The New Maryland Trust Act

The Maryland leCarroll Creek, Frederick, MDgislature recently enacted a new set of laws, “The Maryland Trust Act,” that went into effect January 1, 2015. In large part, these new laws do not change existing law, but they help clarify existing law in put it into place.

Prior to the Maryland Trust Act, much of the law on trusts was in the form of case law. With the enactment of the Maryland Trust Act, the law was codified and reorganized in one location to make the area of trust law easier to navigate.

Trusts are a flexible estate planning tool. A trust is not necessary for everyone, but can be essential in a variety of contexts, from blended families to tax planning. (Read more about the uses of trusts here.) The Maryland Trust Act does not provide terms for every type of trust out there, but often provides default rules for trusts. These default rules can often be changed in the drafting of the trust. When you should stick with the default rule and when you should deviate, should be carefully considered by you and your lawyer depending on your circumstances.

Some of these rules are mandatory, for instance, a trust can’t limit the power of the courts to modify a trust. Another important mandatory rule relates to the notice requirements of trustees to certain beneficiaries, called “qualified beneficiaries.” A trustee is required to notify qualified beneficiaries upon a trustee’s acceptance of a trust, or upon a trustee acquiring knowledge of a creation of a revocable trust or that a trust has become irrevocable. A qualified beneficiary may also request a copy of the trust instrument from a Trustee.

It is important the person drafting a trust knows which rules are mandatory and which are merely default rules. If you have questions about whether the new Maryland Trust Act changes your duties as a Trustee, or are curious whether a trust may help in your estate plan, talk to an experienced lawyer.

Montefusco Estate Planning, LLC
8133 Runnymeade Dr Frederick, Maryland 21702
Phone: 240-415-8323 URL of Map