<section article="get" article_name="Estates and Trusts" number="14-301" title_number="14" title_name="Trusts" subtitle_number="3" subtitle_name="Charitable Trusts"> <level label="a"> <text>Courts of equity have full jurisdiction to enforce trusts for charitable purposes upon suit of the State by the Attorney General or suit of any person having an interest in enforcement of the trust.</text> </level> <level label="b"> <text>“Charitable purposes” includes all purposes within either the spirit or letter of the statute of 43 Elizabeth ch. 4 (1601), commonly known as the statute of charitable uses.</text> </level> <level label="c"> <text>A charitable trust shall not be held invalid or unenforceable merely because the beneficiaries of the trust constitute an indefinite class.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-302" title_number="14" title_name="Trusts" subtitle_number="3" subtitle_name="Charitable Trusts"> <level label="a"> <text>A court of equity, on application of any trustee, or any interested person, or the Attorney General of the State, may order an administration of a trust, devise or bequest as nearly as possible to fulfill the general charitable intention of the settlor or testator:</text> <level label="1"> <level label="i"> <text>If the trust for charity is or becomes illegal or impossible or impracticable of enforcement; or</text> </level> <level label="ii"> <text>If the devise or bequest for charity, at the time it was intended to become effective, is illegal or impossible or impracticable of enforcement; and</text> </level> </level> <level label="2"> <text>If the settlor or testator manifested a general intention to devote the property to charity.</text> </level> </level> <level label="b"> <text>This section shall be interpreted and construed to effectuate its general purpose to make uniform the law of those states which enact it.</text> </level> <level label="c"> <text>This section may be cited as the Maryland Uniform Charitable Trusts Administration Act.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-303" title_number="14" title_name="Trusts" subtitle_number="3" subtitle_name="Charitable Trusts"> <level label="a"> <text>In the administration of any trust which is a “private foundation,” as defined in § 509 of the Internal Revenue Code, a “charitable trust,” as defined in § 4947(a)(1) of the Internal Revenue Code, or a “split–interest trust,” as defined in § 4947(a)(2) of the Internal Revenue Code, the acts specified in this section are prohibited.</text> </level> <level label="b"> <text>It is unlawful to engage in any act of “self–dealing,” as defined in § 4941(d) of the Internal Revenue Code, which would cause any tax liability under § 4941(a) of the Internal Revenue Code.</text> </level> <level label="c"> <text>It is unlawful to retain any “excess business holdings,” as defined in § 4943(c) of the Internal Revenue Code, which would cause any tax liability under § 4943(a) of the Internal Revenue Code.</text> </level> <level label="d"> <text>It is unlawful to make any investment which would jeopardize the carrying out of any exempt purposes under § 4944 of the Internal Revenue Code and cause any tax liability under § 4944(a) of the Internal Revenue Code.</text> </level> <level label="e"> <text>It is unlawful to make any “taxable expenditures,” as defined in § 4945(d) of the Internal Revenue Code, which would cause any tax liability under § 4945(a) of the Internal Revenue Code.</text> </level> <level label="f"> <text>This section does not apply to any part of a split–interest trust which is not subject to the prohibitions applicable to private foundations because of the provisions of § 4947 of the Internal Revenue Code.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-304" title_number="14" title_name="Trusts" subtitle_number="3" subtitle_name="Charitable Trusts"> <level label="a"> <text>Notwithstanding any provisions to the contrary in the governing instrument, the trustee or trustees of any charitable remainder trust created after July 31, 1969, with the consent of each beneficiary named in the governing instrument, without application to any court, may amend the governing instrument to conform to the provision of § 664 of the Internal Revenue Code by executing a written amendment to the trust for the purpose.</text> </level> <level label="b"> <text>Consent is not required as to individual named beneficiaries not living at the time of amendment.</text> </level> <level label="c"> <text>In the case of an individual beneficiary not competent to give consent, the consent of a guardian, appointed by a court of competent jurisdiction, shall be treated as consent of the beneficiary.</text> </level> <level label="d"> <text>In the case of any amendment to a trust created by will, the amendment, if provided in the amendment, may be considered to apply as of the date of death of the testator.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-305" title_number="14" title_name="Trusts" subtitle_number="3" subtitle_name="Charitable Trusts"> <text>In the administration of any trust which is a “private foundation” as defined in § 509 of the Internal Revenue Code, or which is a “charitable trust” as defined in § 4947(a)(1) of the Internal Revenue Code, there shall be distributed, for the purposes specified in the trust instrument, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by § 4942(a) of the Internal Revenue Code.</text> </section> <section article="get" article_name="Estates and Trusts" number="14-306" title_number="14" title_name="Trusts" subtitle_number="3" subtitle_name="Charitable Trusts"> <text>The provisions of §§ 14-303 and 14-305 of this subtitle do not apply to any trust to the extent that a court of competent jurisdiction determines that the application would be contrary to the terms of the instrument governing the trust and that it may not be changed properly to conform to these sections.</text> </section> <section article="get" article_name="Estates and Trusts" number="14-307" title_number="14" title_name="Trusts" subtitle_number="3" subtitle_name="Charitable Trusts"> <text>Sections 14-303 through 14-307 of this subtitle do not impair the rights and powers of the courts or the Attorney General with respect to any trust.</text> </section> <section article="get" article_name="Estates and Trusts" number="14-401" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <level label="a"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Adult” means an individual who is at least 18 years of age.</text> </level> <level label="c"> <text>“Beneficiary” means an individual for whose present benefit property is held by a trustee in accordance with this subtitle.</text> </level> <level label="d"> <text>“Conservator” means a person appointed or qualified by a court to act as general, limited, or temporary guardian of an individual’s property or a person legally authorized to perform substantially the same functions.</text> </level> <level label="e"> <text>“Court” means the circuit courts of the State of Maryland.</text> </level> <level label="f"> <text>“Declarant” means a transferor who creates a trust under this subtitle and serves as the trustee.</text> </level> <level label="g"> <text>“Guardian” means a person appointed or qualified by a court as a guardian of the person of an individual, including a limited guardian, but not a person who is only a guardian ad litem.</text> </level> <level label="h"> <text>“Legal representative” means a personal representative, conservator, or an attorney in fact under a durable power of attorney.</text> </level> <level label="i"> <text>“Member of the beneficiary’s family” means a beneficiary’s spouse, descendant, stepchild, parent, stepparent, grandparent, brother, sister, uncle, or aunt, whether of the whole or half blood or by adoption.</text> </level> <level label="j"> <text>“Person” means an adult, corporation, organization, or any other legal entity.</text> </level> <level label="k"> <text>“Personal representative” means an executor, administrator, or special administrator of a decedent’s estate, a person legally authorized to perform substantially the same functions, or a successor to any of them.</text> </level> <level label="l"> <text>“State” means the United States of America, a state or subdivision thereof, a territory or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States.</text> </level> <level label="m"> <level label="1"> <text>“Transferor” means a person who creates a trust by transfer or declaration under this subtitle.</text> </level> <level label="2"> <text>“Transferor” does not include a person, other than the person who created the trust, who augments an existing trust.</text> </level> </level> <level label="n"> <level label="1"> <text>“Trust” means a trust created under this subtitle.</text> </level> <level label="2"> <text>“Trust” does not include a trust created by the transferor for the benefit of the transferor.</text> </level> </level> <level label="o"> <text>“Trust property” means any property, income, or proceeds resulting from the investment of property held in trust under this subtitle.</text> </level> <level label="p"> <text>“Trustee” means a person authorized by law to act as trustee who is designated as trustee of a trust under this subtitle or successor to the person designated.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-402" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <level label="a"> <level label="1"> <text>The trustee holds title to the trust property.</text> </level> <level label="2"> <text>Trust property may not be considered property or an available resource of the beneficiary.</text> </level> <level label="3"> <text>The beneficiary may not have any interest in trust property that can be assigned or attached.</text> </level> <level label="4"> <text>No part of the trust property may be subject to claims for costs of care provided to the beneficiary by a state.</text> </level> </level> <level label="b"> <level label="1"> <text>The trustee has sole discretion over trust property expenditures.</text> </level> <level label="2"> <text>The trustee shall decide what expenditures will be made, how they will be made, and when they will be made for the benefit of the beneficiary.</text> </level> <level label="3"> <text>A trust may be used to ensure that trust property is available to provide for the needs of the beneficiary to the extent not provided for by other sources, including public and private benefit programs for which the beneficiary would or might be eligible if the trust did not exist.</text> </level> <level label="4"> <text>A trustee may retain any trust property received from a transferor.</text> </level> </level> <level label="c"> <text>A person dealing with a transferor, declarant, or trustee is protected in those dealings in accordance with § 14-405 of this subtitle.</text> </level> <level label="d"> <text>Any person except the beneficiary may augment trust property.</text> </level> <level label="e"> <level label="1"> <text>When establishing a trust, the transferor may designate the trust to be either revocable or irrevocable.</text> </level> <level label="2"> <text>If no designation is made, the trust is revocable.</text> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-403" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <level label="a"> <text>Any person having the right to transfer property to another person may create a trust as a transferor under this subtitle.</text> </level> <level label="b"> <text>The transferor may:</text> <level label="1"> <text>As declarant serve as trustee;</text> </level> <level label="2"> <text>Designate a trustee;</text> </level> <level label="3"> <text>Designate how the trustee will be chosen;</text> </level> <level label="4"> <text>Designate successor trustees in the order in which they will serve; and</text> </level> <level label="5"> <text>Designate how successor trustees will be chosen.</text> </level> </level> <level label="c"> <text>The trustee shall hold, manage, expend, and transfer trust property as provided in this subtitle.</text> </level> <level label="d"> <text>The successor trustee shall assume the responsibilities of the trustee when the trustee is no longer willing or able to serve.</text> </level> <level label="e"> <text>A trust may have only one beneficiary but more than one trustee.</text> </level> <level label="f"> <text>A trustee:</text> <level label="1"> <text>Is not personally liable to a third person:</text> <level label="i"> <text>On a contract properly entered into in a fiduciary capacity unless the trustee fails to reveal that capacity or to identify the trust in the contract; or</text> </level> <level label="ii"> <text>For an obligation arising from control of trust property or for a tort committed in the course of the administration of the trust, unless the trustee is personally at fault;</text> </level> </level> <level label="2"> <text>May decline to serve as trustee before accepting trust property by notifying in writing the person who designated the trustee, or that person’s legal representative; and</text> </level> <level label="3"> <text>May resign as trustee by notifying the successor trustee in writing, transferring all trust property to the successor trustee, providing the successor trustee with a complete accounting of trust property, and confirming that the successor trustee has accepted the trust property.</text> </level> </level> <level label="g"> <text>The next willing successor trustee in line shall accept the records and trust property and become trustee as soon as practicable after:</text> <level label="1"> <text>The resignation of the trustee;</text> </level> <level label="2"> <text>The declination of the trustee;</text> </level> <level label="3"> <text>The death of the trustee; or</text> </level> <level label="4"> <text>The removal of the trustee.</text> </level> </level> <level label="h"> <text>If the trustee is unable or unwilling to serve and no successor trustee will serve, the following persons in the order listed may petition the court to designate a successor trustee:</text> <level label="1"> <text>The transferor or the legal representative of the transferor;</text> </level> <level label="2"> <text>The trustee;</text> </level> <level label="3"> <text>The beneficiary or the beneficiary’s legal representative;</text> </level> <level label="4"> <text>The guardian of the person of the beneficiary;</text> </level> <level label="5"> <text>An adult member of the beneficiary’s family or that family member’s legal representative; or</text> </level> <level label="6"> <text>A person interested in the trust property or a person interested in the welfare of the beneficiary, either of whom the court determines to have a legitimate interest.</text> </level> </level> <level label="i"> <text>Unless renounced by the transferor, the transferor may at any time remove or change the designation of the trustee and successor trustees.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-404" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <level label="a"> <text>A person may create a trust by transferring property in writing to another person if the document transfers property in a legally recognized manner and:</text> <level label="1"> <text>Identifies the recipient of the property as the trustee;</text> </level> <level label="2"> <text>Identifies the beneficiary of the trust; and</text> </level> <level label="3"> <text>Identifies the property as being transferred under the Maryland Discretionary Trust Act.</text> </level> </level> <level label="b"> <text>A person may create a trust by written declaration if the written declaration is executed in a legally recognized manner and:</text> <level label="1"> <text>Identifies the property to be held in trust;</text> </level> <level label="2"> <text>Identifies the beneficiary of the trust;</text> </level> <level label="3"> <text>Identifies the declarant as trustee and title holder; and</text> </level> <level label="4"> <text>Identifies the property as being held in trust under the Maryland Discretionary Trust Act.</text> </level> </level> <level label="c"> <text>A person having the right to transfer property upon a future event may create a trust upon the occurrence of the future event by:</text> <level label="1"> <text>Designating:</text> <level label="i"> <text>The event;</text> </level> <level label="ii"> <text>The property;</text> </level> <level label="iii"> <text>The beneficiary; and</text> </level> <level label="iv"> <text>The trustee or mechanism for selecting the trustee; and</text> </level> </level> <level label="2"> <text>Creating the trust by:</text> <level label="i"> <text>Making the designation in a will, a trust, a deed, an insurance policy, an instrument exercising a power of appointment, or a writing designating a beneficiary of contractual rights; or</text> </level> <level label="ii"> <text>Registering the designation with or delivering it to the fiduciary, payor, issuer, or obligor of the future right.</text> </level> </level> </level> <level label="d"> <text>A transferor creates a trust whenever the transferor registers property in the name of or transfers property to the trustee or declarant and uses in substance the following words after the trustee’s or declarant’s name: “As trustee for ___________________ (name of beneficiary) under the Maryland Discretionary Trust Act.”</text> </level> <level label="e"> <text>The obligations of a trustee begin when the trustee accepts the trust property by writing in substance the following words:</text> <text>“Trustee’s Receipt and Acceptance</text> <text>I, ____________________ (name of trustee) acknowledge receipt of the trust property described below or in the attached instrument and accept the trust as trustee for ____________________ (name of beneficiary) under the Maryland Discretionary Trust Act. I undertake to administer and distribute the trust property pursuant to the Maryland Discretionary Trust Act. The trust property consists of ____________________ (description of property).</text> <text>Dated: _______________</text> <text>_____________________________</text> <text>(Signature of Trustee)”</text> </level> <level label="f"> <text>A trust may be created by specifying that property is to be held in trust under the Maryland Discretionary Trust Act.</text> </level> <level label="g"> <level label="1"> <text>A trust may be created under this subtitle if, at the time the trust is created, the transferor, the trustee, or the beneficiary is a resident of this State, the transferor’s, the trustee’s, or the beneficiary’s principal place of business is in this State, or trust property is located in this State.</text> </level> <level label="2"> <text>The trust remains subject to this subtitle even upon a subsequent change in residence or principal place of business of the transferor or trustee, or removal of the trust property from this State.</text> </level> <level label="3"> <text>A registration, declaration, or transfer made under an act of another state substantially similar to this subtitle:</text> <level label="i"> <text>Is governed by the law of that state; and</text> </level> <level label="ii"> <text>May be enforced in this State.</text> </level> </level> </level> <level label="h"> <level label="1"> <text>This subtitle may not limit other means of declaring trusts or transferring property in trust.</text> </level> <level label="2"> <text>A trust, the terms of which do not conform to this subtitle, may be enforceable according to its terms.</text> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-405" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <level label="a"> <text>The trustee’s obligations begin when the trustee accepts the trust property by writing words substantially similar to those specified in § 14-404(e) of this subtitle.</text> </level> <level label="b"> <text>A trustee shall:</text> <level label="1"> <text>Take control of trust property;</text> </level> <level label="2"> <text>Register or record title to trust property if appropriate; and</text> </level> <level label="3"> <text>Collect, hold, manage, invest, and reinvest trust property.</text> </level> </level> <level label="c"> <text>In administering trust property, a trustee shall observe the standard of care that would be observed by a prudent person dealing with property of another and is not limited by any other statute restricting investments by fiduciaries.</text> </level> <level label="d"> <text>If a trustee has a special skill or expertise, or is named trustee on the basis of representations of a special skill or expertise, the trustee shall utilize that skill or expertise.</text> </level> <level label="e"> <level label="1"> <text>A trustee shall at all times keep trust property separate and distinct from all other property in a manner sufficient to identify it clearly as trust property.</text> </level> <level label="2"> <text>Trust property consisting of an undivided interest is so identified if the trustee’s interest is held as a tenant in common.</text> </level> <level label="3"> <text>Trust property subject to recordation is so identified if it is recorded, registered, or held in an account designated in the name of the trustee, followed by the words, “As trustee for ___________________ (name of beneficiary) under the Maryland Discretionary Trust Act”, or similar words.</text> </level> </level> <level label="f"> <text>A trustee, acting in a fiduciary capacity, has all the rights and powers over trust property that an unmarried adult owner has over individually owned property, but a trustee may exercise those rights and powers in a fiduciary capacity only.</text> </level> <level label="g"> <text>A claim based on a contract entered into by a trustee acting in a fiduciary capacity, an obligation arising from the trustee’s ownership or control of trust property, or a tort committed in the course of administering the trust, may be asserted by a third person against the trust property by proceeding against the trustee in a fiduciary capacity, whether or not the trustee is personally liable.</text> </level> <level label="h"> <text>At any time, the transferor may require the trustee to furnish bond.</text> </level> <level label="i"> <text>The trustee shall maintain complete records of all trust property and all trust transactions.</text> </level> <level label="j"> <level label="1"> <text>The following persons in the order listed may request an accounting of trust property and transactions:</text> <level label="i"> <text>The transferor or the transferor’s legal representative;</text> </level> <level label="ii"> <text>The beneficiary or the beneficiary’s legal representative;</text> </level> <level label="iii"> <text>The guardian of the person of the beneficiary;</text> </level> <level label="iv"> <text>An adult member of the beneficiary’s family or that family member’s legal representative; or</text> </level> <level label="v"> <text>A person interested in the trust property or a person interested in the welfare of the beneficiary, either of whom the court determines to have a legitimate interest.</text> </level> </level> <level label="2"> <text>The trustee shall provide a written accounting of all trust property and trust transactions for the previous year, or for a longer period if needed for tax purposes, upon request by and at reasonable times to a person authorized in paragraph (1) of this subsection.</text> </level> <level label="3"> <text>The trustee shall give the transferor, successor trustee, or court a complete accounting, including a written accounting of all trust property, a description and records of all trust transactions, and any other relevant documents and information concerning the trust upon the resignation or removal of the trustee, the termination of the trust, or the demand of the court.</text> </level> <level label="4"> <text>The trustee may petition the court for approval of final accounts.</text> </level> <level label="5"> <text>Upon removal of a trustee by a court, the court shall require:</text> <level label="i"> <text>An accounting of trust property;</text> </level> <level label="ii"> <text>The delivery of the trust property and records to the successor trustee; and</text> </level> <level label="iii"> <text>The execution of all instruments required for transfer of the trust property.</text> </level> </level> </level> <level label="k"> <text>Upon petition of the trustee or any person who may petition for an accounting as specified in subsection (j) of this section, the court, after notice to those persons as directed by the court, may:</text> <level label="1"> <text>Issue instructions to the trustee;</text> </level> <level label="2"> <text>Review the propriety of the acts of a trustee; and</text> </level> <level label="3"> <text>Review the reasonableness of the trustee’s compensation or the compensation of other persons.</text> </level> </level> <level label="l"> <text>A successor trustee may not be held liable for the acts or omissions of any predecessor trustee.</text> </level> <level label="m"> <text>Except as otherwise provided in the registration, declaration, or other instrument of transfer creating the trust, or by court order, a trustee:</text> <level label="1"> <text>Is entitled to reimbursement from trust property for reasonable expenses incurred in the performance of fiduciary services; and</text> </level> <level label="2"> <text>Has a noncumulative election, to be made no later than 6 months after the end of each calendar year, to charge reasonable compensation, not to exceed the maximum commissions for trustee services provided for at the time by Maryland law, for fiduciary services performed during that calendar year.</text> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-406" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <level label="a"> <text>The trust shall terminate upon the first to occur of:</text> <level label="1"> <text>The death of the beneficiary;</text> </level> <level label="2"> <text>A date or event specified in the trust document; or</text> </level> <level label="3"> <text>The determination by the trustee, in the trustee’s sole and absolute discretion, that by judicial, legislative, or administrative action, trust property or income has been or will be determined to be property or an available resource of the beneficiary.</text> </level> </level> <level label="b"> <text>Upon termination of a trust, the trustee shall transfer the unexpended trust property:</text> <level label="1"> <text>As designated in the instrument creating the trust; or</text> </level> <level label="2"> <text>If there is no designation, in the following order:</text> <level label="i"> <text>To the transferor, if living;</text> </level> <level label="ii"> <text>If the transferor is not living and died with a will, to those persons, other than the beneficiary, designated as residuary legatees in the transferor’s will in the proportions to which they were entitled under the transferor’s will; or</text> </level> <level label="iii"> <text>If the transferor is not living and died without a will, to those persons, other than the beneficiary, who would be entitled to receive the trust property at the time if the transferor died owning the trust property, without a will, and a resident of Maryland.</text> </level> </level> </level> <level label="c"> <text>The powers and duties of the trustee shall continue until the final and complete distribution of the trust property is made.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-407" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <level label="a"> <text>The following form may be used to create a trust by transfer:</text> <text>“Transfer Under the Maryland Discretionary Trust Act</text> </level> <level label="A"> <text>. I, _______________ (name of transferor or name of representative capacity if a fiduciary), transfer the property described in paragraph D to the trustee named in paragraph B, and such trustee’s successors, to be held in trust under the Maryland Discretionary Trust Act by the trustee for the benefit of the beneficiary named in paragraph C.</text> </level> <level label="B"> <level label="1"> <text>The�trustee�shall�be�________________________________________</text> <text>(name one or more).</text> </level> <level label="2"> <text>At any time when the trustee is unable to serve as trustee, the following persons shall succeed as trustee in the order named (specify who replaces whom for multiple trustees):</text> <level label="i"> <text>________________________________________________________</text> </level> <level label="ii"> <text>________________________________________________________</text> </level> <level label="iii"> <text>________________________________________________________</text> </level> </level> </level> <level label="C"> <text>The beneficiary shall be ______________________________________________</text> <text>(name one only)</text> </level> <level label="D"> <text>The trust property shall be:</text> <level label="1"> <text>______________________________________________________________</text> </level> <level label="2"> <text>______________________________________________________________</text> </level> </level> <level label="E"> <text>The trust shall terminate upon the first to occur of (check those applicable):</text> <level label="1"> <text>________ the death of the beneficiary</text> </level> <level label="2"> <text>________ the following date: _____________________________________</text> </level> <level label="3"> <text>________ the following event: ____________________________________</text> </level> </level> <level label="F"> <text>Upon termination, the remaining trust property shall be distributed to </text> <text>___________________________________________________________________</text> <text>(name person or persons)</text> </level> <level label="G"> <text>Revocability (check one):</text> <level label="1"> <text>________ The transferor may revoke this trust. </text> </level> <level label="2"> <text>________ The transferor may not revoke this trust. </text> <text>Signature of transferor __________________________________________________</text> <text>Date of execution _______________________________________________________</text> <text>Signature of witness ____________________________________________________</text> <text>Date: ____________________________________________________________</text> <text>Name of attorney preparing this statement of transfer:</text> <text>__________________________________________________________________</text> <text>State of Maryland, __________________________ : ss</text> <text>I hereby certify that on __________ (fill in date) before me, a notary public of the State of Maryland, personally appeared ____________________________________________ (name of transferor) known to me, or satisfactorily proven, to be the person whose name is subscribed to the within instrument and who acknowledges that he/she (strike one) executed the same for the purposes therein contained.</text> <text>Witness my hand and Notarial Seal.</text> <text>_________________________________</text> <text>Notary Public</text> <text>My commission expires: _______________.”</text> </level> </level> <level label="b"> <text>The following form may be used to create a trust by declaration:</text> <text>“Declaration of Trust Under the Maryland Discretionary Trust Act</text> </level> <level label="A"> <text>I, __________________________________________________ (name of property owner) declare that henceforth I as trustee will hold the property described in paragraph D in trust under the Maryland Discretionary Trust Act for the benefit of the beneficiary named in paragraph C.</text> </level> <level label="B"> <level label="1"> <text>At any time when I am unable to serve as trustee, the trustee shall be:</text> <text>_____________________________________________________________________________</text> <text>(name one or more)</text> </level> <level label="2"> <text>At any time when the trustee who succeeds me is unable to serve as trustee, the following persons shall succeed as trustee in the order named (specify who replaces whom for multiple trustees):</text> <level label="i"> <text>_________________________________________________________</text> </level> <level label="ii"> <text>________________________________________________________</text> </level> <level label="iii"> <text>_______________________________________________________</text> </level> </level> </level> <level label="C"> <text>The beneficiary shall be _____________________________________________</text> </level> <level label="D"> <text>The trust property shall be:</text> <level label="1"> <text>______________________________________________________________</text> </level> <level label="2"> <text>______________________________________________________________</text> </level> </level> <level label="E"> <text>The trust shall terminate upon the first to occur of (check those applicable):</text> <level label="1"> <text>________ The death of the beneficiary</text> </level> <level label="2"> <text>________ The following date: ____________________________________</text> </level> <level label="3"> <text>________ The following event: ___________________________________</text> <text>__________________________________________________________________</text> </level> </level> <level label="F"> <text>Upon termination, the remaining trust property shall be distributed to</text> <text>________________________________________________________________________</text> <text>(name person or persons)</text> </level> <level label="G"> <text>Revocability (check one): </text> <level label="1"> <text>_______ The declarant may revoke this trust</text> </level> <level label="2"> <text>_______ The declarant may not revoke this trust</text> <text>Signature of declarant ________________________________________________</text> <text>Date of execution _____________________________________________________</text> <text>Signature of witness __________________________________________________</text> <text>Date _________________________________________________________________</text> <text>Name of attorney preparing this declaration:</text> <text>__________________________________________________________</text> <text>State of Maryland, __________________________ : ss</text> <text>I hereby certify that on ____________________ (fill in date) before me, a notary public of the State of Maryland, personally appeared _______________________ (name of declarant) known to me, or satisfactorily proven, to be the person whose name is subscribed to the within instrument and who acknowledges that he/she (strike one) executed the same for the purposes therein contained.</text> <text>Witness my hand and Notarial Seal.</text> <text>_________________________________</text> <text>Notary Public</text> <text>My commission expires: ____________.”</text> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-408" title_number="14" title_name="Trusts" subtitle_number="4" subtitle_name="Maryland Discretionary Trust Act"> <text>This subtitle may be cited as the “Maryland Discretionary Trust Act”.</text> </section> <section article="get" article_name="Estates and Trusts" number="14-501" title_number="14" title_name="Trusts" subtitle_number="5" subtitle_name="Health Savings Accounts"> <level label="a"> <text>In this subtitle, “health savings account” has the meaning stated in § 223 of the Internal Revenue Code.</text> </level> <level label="b"> <text>A health savings account may be established as provided in § 15–144 of the Insurance Article.</text> </level> <level label="c"> <text>Except as provided in this subtitle or required by federal law, this article does not apply to a health savings account.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-601" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>The definitions in § 14.5–103 of this article apply in this subtitle.</text> </level> <level label="b"> <text>In this subtitle the following words have the meanings indicated.</text> </level> <level label="c"> <level label="1"> <text>“Authorized fiduciary” means a trustee or other fiduciary, other than a settlor, who has discretion to distribute or direct a trustee to distribute all or part of the principal of the first trust to a beneficiary.</text> </level> <level label="2"> <text>“Authorized fiduciary” includes:</text> <level label="i"> <text>A special fiduciary appointed under § 14–606 of this subtitle; and</text> </level> <level label="ii"> <text>A special needs fiduciary, as defined in § 14–610 of this subtitle.</text> </level> </level> </level> <level label="d"> <text>“Charitable interest” means an interest in a trust that:</text> <level label="1"> <text>Is held by an identified charitable organization and makes the organization a qualified beneficiary;</text> </level> <level label="2"> <text>Benefits only charitable organizations and, if the interest were held by an identified charitable organization, would make the organization a qualified beneficiary; or</text> </level> <level label="3"> <text>Is held solely for charitable purposes and, if the interest were held by an identified charitable organization, would make the organization a qualified beneficiary.</text> </level> </level> <level label="e"> <text>“Charitable organization” means:</text> <level label="1"> <text>A person, other than an individual, organized and operated exclusively for charitable purposes; or</text> </level> <level label="2"> <text>A government or governmental subdivision, agency, or instrumentality that holds funds exclusively for charitable purposes.</text> </level> </level> <level label="f"> <text>“Court” means the court in this State having jurisdiction in matters relating to trusts.</text> </level> <level label="g"> <level label="1"> <text>“Current beneficiary” means a beneficiary that, on the date the beneficiary’s qualification is determined, is a distributee or permissible distributee of trust income or principal.</text> </level> <level label="2"> <text>“Current beneficiary” includes a person who is a beneficiary solely because the person holds a presently exercisable general power of appointment.</text> </level> <level label="3"> <text>“Current beneficiary” does not include a person who is a beneficiary only because the person holds a power of appointment other than a presently exercisable general power of appointment.</text> </level> </level> <level label="h"> <text>“Decanting power” means the power of an authorized fiduciary to distribute property of a first trust to one or more second trusts or to modify the terms of a first trust.</text> </level> <level label="i"> <text>“Expanded distributive discretion” means a discretionary power of distribution that is not limited to an ascertainable standard or a reasonably definite standard.</text> </level> <level label="j"> <text>“First trust” means a trust over which an authorized fiduciary may exercise decanting power.</text> </level> <level label="k"> <text>“First trust instrument” means the trust instrument of a first trust.</text> </level> <level label="l"> <text>“Powerholder” means a person in which a settlor creates a power of appointment.</text> </level> <level label="m"> <level label="1"> <text>“Presently exercisable power of appointment” means a power of appointment exercisable by the powerholder at the relevant time.</text> </level> <level label="2"> <text>“Presently exercisable power of appointment” includes a power of appointment exercisable only after the occurrence of a specified event, the satisfaction of an ascertainable standard, or the passage of a specified time only after:</text> <level label="i"> <text>The occurrence of the specified event;</text> </level> <level label="ii"> <text>The satisfaction of the ascertainable standard; or</text> </level> <level label="iii"> <text>The passage of the specified time.</text> </level> </level> <level label="3"> <text>“Presently exercisable power of appointment” does not include a power exercisable only at the powerholder’s death.</text> </level> </level> <level label="n"> <text>“Reasonably definite standard” means a clearly measurable standard under which a holder of a power of distribution is legally accountable within the meaning of 26 U.S.C. § 674(b)(5)(A) and any applicable regulations.</text> </level> <level label="o"> <text>“Record” means information that is:</text> <level label="1"> <text>Inscribed on a tangible medium; or</text> </level> <level label="2"> <level label="i"> <text>Stored in an electronic or other medium; and</text> </level> <level label="ii"> <text>Retrievable in perceivable form.</text> </level> </level> </level> <level label="p"> <text>“Second trust” means:</text> <level label="1"> <text>A first trust which has been modified under this title; or</text> </level> <level label="2"> <text>A trust to which a distribution of property from a first trust has or may be made under this title.</text> </level> </level> <level label="q"> <text>“Second trust instrument” means the trust instrument of a second trust.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-602" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>Except as otherwise provided in this section, this subtitle applies to any express trust that:</text> <level label="1"> <text>Is irrevocable or revocable by the settlor only with the consent of the trustee or a person holding an adverse interest; and</text> </level> <level label="2"> <level label="i"> <text>Has its principal place of administration in this State, including a trust whose principal place of administration has been changed to this State; or</text> </level> <level label="ii"> <text>Is governed by the law of this State for the purpose of:</text> <level label="1"> <text>Administration, including administration of a trust whose governing law for purposes of administration has been changed to the law of this State;</text> </level> <level label="2"> <text>Construction of the terms of the trust; or</text> </level> <level label="3"> <text>Determining the meaning or effect of the terms of the trust.</text> </level> </level> </level> </level> <level label="b"> <text>This subtitle does not apply to a trust held solely for charitable purposes.</text> </level> <level label="c"> <text>Except as otherwise provided in this subtitle, a trust instrument may restrict or prohibit the exercise of the decanting power.</text> </level> <level label="d"> <text>This subtitle does not limit the power of a trustee, a powerholder, or any other person to:</text> <level label="1"> <text>Distribute or appoint property in further trust; or</text> </level> <level label="2"> <text>Modify a trust under the trust instrument, law of this State other than this title, common law, a court order, or a nonjudicial settlement agreement.</text> </level> </level> <level label="e"> <text>This subtitle does not limit the ability of a settlor to provide in a trust instrument for the distribution or appointment in further trust of trust property or the modification of the trust instrument.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-602.1" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>Notice to a person under this subtitle or the sending of a document to a person under this subtitle shall be accomplished in a manner reasonably suitable under the circumstances and likely to result in receipt of the notice or document.</text> </level> <level label="b"> <text>An authorized fiduciary shall provide notice to a person under this subtitle:</text> <level label="1"> <text>By personal service;</text> </level> <level label="2"> <text>By certified mail or first–class mail, postage prepaid, return receipt requested;</text> </level> <level label="3"> <text>By courier delivery service, delivery service prepaid, delivery confirmation requested; or</text> </level> <level label="4"> <text>If a person entitled to receive notice under this subtitle agrees in writing to accept an alternative form of notice:</text> <level label="i"> <text>By first–class mail, postage prepaid;</text> </level> <level label="ii"> <text>By facsimile transmission from a facsimile device that produces a confirmation page that specifies the date and time of a successful facsimile transmission; or</text> </level> <level label="iii"> <text>By e–mail, acknowledgement requested.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>A person may revoke the authorized fiduciary’s authorization to provide notice by an alternative method under subsection (b)(4) of this section by providing notice to the authorized fiduciary in a method specified under subsection (b)(1) through (3) of this section.</text> </level> <level label="2"> <text>An authorized fiduciary authorized to provide notice by an alternative method under subsection (b)(4) of this section may continue to provide notice by the authorized alternative method until the person entitled to receive notice revokes the authorization in accordance with paragraph (1) of this subsection.</text> </level> </level> <level label="d"> <text>If an authorized fiduciary who provides notice by an alternative method under subsection (b)(4) of this section knows or should know that the person entitled to receive notice did not actually receive notice, the authorized fiduciary shall provide notice to the person by a method specified under subsection (b)(1) through (3) of this section.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-603" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>In exercising the decanting power, an authorized fiduciary shall act in accordance with its fiduciary duties, including the duty to act in accordance with the purposes of the first trust.</text> </level> <level label="b"> <text>This subtitle does not create or imply a duty to exercise the decanting power or give notice to beneficiaries of the applicability of this subtitle.</text> </level> <level label="c"> <text>Except as otherwise provided in a first trust instrument, for purposes of this title and §§ 14.5–801 and 14.5–802(a) of this article, the terms of the first trust are deemed to include the decanting power.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-604" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>A trustee or other person who reasonably relies on the validity of a distribution of trust property to another trust or on a modification of a trust under this subtitle, the law of this State, or the law of any other jurisdiction is not liable to any person for any act or failure to act as a result of the reliance. </text> </section> <section article="get" article_name="Estates and Trusts" number="14-605" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>Except as otherwise provided in this subtitle, an authorized fiduciary may exercise the decanting power without the consent of any person and without court approval.</text> </level> <level label="b"> <level label="1"> <text>Except as provided in subsection (d) of this section and paragraph (2) of this subsection, an authorized fiduciary shall give notice in a record of any intended exercise of the decanting power at least 60 days before the exercise to:</text> <level label="i"> <text>Each settlor of the first trust, if living or then in existence;</text> </level> <level label="ii"> <text>Each qualified beneficiary of the first trust and the Attorney General if the Attorney General has the rights of a qualified beneficiary under § 14–611 of this subtitle;</text> </level> <level label="iii"> <text>Each holder of a presently exercisable power of appointment over any part of the first trust;</text> </level> <level label="iv"> <text>Each person that currently has a right to remove or replace the authorized fiduciary; and</text> </level> <level label="v"> <text>Any other fiduciary of the first or second trusts.</text> </level> </level> <level label="2"> <text>An authorized fiduciary is not required to give notice to any person under this subsection if the person is not known to the fiduciary or is known to the fiduciary and cannot be located after reasonable diligence.</text> </level> </level> <level label="c"> <text>The notice required under subsection (b) of this section shall:</text> <level label="1"> <text>Specify the manner in which the authorized fiduciary intends to exercise the decanting power;</text> </level> <level label="2"> <text>Specify the proposed effective date for the exercise of the power; and</text> </level> <level label="3"> <text>Include a copy of the first trust instrument and all second trust instruments.</text> </level> </level> <level label="d"> <text>An authorized fiduciary may exercise the decanting power sooner than 60 days after providing the notice required by subsection (b) of this section if all persons entitled to receive the notice waive the period in a signed record.</text> </level> <level label="e"> <text>The receipt of notice, waiver of the notice period, or expiration of the notice period does not affect the right of a person to file an application asserting that:</text> <level label="1"> <text>An attempted exercise of the decanting power is ineffective because the exercise:</text> <level label="i"> <text>Did not comply with the provisions of this subtitle;</text> </level> <level label="ii"> <text>Was an abuse of discretion; or</text> </level> <level label="iii"> <text>Was a breach of fiduciary duty; or</text> </level> </level> <level label="2"> <text>§ 14–619 of this subtitle applies to the exercise of the decanting power.</text> </level> </level> <level label="f"> <text>An exercise of the decanting power is not ineffective because an authorized fiduciary failed to give notice as required by subsection (b) of this section if the authorized fiduciary acted with reasonable care to comply with the requirements of this section.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-606" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>On application of an authorized fiduciary or a person entitled to receive notice under § 14–605 of this subtitle, a court may:</text> <level label="1"> <text>Determine whether a proposed or attempted exercise of the decanting power is allowed under this subtitle and consistent with the fiduciary duties of the authorized fiduciary;</text> </level> <level label="2"> <text>Appoint a special fiduciary and authorize the special fiduciary to determine whether the decanting power should be exercised and to exercise the decanting power;</text> </level> <level label="3"> <text>Approve the exercise of the decanting power;</text> </level> <level label="4"> <text>Determine that the proposed or attempted exercise of the decanting power is ineffective:</text> <level label="i"> <text>Due to a failure to comply with the provisions of this subtitle;</text> </level> <level label="ii"> <text>As an abuse of the authorized fiduciary’s discretion; or</text> </level> <level label="iii"> <text>As a breach of the authorized fiduciary’s fiduciary duties;</text> </level> </level> <level label="5"> <text>Determine the extent to which § 14–619 of this subtitle applies to a prior exercise of the decanting power;</text> </level> <level label="6"> <text>Determine the application of § 14–619 of this subtitle to a prior exercise of the decanting power; or</text> </level> <level label="7"> <text>Order other relief to carry out the purposes of this title.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-607" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>Any exercise of the decanting power shall be made in a record signed by an authorized fiduciary.</text> </level> <level label="b"> <level label="1"> <text>The record required by this subsection shall identify:</text> <level label="i"> <text>The first trust;</text> </level> <level label="ii"> <text>Any second trust;</text> </level> <level label="iii"> <text>Any property being distributed to a second trust; and</text> </level> <level label="iv"> <text>Any property remaining in the first trust.</text> </level> </level> <level label="2"> <text>The record required by this subsection may include information by reference to the notice required by § 14–605 of this subtitle.</text> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-608" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <level label="i"> <text>“Noncontingent right” means a right that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur.</text> </level> <level label="ii"> <text>“Noncontingent right” does not include a right held by a beneficiary if any other person has discretion to distribute property subject to the right to any person other than the beneficiary or the beneficiary’s estate.</text> </level> </level> <level label="3"> <text>“Presumptive remainder beneficiary” means a qualified beneficiary other than a current beneficiary.</text> </level> <level label="4"> <level label="i"> <text>“Successor beneficiary” means a beneficiary that is not a qualified beneficiary on the date that the beneficiary’s qualification is determined.</text> </level> <level label="ii"> <text>“Successor beneficiary” does not include a person that is a beneficiary solely because the person holds a nongeneral power of appointment.</text> </level> </level> <level label="5"> <text>“Vested interest” means:</text> <level label="i"> <text>A right to a mandatory distribution that is a noncontingent right as of the date of the exercise of the decanting power;</text> </level> <level label="ii"> <text>A current and noncontingent right, at least annually, to a mandatory distribution of income, a specified dollar amount, or a percentage value of some or all of the trust property;</text> </level> <level label="iii"> <text>A current and noncontingent right, at least annually, to withdraw income, a specified dollar amount, or a percentage value of some or all of the trust property;</text> </level> <level label="iv"> <text>A presently exercisable general power of appointment; or</text> </level> <level label="v"> <text>A right to receive an ascertainable part of trust property on termination of the trust that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur.</text> </level> </level> </level> <level label="b"> <text>Except as otherwise provided in § 14–610 of this subtitle, an authorized fiduciary that has expanded distributive discretion over the principal of a first trust for the benefit of one or more current beneficiaries may exercise the decanting power over the principal of the first trust.</text> </level> <level label="c"> <text>Except as otherwise provided in § 14–610 of this subtitle, in exercising the decanting power, a second trust may not:</text> <level label="1"> <text>Except as provided in subsection (d) of this section, include as a current beneficiary a person that is not a current beneficiary of the first trust;</text> </level> <level label="2"> <text>Except as provided in subsection (d) of this section, include as a presumptive remainder beneficiary or successor beneficiary a person that is not a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the first trust; or</text> </level> <level label="3"> <text>Reduce or eliminate a vested interest.</text> </level> </level> <level label="d"> <text>Subject to subsection (c)(3) of this section and § 14–611 of this subtitle, in the exercise of the decanting power under this section, one or more second trusts may be created or administered under the law of any jurisdiction and may:</text> <level label="1"> <text>Retain a power of appointment granted in the first trust;</text> </level> <level label="2"> <text>Omit a power of appointment granted in the first trust, other than a presently exercisable general power of appointment;</text> </level> <level label="3"> <text>Create or modify a power of appointment if the powerholder is a current beneficiary of the first trust and the authorized fiduciary has expanded distributive discretion to distribute principal to that beneficiary; or</text> </level> <level label="4"> <text>Create or modify a power of appointment if the powerholder is a presumptive remainder beneficiary or successor beneficiary of the first trust and the exercise of the power may take effect only after the powerholder becomes, or would have become if then living, a current beneficiary.</text> </level> </level> <level label="e"> <level label="1"> <text>A power of appointment described in subsection (d) of this section may be general or nongeneral.</text> </level> <level label="2"> <text>The class of permissible appointees in favor of which a power of appointment described in subsection (d) of this section may be exercised may be broader than or different from the beneficiaries of the first trust.</text> </level> </level> <level label="f"> <text>If an authorized fiduciary has expanded distributive discretion over part but not all of the principal of a first trust, the authorized fiduciary may exercise the decanting power under this section only over the part of the principal over which the authorized fiduciary has expanded distributive discretion.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-609" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Deferred distribution” means a provision in a second trust that defers or postpones, as compared with the first trust, a contingent right of a beneficiary to receive an outright distribution of assets on the attainment of a certain age or the occurrence of a specified event.</text> </level> <level label="3"> <text>“Limited distributive discretion” means a discretionary power of distribution that is limited to an ascertainable standard or a reasonably definite standard.</text> </level> </level> <level label="b"> <text>An authorized fiduciary who has limited distributive discretion over the principal of a first trust may exercise the decanting power over the principal of the first trust.</text> </level> <level label="c"> <level label="1"> <text>Subject to § 14–611 of this subtitle, one or more second trusts may be created or administered under the law of any jurisdiction.</text> </level> <level label="2"> <text>The second trusts, in the aggregate, shall grant each beneficiary of the first trust beneficial interests that are substantially similar to the beneficiary’s beneficial interests under the first trust.</text> </level> <level label="3"> <text>Notwithstanding paragraph (2) of this subsection, a second trust may:</text> <level label="i"> <text>Include a deferred distribution, if the second trust provides that:</text> <level label="1"> <text>During the lifetime of the beneficiary, no portion of the income or principal attributable to the deferred distribution may be distributed to, or for the benefit of, any person other than the beneficiary; and</text> </level> <level label="2"> <level label="A"> <text>The beneficiary shall have a testamentary qualified power of appointment exercisable in favor of the beneficiary’s estate over the deferred distribution; or</text> </level> </level> <level label="B"> <text>The deferred distribution shall be payable to the beneficiary’s estate if the second trust does not terminate during the beneficiary’s lifetime;</text> </level> </level> <level label="ii"> <text>Expand a power of appointment existing in the first trust to include as permissible appointees the creditors of the powerholder’s estate; or</text> </level> <level label="iii"> <text>Narrow a power of appointment existing in the first trust that is not presently exercisable to remove as permissible appointees any of the following:</text> <level label="1"> <text>The powerholder;</text> </level> <level label="2"> <text>The powerholder’s estate;</text> </level> <level label="3"> <text>The creditors of the powerholder; or</text> </level> <level label="4"> <text>The creditors of the powerholder’s estate.</text> </level> </level> </level> </level> <level label="d"> <level label="1"> <text>A power to make a distribution under a second trust for the benefit of a beneficiary who is an individual is substantially similar to a power under the first trust to make a distribution directly to the beneficiary.</text> </level> <level label="2"> <text>A distribution is for the benefit of the beneficiary if:</text> <level label="i"> <text>The distribution is applied for the benefit of the beneficiary;</text> </level> <level label="ii"> <level label="1"> <text>The beneficiary is under a legal disability or the trustee reasonably believes the beneficiary is incapacitated; and</text> </level> <level label="2"> <text>The distribution is made as allowed by this title; or</text> </level> </level> <level label="iii"> <text>The distribution is made as allowed under the terms of the first trust instrument and the second trust instrument for the benefit of the beneficiary.</text> </level> </level> </level> <level label="e"> <text>If an authorized fiduciary has limited distributive discretion over part of but not all of the principal of a first trust, the authorized fiduciary may exercise the decanting power under this section only over the part of the principal over which the authorized fiduciary has limited distributive discretion.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-610" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Beneficiary with a disability” means a beneficiary of a first trust who the special needs fiduciary reasonably believes qualifies for governmental benefits based on disability, whether or not the beneficiary currently receives governmental benefits or has been adjudicated incapacitated.</text> </level> <level label="3"> <text>“Governmental benefits” means financial aid or services from a State, federal, or other public agency.</text> </level> <level label="4"> <text>“Special needs fiduciary” means, with respect to a trust that has a beneficiary with a disability:</text> <level label="i"> <text>A trustee or other fiduciary, other than a settlor, that has discretion to distribute part or all of the principal of a first trust to one or more current beneficiaries;</text> </level> <level label="ii"> <text>If no trustee or fiduciary has discretion under item (i) of this paragraph, a trustee or other fiduciary, other than a settlor, that has discretion to distribute part or all of the income of the first trust to one or more current beneficiaries; or</text> </level> <level label="iii"> <text>If no trustee or fiduciary has discretion under item (i) or (ii) of this paragraph, a trustee or other fiduciary, other than a settlor, that is required to distribute part or all of the income or principal of the first trust to one or more current beneficiaries.</text> </level> </level> <level label="5"> <text>“Special needs trust” means a trust that the trustee reasonably believes would not be considered a resource for the purpose of determining whether a beneficiary with a disability is eligible for governmental benefits.</text> </level> </level> <level label="b"> <text>A special needs fiduciary may exercise the decanting power over the principal of a first trust as if the fiduciary had authority to distribute principal to a beneficiary with a disability subject to expanded distributed discretion, if:</text> <level label="1"> <text>A second trust is a special needs trust that benefits the beneficiary with a disability; and</text> </level> <level label="2"> <text>The special needs fiduciary determines that the exercise of the decanting power will further purposes of the first trust.</text> </level> </level> <level label="c"> <text>Notwithstanding any provision to the contrary, in an exercise of the decanting power under this section:</text> <level label="1"> <text>The interest in a second trust of a beneficiary with a disability may, but is not required to:</text> <level label="i"> <text>Be a pooled trust, as defined in Title 42 of the United States Code, for a beneficiary with a disability; or</text> </level> <level label="ii"> <text>Contain payback provisions complying with the requirements for reimbursement in Title 42 of the United States Code;</text> </level> </level> <level label="2"> <text>A second trust may reduce or eliminate a vested interest of a beneficiary with a disability; and</text> </level> <level label="3"> <text>Except as affected by any change to the interests of the beneficiary with a disability, a second trust, or second trusts in the aggregate, shall grant each other beneficiary of the first trust beneficial interests in the second trusts that are substantially similar to the beneficiary’s beneficial interests in the first trust.</text> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-611" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Determinable charitable interest” means a charitable interest that is a right to a mandatory distribution currently, periodically, on the occurrence of a specified event, or after passage of a specified time and that is unconditional or will be held solely for charitable purposes.</text> </level> <level label="3"> <text>“Unconditional” means not subject to the occurrence of a specified event that is not certain to occur, other than a requirement that a charitable organization be in existence or qualify under a particular provision of Title 26 of the United States Code on the date of the distribution, if the charitable organization meets the requirement on the date of determination.</text> </level> </level> <level label="b"> <level label="1"> <text>If a first trust contains a determinable charitable interest, the Attorney General has the rights of a qualified beneficiary and may represent and bind the charitable interest.</text> </level> <level label="2"> <text>If a first trust contains a charitable interest, a second trust may not:</text> <level label="i"> <text>Diminish the charitable interest;</text> </level> <level label="ii"> <text>Diminish the interest of an identified charitable organization that holds the charitable interest;</text> </level> <level label="iii"> <text>Alter any charitable purpose stated in the first trust instrument; or</text> </level> <level label="iv"> <text>Alter any condition or restriction related to the charitable interest.</text> </level> </level> <level label="3"> <text>If a first trust contains a determinable charitable interest, the second trust shall be administered under the law of this State, unless:</text> <level label="i"> <text>The Attorney General, after receiving notice of the exercise of the decanting power, does not object within 60 days after receiving the notice;</text> </level> <level label="ii"> <text>The Attorney General consents in a signed record to the second trust being administered under the law of another jurisdiction; or</text> </level> <level label="iii"> <text>A court approves the exercise of the decanting power.</text> </level> </level> </level> <level label="c"> <text>If there are two or more second trusts, the second trusts shall be treated as one trust for purposes of determining whether the exercise of the decanting power diminishes the charitable interest or diminishes the interest of an identified charitable organization for purposes of subsection (b) of this section.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-612" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>An authorized fiduciary may not exercise the decanting power to the extent that the first trust instrument expressly prohibits exercise of:</text> <level label="1"> <text>The decanting power; or</text> </level> <level label="2"> <text>A power granted by State law to the fiduciary to distribute all or part of the trust to another trust or to modify the trust.</text> </level> </level> <level label="b"> <text>Exercise of the decanting power is subject to any restriction in the first trust instrument that expressly applies to exercise of:</text> <level label="1"> <text>The decanting power; or</text> </level> <level label="2"> <text>A power granted by State law to the fiduciary to distribute all or part of the trust to another trust or to modify the trust.</text> </level> </level> <level label="c"> <text>Exercise of the decanting power is not prohibited by:</text> <level label="1"> <text>A general prohibition of the amendment or revocation of a first trust;</text> </level> <level label="2"> <text>A spendthrift clause; or</text> </level> <level label="3"> <text>A clause restraining the voluntary or involuntary transfer of a beneficiary’s interest.</text> </level> </level> <level label="d"> <text>Subject to subsections (a) and (b) of this section, an authorized fiduciary may exercise the decanting power even if the first trust instrument allows the authorized fiduciary or another person to modify the first trust instrument or to distribute part or all of the principal of the first trust to another trust.</text> </level> <level label="e"> <text>If a first trust instrument contains an express prohibition or restriction described in subsection (a) or (b) of this section, the same prohibition or restriction shall be included in any second trust instrument.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-613" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>An authorized fiduciary may not exercise the decanting power to increase the authorized fiduciary’s compensation, unless:</text> <level label="1"> <text>All qualified beneficiaries of the second trust consent to the increase in a signed record;</text> </level> <level label="2"> <text>A court approves the increase; or</text> </level> <level label="3"> <text>The increase is incidental to other changes made by the exercise of the decanting power.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-614" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>Except as otherwise provided in this section, a second trust instrument may not:</text> <level label="1"> <text>Relieve an authorized fiduciary from liability for breach of trust to a greater extent than a first trust instrument; or</text> </level> <level label="2"> <text>Reduce fiduciary liability in the aggregate.</text> </level> </level> <level label="b"> <text>A second trust instrument may provide for indemnification of an authorized fiduciary of the first trust or another person acting as a fiduciary of the first trust for any liability or claim that would have been payable from the first trust if the decanting power had not been exercised.</text> </level> <level label="c"> <text>Subject to subsection (a)(2) of this section, a second trust instrument may divide and reallocate fiduciary powers among fiduciaries, including one or more trustees, distribution advisors, investment advisors, trust protectors, or other persons, and relieve a fiduciary from liability for an act or failure to act of another fiduciary as allowed by the law of this State other than this title.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-615" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>An authorized fiduciary may not exercise the decanting power to modify a provision in a first trust instrument granting another person the power to remove or replace the authorized fiduciary unless:</text> <level label="1"> <text>If the modification applies only to the person, the person holding the power consents to the modification in a signed record;</text> </level> <level label="2"> <text>The person holding the power and the qualified beneficiaries of the second trust consent to the modification in a signed record and the modification grants a substantially similar power to another person; or</text> </level> <level label="3"> <text>A court approves the modification and the modification grants a substantially similar power to another person.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-616" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Grantor trust” means a trust as to which a settlor of a first trust is considered the owner under 26 U.S.C. §§ 671 through 677 or § 679.</text> </level> <level label="3"> <text>“Internal Revenue Code” means Title 26 of the United States Code.</text> </level> <level label="4"> <text>“Nongrantor trust” means a trust that is not a grantor trust.</text> </level> <level label="5"> <text>“Qualified benefits property” means property subject to the minimum distribution requirements of 26 U.S.C. § 401(a)(9), any applicable regulations, or similar requirements.</text> </level> <level label="6"> <level label="i"> <text>“Tax benefit” means a federal or State tax deduction, exemption, exclusion, or other benefit.</text> </level> <level label="ii"> <text>“Tax benefit” does not include a benefit arising from being a grantor trust.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>If the first trust contains property that qualified, or would have qualified but for any provision of this subtitle other than this section, for a marital deduction for purposes of the gift tax or estate tax under the Internal Revenue Code or a State gift, estate, or inheritance tax, the second trust instrument may not include or omit any term that, if included in or omitted from the trust instrument for the trust to which property was transferred, would have prevented the transfer from qualifying for the deduction or would have reduced the amount of the deduction under the provisions of the Internal Revenue Code or State law under which the transfer qualified.</text> </level> <level label="2"> <text>If the first trust contains property that qualified, or would have qualified but for any provision of this subtitle other than this section, for a charitable deduction for purposes of the income, gift, or estate tax under the Internal Revenue Code or a State income, gift, estate, or inheritance tax, the second trust instrument may not include or omit any term that, if included in or omitted from the trust instrument for the trust to which the property was transferred, would have prevented the transfer from qualifying for the deduction or would have reduced the amount of the deduction under the same provisions of the Internal Revenue Code or State law under which the transfer qualified.</text> </level> <level label="3"> <level label="i"> <text>If the first trust contains property that qualified, or would have qualified but for any provision of this subtitle other than this section, for the exclusion from the gift tax described in 26 U.S.C. § 2503(b), the second trust instrument may not include or omit a term that, if included or omitted from the trust instrument for the trust to which the property was transferred, would have prevented the transfer from qualifying under 26 U.S.C. § 2503(b).</text> </level> <level label="ii"> <text>If the first trust contains property that qualified, or would have qualified but for any provision of this subtitle other than this section, for the exclusion from the gift tax described in 26 U.S.C. § 2503(b) by application of 26 U.S.C. § 2503(c), the second trust instrument may not include or omit a term that, if included or omitted from the trust instrument for the trust to which the property was transferred, would have prevented the transfer from qualifying under 26 U.S.C. § 2503(c).</text> </level> </level> <level label="4"> <level label="i"> <text>If the property of the first trust includes shares of stock in an S corporation, as defined in the Internal Revenue Code, and the first trust is, or would be but for any provision of this subtitle other than this section, a permitted shareholder under any provision of 26 U.S.C. § 1361, an authorized fiduciary may exercise the decanting power with respect to part or all of the S corporation stock only if any second trust receiving the stock is a permitted shareholder under 26 U.S.C. § 1361(c)(2).</text> </level> <level label="ii"> <text>If the property of the first trust includes shares of stock in an S corporation, as defined in the Internal Revenue Code, and the first trust is, or would be but for any provision of this subtitle other than this section, a qualified subchapter S trust within the meaning of 26 U.S.C. § 1361(d), the second trust instrument may not include or omit a term that prevents the second trust from qualifying as a qualified subchapter S trust.</text> </level> </level> <level label="5"> <text>If the first trust contains property that qualified, or would have qualified but for any provision of this subtitle other than this section, for a zero inclusion ratio for purposes of the generation–skipping transfer tax under 26 U.S.C. § 2642(c), the second trust instrument may not include or omit a term that, if included or omitted from the first trust instrument, would have prevented the transfer to the first trust from qualifying for a zero inclusion ratio under 26 U.S.C. § 2642(c).</text> </level> <level label="6"> <level label="i"> <text>If the first trust is directly or indirectly the beneficiary of qualified benefits property, the second trust instrument may not include or omit any term that, if included in or omitted from the first trust instrument, would have increased the minimum distributions required with respect to the qualified benefits property under 26 U.S.C. § 401(a)(9) and any applicable regulation or similar requirements.</text> </level> <level label="ii"> <text>If an attempted exercise of the decanting power violates this paragraph:</text> <level label="1"> <text>The trustee is deemed to have held the qualified benefits property and any reinvested distributions of the property as a separate share from the date of the exercise of the decanting power; and</text> </level> <level label="2"> <text>§ 14–619 of this subtitle applies to the separate share.</text> </level> </level> </level> <level label="7"> <text>If the first trust qualifies as a grantor trust because of the application of 26 U.S.C. § 672(f)(2)(A), the second trust may not include or omit a term that, if included or omitted from the first trust instrument, would have prevented the first trust from qualifying under 26 U.S.C. § 672(f)(2)(A).</text> </level> <level label="8"> <text>Subject to paragraph (9) of this subsection, a second trust instrument may not include or omit a term that, if included or omitted from the first trust instrument, would have prevented qualification for a tax benefit if:</text> <level label="i"> <level label="1"> <text>The first trust instrument expressly indicates an intent to qualify for the benefit; or</text> </level> <level label="2"> <text>The first trust instrument is clearly designed to enable the first trust to qualify for the benefit; and</text> </level> </level> <level label="ii"> <text>The transfer of property held by the first trust or the first trust qualified, or would have qualified but for any provision of this subtitle other than this section, for the tax benefit.</text> </level> </level> <level label="9"> <text>Except as otherwise provided in this subsection, the second trust may be a nongrantor trust or a grantor trust.</text> </level> <level label="10"> <text>An authorized fiduciary may not exercise the decanting power if a settlor objects in a signed record delivered within the notice period to the fiduciary and:</text> <level label="i"> <level label="1"> <text>The first trust and a second trust are both grantor trusts, in whole or in part;</text> </level> <level label="2"> <text>The first trust grants the settlor or another person the power to cause the first trust to cease to be a grantor trust; and</text> </level> <level label="3"> <text>The second trust does not grant an equivalent power to the settlor or other person; or</text> </level> </level> <level label="ii"> <text>The first trust is a nongrantor trust and a second trust is a grantor trust, in whole or in part, with respect to the settlor, unless:</text> <level label="1"> <text>The settlor has the power at all times to cause the second trust to cease to be a grantor trust; or</text> </level> <level label="2"> <level label="A"> <text>The first trust instrument contains a provision granting the settlor or another person a power that would cause the first trust to cease to be a grantor trust; and</text> </level> </level> <level label="B"> <text>The second trust instrument contains the same provision.</text> </level> </level> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-617" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>Subject to subsection (b) of this section, a second trust may have a duration that is the same as or different from the duration of the first trust.</text> </level> <level label="b"> <text>To the extent that the property of a second trust is attributable to property of a first trust, the property of the second trust is subject to any rules governing maximum perpetuity, accumulation, or suspension of the power of alienation that apply to the property of the first trust.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-618" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>An authorized fiduciary may exercise the decanting power whether or not under the first trust’s discretionary distribution standard the fiduciary would have made or could have been compelled to make a discretionary distribution of principal at the time of the exercise.</text> </section> <section article="get" article_name="Estates and Trusts" number="14-619" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>If an exercise of the decanting power violates the provisions of this subtitle solely because a second trust instrument in part does not comply with the requirements of this subtitle, the exercise is effective.</text> </level> <level label="b"> <text>If an exercise of the decanting power is effective notwithstanding a failure to meet any requirement of this subtitle in accordance with subsection (a) of this section, with respect to the principal of the second trust attributable to the exercise of the power:</text> <level label="1"> <text>Any provision in the second trust instrument prohibited by this subtitle is void to the extent necessary to comply with this subtitle; and</text> </level> <level label="2"> <text>The second trust instrument shall be treated as containing any provision which is required by this subtitle but not included in the instrument.</text> </level> </level> <level label="c"> <text>If a trustee or other fiduciary of a second trust determines that an exercise of the decanting power is effective notwithstanding a failure to meet any requirement of this subtitle under subsection (a) of this section, that fiduciary shall take corrective action.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-620" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>The decanting power may be exercised for a trust established under § 14.5–407 of this article to the same extent that the decanting power could be exercised if each animal benefitting from the trust were a person.</text> </level> <level label="b"> <text>Notwithstanding any other provision of this title, in an exercise of the decanting power under this section, the second trust must provide that trust property may be applied only to its intended purpose for the period the first trust benefitted the animal.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-621" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>A reference in Title 14.5 of this article to a trust instrument or terms of a trust includes a second trust instrument and the terms of a second trust.</text> </section> <section article="get" article_name="Estates and Trusts" number="14-622" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>A settlor of a first trust is deemed to be the settlor of the second trust with respect to any portion of the principal of the first trust subject to the exercise of the decanting power.</text> </level> <level label="b"> <text>In determining settlor intent with respect to a second trust, a court may consider the intent of:</text> <level label="1"> <text>A settlor of the first trust;</text> </level> <level label="2"> <text>A settlor of the second trust; and</text> </level> <level label="3"> <text>An authorized fiduciary.</text> </level> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-623" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <level label="a"> <text>Except as provided in subsection (c) of this section, if an exercise of the decanting power was intended to distribute all the principal of the first trust to one or more second trusts, later–discovered property belonging to the first trust and property paid to or acquired by the first trust after the exercise of the decanting power is part of the trust estate of the second trust or trusts.</text> </level> <level label="b"> <text>Except as provided in subsection (c) of this section, if an exercise of the decanting power was intended to distribute less than all of the principal of the first trust to one or more second trusts, later–discovered property belonging to the first trust or property paid to or acquired by the first trust after the exercise of the decanting power remains part of the trust estate of the first trust.</text> </level> <level label="c"> <text>An authorized fiduciary may provide in an exercise of the decanting power or the terms of a second trust instrument for the disposition of later–discovered property belonging to the first trust or property paid to or acquired by the first trust after the exercise of the decanting power.</text> </level> </section> <section article="get" article_name="Estates and Trusts" number="14-624" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>A debt, liability, or other obligation enforceable against property of a first trust is enforceable to the same extent against the property when held by a second trust after the exercise of the decanting power.</text> </section> <section article="get" article_name="Estates and Trusts" number="14-625" title_number="14" title_name="Trusts" subtitle_number="6" subtitle_name="Maryland Trust Decanting Act"> <text>This subtitle may be cited as the Maryland Trust Decanting Act.</text> </section>