Trusts: Maryland

„„The trustee’s address.

28. Are the beneficiaries of a revocable trust entitled to notice
of its existence, or any other information, during the settlor’s „„The trustee’s phone number.

life or when the settlor dies? (Md. Code Ann., Est. & Trusts § 14.5-813(b)(1)(i).)
Within 90 days of a revocable trust becoming irrevocable, the trustee
In Maryland, while a settlor is alive and has capacity, the beneficiaries of must notify the qualified beneficiaries of:
a revocable trust are not entitled to notice of its existence or any other
„„The trust’s existence.
information. If the settlor becomes incapacitated, the beneficiaries are
entitled to notice only if they were entitled to distributions during the „„The settlor’s identity.
settlor’s lifetime. (Md. Code Ann., Est. & Trusts § 14.5-603.) „„The qualified beneficiaries’ right to request a copy of the trust
agreement.
Qualified beneficiaries (usually, there are no qualified beneficiaries
of a revocable trust, other than the settlor or settlors, until after „„The qualified beneficiaries’ right to a trustee’s report, which is an
the settlor’s death) are entitled to certain notice and information accounting of the trust property, liabilities, receipts, disbursements,
anytime a change of trustee occurs. and other transactions involving the trust.

Within 60 days of accepting a trusteeship, the trustee must notify the (Md. Code Ann., Est. & Trusts § 14.5-813(b)(1)(ii).) For a definition of
qualified beneficiaries of: qualified beneficiaries, see Appointment of Successor Trustee.
„„The acceptance.

„„The trustee’s name.

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