In this subtitle the following words have the meanings indicated. “Adult” means an individual who is at least 18 years of age. “Beneficiary” means an individual for whose present benefit property is held by a trustee in accordance with this subtitle. “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. “Court” means the circuit courts of the State of Maryland. “Declarant” means a transferor who creates a trust under this subtitle and serves as the trustee. “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. “Legal representative” means a personal representative, conservator, or an attorney in fact under a durable power of attorney. “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. “Person” means an adult, corporation, organization, or any other legal entity. “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. “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. “Transferor” means a person who creates a trust by transfer or declaration under this subtitle. “Transferor” does not include a person, other than the person who created the trust, who augments an existing trust. “Trust” means a trust created under this subtitle. “Trust” does not include a trust created by the transferor for the benefit of the transferor. “Trust property” means any property, income, or proceeds resulting from the investment of property held in trust under this subtitle. “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.

The trustee holds title to the trust property. Trust property may not be considered property or an available resource of the beneficiary. The beneficiary may not have any interest in trust property that can be assigned or attached. No part of the trust property may be subject to claims for costs of care provided to the beneficiary by a state. The trustee has sole discretion over trust property expenditures. 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. 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. A trustee may retain any trust property received from a transferor. A person dealing with a transferor, declarant, or trustee is protected in those dealings in accordance with § 14-405 of this subtitle. Any person except the beneficiary may augment trust property. When establishing a trust, the transferor may designate the trust to be either revocable or irrevocable. If no designation is made, the trust is revocable.

Any person having the right to transfer property to another person may create a trust as a transferor under this subtitle. The transferor may: As declarant serve as trustee; Designate a trustee; Designate how the trustee will be chosen; Designate successor trustees in the order in which they will serve; and Designate how successor trustees will be chosen. The trustee shall hold, manage, expend, and transfer trust property as provided in this subtitle. The successor trustee shall assume the responsibilities of the trustee when the trustee is no longer willing or able to serve. A trust may have only one beneficiary but more than one trustee. A trustee: Is not personally liable to a third person: 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 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; 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 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. The next willing successor trustee in line shall accept the records and trust property and become trustee as soon as practicable after: The resignation of the trustee; The declination of the trustee; The death of the trustee; or The removal of the trustee. 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: The transferor or the legal representative of the transferor; The trustee; The beneficiary or the beneficiary’s legal representative; The guardian of the person of the beneficiary; An adult member of the beneficiary’s family or that family member’s legal representative; or 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. Unless renounced by the transferor, the transferor may at any time remove or change the designation of the trustee and successor trustees.

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: Identifies the recipient of the property as the trustee; Identifies the beneficiary of the trust; and Identifies the property as being transferred under the Maryland Discretionary Trust Act. A person may create a trust by written declaration if the written declaration is executed in a legally recognized manner and: Identifies the property to be held in trust; Identifies the beneficiary of the trust; Identifies the declarant as trustee and title holder; and Identifies the property as being held in trust under the Maryland Discretionary Trust Act. A person having the right to transfer property upon a future event may create a trust upon the occurrence of the future event by: Designating: The event; The property; The beneficiary; and The trustee or mechanism for selecting the trustee; and Creating the trust by: 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 Registering the designation with or delivering it to the fiduciary, payor, issuer, or obligor of the future right. 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.” The obligations of a trustee begin when the trustee accepts the trust property by writing in substance the following words: “Trustee’s Receipt and Acceptance 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). Dated: _______________ _____________________________ (Signature of Trustee)” A trust may be created by specifying that property is to be held in trust under the Maryland Discretionary Trust Act. 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. 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. A registration, declaration, or transfer made under an act of another state substantially similar to this subtitle: Is governed by the law of that state; and May be enforced in this State. This subtitle may not limit other means of declaring trusts or transferring property in trust. A trust, the terms of which do not conform to this subtitle, may be enforceable according to its terms.

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. A trustee shall: Take control of trust property; Register or record title to trust property if appropriate; and Collect, hold, manage, invest, and reinvest trust property. 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. 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. 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. Trust property consisting of an undivided interest is so identified if the trustee’s interest is held as a tenant in common. 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. 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. 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. At any time, the transferor may require the trustee to furnish bond. The trustee shall maintain complete records of all trust property and all trust transactions. The following persons in the order listed may request an accounting of trust property and transactions: The transferor or the transferor’s legal representative; The beneficiary or the beneficiary’s legal representative; The guardian of the person of the beneficiary; An adult member of the beneficiary’s family or that family member’s legal representative; or 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. 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. 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. The trustee may petition the court for approval of final accounts. Upon removal of a trustee by a court, the court shall require: An accounting of trust property; The delivery of the trust property and records to the successor trustee; and The execution of all instruments required for transfer of the trust property. 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: Issue instructions to the trustee; Review the propriety of the acts of a trustee; and Review the reasonableness of the trustee’s compensation or the compensation of other persons. A successor trustee may not be held liable for the acts or omissions of any predecessor trustee. Except as otherwise provided in the registration, declaration, or other instrument of transfer creating the trust, or by court order, a trustee: Is entitled to reimbursement from trust property for reasonable expenses incurred in the performance of fiduciary services; and 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.

The trust shall terminate upon the first to occur of: The death of the beneficiary; A date or event specified in the trust document; or 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. Upon termination of a trust, the trustee shall transfer the unexpended trust property: As designated in the instrument creating the trust; or If there is no designation, in the following order: To the transferor, if living; 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 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. The powers and duties of the trustee shall continue until the final and complete distribution of the trust property is made.

The following form may be used to create a trust by transfer: “Transfer Under the Maryland Discretionary Trust Act .    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. The�trustee�shall�be�________________________________________ (name one or more). 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): ________________________________________________________ ________________________________________________________ ________________________________________________________ The beneficiary shall be ______________________________________________ (name one only) The trust property shall be: ______________________________________________________________ ______________________________________________________________ The trust shall terminate upon the first to occur of (check those applicable): ________ the death of the beneficiary ________ the following date: _____________________________________ ________ the following event: ____________________________________ Upon termination, the remaining trust property shall be distributed to ___________________________________________________________________ (name person or persons) Revocability (check one): ________ The transferor may revoke this trust. ________ The transferor may not revoke this trust. Signature of transferor __________________________________________________ Date of execution _______________________________________________________ Signature of witness ____________________________________________________ Date: ____________________________________________________________ Name of attorney preparing this statement of transfer: __________________________________________________________________ State of Maryland, __________________________ : ss 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. Witness my hand and Notarial Seal. _________________________________ Notary Public My commission expires: _______________.” The following form may be used to create a trust by declaration: “Declaration of Trust Under the Maryland Discretionary Trust Act 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. At any time when I am unable to serve as trustee, the trustee shall be: _____________________________________________________________________________ (name one or more) 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): _________________________________________________________ ________________________________________________________ _______________________________________________________ The beneficiary shall be _____________________________________________ The trust property shall be: ______________________________________________________________ ______________________________________________________________ The trust shall terminate upon the first to occur of (check those applicable): ________ The death of the beneficiary ________ The following date: ____________________________________ ________ The following event: ___________________________________ __________________________________________________________________ Upon termination, the remaining trust property shall be distributed to ________________________________________________________________________ (name person or persons) Revocability (check one): _______ The declarant may revoke this trust _______ The declarant may not revoke this trust Signature of declarant ________________________________________________ Date of execution _____________________________________________________ Signature of witness __________________________________________________ Date _________________________________________________________________ Name of attorney preparing this declaration: __________________________________________________________ State of Maryland, __________________________ : ss 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. Witness my hand and Notarial Seal. _________________________________ Notary Public My commission expires: ____________.”

This subtitle may be cited as the “Maryland Discretionary Trust Act”.