# Estates and Trusts (GET)

## Title 14.5. Maryland Trust Act

### Subtitle 5. Creditor's Claims; Spendthrift and Discretionary Trusts

#### Section 14.5-501

(a) A court may authorize a creditor or an assignee of a beneficiary to reach the interest of the beneficiary by attachment of present or future distributions to or for the benefit of the beneficiary or by other means if that interest is not subject to a discretionary distribution provision, a support provision, or a spendthrift provision.

(b) The court may limit the amount, timing, or other terms and conditions of an award under this section to relief as is appropriate under the circumstances considering, among other factors:

  (1) The support needs of the beneficiary, the spouse of the beneficiary, the former spouse of the beneficiary, and the dependent children of the beneficiary;

  (2) With respect to a beneficiary that is the recipient of public benefits, the supplemental needs of the beneficiary if the trust was not intended to provide for the basic support of the beneficiary; and

  (3) The amount of the claim of the creditor or assignee and the likely proceeds that a sale would produce as compared to the potential value of the interest to the beneficiary.

#### Section 14.5-502

(a)

  (1) A beneficiary of a discretionary distribution provision has no property right in a trust interest that is subject to a discretionary distribution provision.

  (2) A beneficial interest that is subject to a discretionary distribution provision may not be judicially foreclosed, attached by a creditor, or transferred by the beneficiary.

(b)

  (1) The creditor of the beneficiary of a discretionary distribution provision created by someone other than that beneficiary has no enforceable right to trust income or principal that may be distributed only in the exercise of the discretion of the trustee.

  (2) Trust property that is subject to a discretionary distribution provision is not subject to the enforcement of a judgment until income or principal or both is distributed directly to the beneficiary.

(c) A creditor of a beneficiary may not compel a distribution that is subject to a discretionary distribution provision created by someone other than that beneficiary.

(d) A trust may contain a discretionary distribution provision with respect to one or more but less than all beneficiaries.

(e) If a beneficiary of a discretionary distribution provision has a power of withdrawal created by someone other than that beneficiary:

  (1) During the period the power may be exercised, the portion of the trust the beneficiary may withdraw may not be deemed to be subject to the discretionary distribution provision with respect to that beneficiary;

  (2) During the period the power may be exercised, the portion of the trust the beneficiary may not withdraw shall be deemed to be subject to the discretionary distribution provision with respect to that beneficiary; and

  (3) During periods in which the beneficiary does not have a power of withdrawal, the trust interest of the beneficiary shall be deemed to be subject to the discretionary distribution provision with respect to that beneficiary.

(f) If a beneficiary and one or more others have made contributions to a trust subject to a discretionary distribution provision, the portion of the trust attributable to the contributions of the beneficiary may not be deemed to be subject to that discretionary distribution provision with respect to that beneficiary, but the portion of the trust attributable to the contributions of others shall be deemed to be subject to the discretionary distribution provision with respect to that beneficiary.

(g) The interest of a beneficiary who is blind or disabled as defined in 42 U.S.C. Sec. 1382c(a)(3) may be subject to a discretionary distribution provision notwithstanding:

  (1) Precatory language in the trust instrument regarding the intended purpose of the trust of providing supplemental goods and services to or for the benefit of the beneficiary, and not to supplant benefits from public assistance programs; or

  (2) A prohibition against providing food, clothing, and shelter to the beneficiary.

#### Section 14.5-503

(a) Except as provided in Sec.Sec. 14.5-505 and 14.5-506(b) of this subtitle:

  (1) A beneficial interest that is subject to a support provision may not be judicially foreclosed, attached by a creditor, or transferred by the beneficiary; and

  (2) Trust property that is subject to a support provision is not subject to the enforcement of a judgment until income or principal or both is distributed directly to the beneficiary.

(b)

  (1) The use, occupancy, and enjoyment of a single parcel of residential real property, as designated by the trustee, and tangible personal property by a beneficiary whose interest is subject to a support provision may not be transferred by the beneficiary of the use, occupancy, or enjoyment.

  (2) The use, occupancy, and enjoyment described in paragraph (1) of this subsection are not subject to the enforcement of a judgment against the beneficiary.

#### Section 14.5-504

(a) A spendthrift provision is valid and enforceable.

(b) A provision of a trust providing that the interest of a beneficiary is held subject to a "spendthrift trust", or words of similar import, restrains both voluntary and involuntary transfer of the beneficiary's interest.

(c) A beneficial interest that is subject to a spendthrift provision may not be judicially foreclosed or attached by a creditor.

(d)

  (1) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision and, except as otherwise provided in this subtitle, a creditor or an assignee of the beneficiary may not reach the interest or a distribution by the trustee before the receipt by the beneficiary of the interest or distribution.

  (2) An attempt by a beneficiary to transfer an interest in a trust in violation of a valid spendthrift provision shall be void and of no effect.

(e)

  (1) The use, occupancy, and enjoyment of a single parcel of residential real property, as designated by the trustee, and tangible personal property by a beneficiary whose interest is subject to a spendthrift provision may not be transferred.

  (2) The use, occupancy, and enjoyment described in paragraph (1) of this subsection are not subject to the enforcement of a judgment against the beneficiary.

#### Section 14.5-505

(a) In this section, "child" includes any person for whom an order or a judgment for child support has been entered in this State or another state.

(b) Subject to the provisions of Sec. 14.5-502 of this subtitle, the interest of a beneficiary that is subject to either a spendthrift provision or a support provision or both can be reached in satisfaction of an enforceable claim against the beneficiary by the following:

  (1) A child, spouse, or former spouse of the beneficiary that has a judgment or court order against the beneficiary for support or maintenance;

  (2) A judgment creditor that has provided services for the protection of the interest of a beneficiary in the trust; or

  (3) A claim of this State or the United States to the extent a statute of this State or federal law so provides.

(c)

  (1) A claimant described in subsection (b) of this section may obtain from a court an order attaching present or future distributions to or for the benefit of the beneficiary.

  (2) The court may only order the trustee to satisfy all or part of the judgment out of payments of income or principal as they become due.

  (3) The court may limit the award to such relief as is appropriate under the circumstances, considering among any other factors determined appropriate by the court:

    (i) The support needs of the beneficiary's spouse, former spouse, and dependent children;

    (ii) The support needs of the beneficiary; or

    (iii) With respect to a beneficiary that is the recipient of public benefits, the supplemental needs of the beneficiary if the trust was not intended to provide for the basic support of the beneficiary.

#### Section 14.5-506

(a) To the extent that the interest of a beneficiary subject to a mandatory distribution provision, other than a support provision, does not contain a spendthrift provision, the court may authorize a creditor or an assignee of the beneficiary to attach present or future mandatory distributions to or for the benefit of the beneficiary, or to reach the beneficiary's interest by other means, as provided in Sec. 14.5-501 of this subtitle.

(b) A creditor or an assignee of a beneficiary may reach a mandatory distribution of a trust if the trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution date, whether or not the trust contains a spendthrift provision or a support provision.

#### Section 14.5-507

(a)

  (1) A power of appointment held by a person other than the settlor of the trust is not a property interest.

  (2) A power of appointment described in paragraph (1) of this subsection and property subject to that power of appointment may not be judicially foreclosed or attached by a creditor of the holder of the power.

(b) None of the following shall be sufficient to create a general power of appointment or a power of withdrawal with respect to a beneficiary or settlor:

  (1) The beneficiary serving as a trustee or cotrustee;

  (2) The settlor or the beneficiary holding an unrestricted power to remove or replace a trustee;

  (3) The settlor or the beneficiary of a trust serving as a trust administrator, a partner of a partnership, a manager of a limited liability company, or an officer of a corporation, or serving in another managerial function of another type of entity if part or all of the trust property consists of an interest in the entity;

  (4) A person related by blood or adoption to the settlor or the beneficiary serving as trustee of the trust;

  (5) The agent, accountant, attorney, financial adviser, or friend of the settlor or beneficiary serving as trustee of the trust;

  (6) A business associate of the settlor or the beneficiary serving as trustee of the trust;

  (7) A power of appointment held by the settlor other than the reserved power of the settlor to withdraw trust property for the benefit of the settlor, the creditors of the settlor, the estate of the settlor, or the creditors of the estate of the settlor;

  (8) A power to substitute property of equivalent value for trust property as defined in Sec. 675(4)(C) of the Internal Revenue Code of 1986, as amended; or

  (9) A power to borrow trust property for less than adequate interest or without security as defined in Sec. 675(2) of the Internal Revenue Code of 1986, as amended.

#### Section 14.5-508

(a) The following rules apply, whether or not the terms of a trust contain a spendthrift provision:

  (1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the creditors of the settlor;

  (2) With respect to an irrevocable trust, a creditor or an assignee of the settlor may reach only the lesser of:

    (i) The claim of the creditor or assignee; and

    (ii) The maximum amount that can be distributed to or for the benefit of the settlor;

  (3) If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the interest of the settlor in the portion of the trust attributable to the contribution of that settlor;

  (4) With respect to a trust described in 42 U.S.C. Sec. 1396p(d)(4)(A) or (C), the court may limit the award of the creditor of a settlor under items (1) and (2) of this subsection to the relief that is appropriate under the circumstances, considering among other factors determined appropriate by the court, the supplemental needs of the beneficiary; and

  (5) After the death of a settlor, and subject to subsection (b) of this section and the right of the settlor to direct the source from which liabilities will be paid, the property of a trust that was revocable at the death of the settlor is subject to claims of the creditors of the settlor.

(b)

  (1) Whether or not the terms of a trust contain a spendthrift provision, if a proceeding other than for a small estate under Title 5, Subtitle 6 of this article is commenced to administer the estate of a deceased settlor as provided in Title 5 of this article, property of a trust that was revocable at the death of the settlor is not subject to, and the trustee and beneficiaries of that trust may not be held liable for, claims of the creditors of the settlor that are not properly presented in the estate proceeding within the time periods specified in Sec. 8-103 of this article or that are disallowed and barred as provided in Sec. 8-107 of this article.

  (2)

    (i) If a proceeding as described under paragraph (1) of this subsection has not been commenced, the trustee of the trust of which the decedent was a settlor may publish a notice once a week for 3 successive weeks in a newspaper of general circulation in what would otherwise be the proper venue for an administrative or judicial probate for that decedent under Sec. 5-103 of this article.

    (ii) The notice shall:

      (1) Announce the death of the decedent;

      (2) Provide the name and address of the trustee;

      (3) Notify creditors of the decedent to present their claims to the trustee; and

      (4) Be substantially in the following form:

      Notice to Creditors of a Settlor of a Revocable Trust

      To all persons interested in the trust of ___________:

      This is to give notice that __________________ died on or about ______________. Before the decedent's death, the decedent created a revocable trust for which the undersigned, ___________________, whose address is __________________________________, is now a trustee.

      To have a claim satisfied from the property of this trust, a person who has a claim against the decedent must present the claim on or before the date that is 6 months after the date of the first publication of this notice to the undersigned trustee at the address stated above. The claim must include the following information:

      A verified written statement of the claim indicating its basis;

      The name and address of the claimant;

      If the claim is not yet due, the date on which it will become due;

      If the claim is contingent, the nature of the contingency;

      If the claim is secured, a description of the security; and

      The specific amount claimed.

      Any claim not presented to the trustee on or before that date or any extension provided by law is unenforceable.

      ______________________________Trustee

      Date of first publication: _____________________.

  (3) The publication of a notice in accordance with paragraph (2) of this subsection shall afford the trust property, the trustee, and the beneficiaries of the trust those protections under Sec. 8-103 of this article afforded to a decedent's estate, personal representative, and heirs and legatees against claims presented more than 6 months after the date of the first publication of the notice.

  (4) Claims against a deceased settlor are forever barred as against the trust property, the trustee, and the trust beneficiaries unless, within 6 months after the date of the first publication of a notice in accordance with paragraph (2) of this subsection, the creditor:

    (i) Files an action against the trustee on the creditor's claim and serves a copy of the complaint on the trustee within 30 days of the filing; or

    (ii) Presents to the trustee at the address provided in the notice:

      (1) A verified written statement of the claim indicating its basis;

      (2) The name and address of the claimant;

      (3) If the claim is not yet due, the date on which it will become due;

      (4) If the claim is contingent, the nature of the contingency;

      (5) If the claim is secured, a description of the security; and

      (6) The specific amount claimed.

  (5) A claim may not be deemed to have been presented to the trustee unless the claimant has provided all the information specified in paragraph (4) of this subsection.

  (6)

    (i) If a claim is presented to the trustee as provided in paragraph (4) of this subsection and the trustee disallows the claim wholly or in a stated amount, the claimant is forever barred to the extent of the disallowance unless the claimant files an action against the trustee or against any person to whom trust property has been distributed.

    (ii) An action under subparagraph (i) of this paragraph shall be filed within 60 days after the mailing of the notice of disallowance by the trustee to the claimant.

    (iii) The notice informing the claimant of the disallowance shall contain a warning to the claimant concerning the time limitation under subparagraph (ii) of this paragraph for commencing an action.

(c)

  (1) During the period the power of withdrawal may be exercised, the holder of a power of withdrawal shall be treated in the same manner as the settlor of a revocable trust to the extent of the property subject to that power.

  (2) After the lapse, waiver, or release of a power of withdrawal, the former power holder shall no longer be considered a settlor of the trust.

#### Section 14.5-509

Trust property is not subject to personal obligations of the trustee of the trust, even if the trustee becomes insolvent or bankrupt.

#### Section 14.5-510

(a) A creditor may not attach, exercise, reach, or otherwise compel distribution of the beneficial interest of a beneficiary that is a trustee or the sole trustee of the trust, but that is not a settlor of the trust, except to the extent that the interest would be subject to the claim of the creditor were the beneficiary not acting as cotrustee or sole trustee of the trust.

(b) A creditor may not attach, exercise, reach, or otherwise compel distribution of the beneficial interest of a beneficiary or any other person that holds an unconditional or conditional power to remove a trustee, to replace a trustee, or to remove and replace a trustee, except to the extent that the interest would be subject to the claim of the creditor if the beneficiary or other person did not have the power to remove, replace, or remove and replace a trustee.

#### Section 14.5-511

(a) In this section, "proceeds" means:

  (1) Property acquired by the trustee on the sale, lease, license, exchange, or other disposition of property originally conveyed by a husband and wife to a trustee or trustees;

  (2) Property collected by the trustee on, or distributed on account of, property originally conveyed by a husband and wife to a trustee or trustees;

  (3) Rights arising out of property originally conveyed by a husband and wife to a trustee;

  (4) Claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to property originally conveyed by a husband and wife to a trustee;

  (5) Insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to property originally conveyed by a husband and wife to a trustee; or

  (6) Property held by the trustee that is otherwise traceable to property originally conveyed by a husband and wife to a trustee or the property proceeds described in items (1) through (5) of this subsection.

(b) Property of a husband and wife that was held by them as tenants by the entirety and subsequently conveyed to the trustee or trustees of one or more trusts, and the proceeds of that property, shall have the same immunity from the claims of the separate creditors of the husband and wife as would exist if the husband and wife had continued to hold the property or the proceeds from the property as tenants by the entirety, as long as:

  (1) The husband and wife remain married;

  (2) The property or the proceeds from the property continue to be held in trust by the trustee or trustees or the successors in trust of the trustee or trustees;

  (3) Both the husband and wife are beneficiaries of the trust or trusts; and

  (4) The trust instrument, deed, or other instrument of conveyance provides that this section shall apply to the property or the proceeds from the property.

(c) After the death of the first of the husband or wife to die, all property held in trust that was immune from the claims of their separate creditors under subsection (b) of this section immediately prior to the death of the individual shall continue to have the same immunity from the claims of the separate creditors of the decedent as would have existed if the husband and wife had continued to hold the property conveyed in trust, or the proceeds from the property, as tenants by the entirety.

(d) The immunity from the claims of separate creditors under subsections (b) and (c) of this section may be waived, as to each specific creditor or all separate creditors of a husband and wife or specifically described trust property, or all former tenancy by the entirety property conveyed to the trustee or trustees, by:

  (1) The express provisions of a trust instrument; or

  (2) The written consent of both the husband and the wife.

(e)

  (1) Except as provided in paragraph (2) of this subsection, immunity from the claims of separate creditors under subsections (b) and (c) of this section shall be waived if a trustee executes and delivers a financial statement for the trust that fails to disclose the requested identity of property held in trust that is immune from the claims of separate creditors.

  (2) Immunity is not waived under this subsection if the identity of the property that is immune from the claims of separate creditors is otherwise reasonably disclosed by:

    (i) A publicly recorded deed or other instrument of conveyance by the husband and wife to the trustee;

    (ii) A written memorandum by the husband and wife, or by a trustee, that is recorded among the land records or other public records in the county or other jurisdiction where the records of the trust are regularly maintained; or

    (iii) The terms of the trust instrument, including a schedule or exhibit attached to the trust instrument, if a copy of the trust instrument is provided with the financial statement.

  (3) A waiver under this subsection shall be effective only as to:

    (i) The person to whom the financial statement is delivered by the trustee;

    (ii) The particular trust property held in trust for which the immunity from the claims of separate creditors is insufficiently disclosed on the financial statement; and

    (iii) The transaction for which the disclosure was sought.

(f) In a dispute relating to the immunity of trust property from the claims of a separate creditor of a husband or wife, the trustee has the burden of proving the immunity of the trust property from the claims of the creditor.

(g) After a conveyance to a trustee described in subsection (b) of this section, the property transferred shall no longer be held by the husband and wife as tenants by the entirety.

(h) This section may not be construed to affect existing State law with respect to a tenancy by the entirety.

(i) This section applies only to tenancy by the entirety property conveyed to a trustee or trustees on or after October 1, 2010.

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Md. Code Ann., Est. & Trusts (as displayed at mgaleg.maryland.gov, October 16, 2026)