In this subtitle the following words have the meanings indicated. “Committee” includes any reorganization or protective committee formed for the purpose of formulating, proposing, or carrying out any plan of reorganization or to act in any other manner for the protection of the interests of the holders of any class or classes of securities, or persons performing a similar function, and any corporation formed or acting for any such purpose. “Corporate fiduciary” has the meaning stated in § 15–1A–01 of this title. “Depositary” includes any person receiving securities for deposit, exchange, or distribution under any reorganization agreement or plan of reorganization, or stamping securities presented to it to indicate the assent of any present or future holder or holders to any plan of reorganization affecting the securities or that the securities have been absolutely or conditionally made subject to any plan of reorganization. “Deposited or exchanged”, as applied to securities, includes the presentation of securities to a depositary for stamping to indicate the assent of any present or future holder to any plan of reorganization affecting the securities or that the securities have been absolutely or conditionally made subject to any plan or organization. “Environmental law” means a federal, State, or local law, rule, regulation, or ordinance that relates to the protection of the environment. “Environmental law” includes Title 16 of the Environment Article. “Fiduciary” includes a trustee acting under a deed, will, declaration of trust or other instrument in the nature of a trust or appointed by a court, a receiver, custodian, committee or guardian of the property of a minor or disabled person, executor, administrator, or personal representative. “Person” includes the State, any county, municipal corporation, or other political subdivision of the State, or any of their units, or an individual, fiduciary, or any partnership, firm, association, public or private corporation, or any other entity. “Plan of reorganization” includes any plan for the reorganization of any corporation, public or private, or of any partnership, firm or association, and any plan of adjustment, readjustment, refunding, refinancing, or recapitalization affecting any securities, whether or not the plan is proposed or submitted in connection with any proceedings under the jurisdiction of any court. “Reorganization agreement” includes any deposit agreement, protective agreement for the protection of holders of any class of securities, or similar agreement or instrument which embodies any plan of reorganization or provides for or permits the formulation or carrying out of a plan of reorganization. “Securities” includes stocks, bonds, debentures, notes, voting trust certificates, equipment trust certificates, certificates of deposit, certificates of participation, certificates of beneficial interest, stock rights, stock warrants issued by or in connection with any corporation, partnership, firm, association or similar organization, and any other instruments evidencing rights of a similar character. “Trust company” has the meaning stated in § 1–101 of this article.

In this section the following words have the meanings indicated. “Beneficiary” means an ascertainable person who has a present or future interest in a trust estate. “Beneficiary” includes: If the beneficiary is a minor, the beneficiary’s natural or legal guardian; or If the beneficiary is a disabled person, as defined in § 13–101 of this article, any person acting on behalf of the beneficiary under a guardianship, conservatorship, or committee. “Fiduciary” means a trustee: Acting under a deed, will, or declaration of trust or other instrument in the nature of a trust, whether the trust or estate is created before or after the effective date of this subtitle; or Appointed by a court or a committee or guardian of the property of a minor or a disabled person, whether the appointment is made before or after the effective date of this subtitle. “Fiduciary” does not include a receiver, trustee of a trust for the benefit of creditors, executor, administrator, or personal representative. A fiduciary may perform the functions and duties enumerated in this section without application to, approval of, or ratification by a court. Except as expressly limited in the governing instrument, the powers of a fiduciary under this section are in addition to those derived from common law, statute, or the governing instrument. The powers listed in this section may be extended or limited by the appropriate court, and the court may also eliminate any limitation imposed by a court on a fiduciary. A fiduciary may invest in, sell, mortgage, exchange, or lease any property, real or personal. A fiduciary may borrow money for the purpose of protecting property and pledge property as security for the loan. A fiduciary may effect a fair and reasonable compromise with any debtor, obligor, creditor or obligee, or extend or renew any obligation by or to the fiduciary estate. A fiduciary may retain assets owned by the minor or disabled person, in the case of a guardian, or owned by the decedent or the grantor, in the case of a trustee or otherwise coming into the hands of the fiduciary pending distribution or liquidation, including those in which the fiduciary is personally interested or which are otherwise improper for trust investment. A fiduciary may receive assets from any sources, including other fiduciaries. A fiduciary may perform the contracts of the decedent or disabled person that continue as obligations of the fiduciary estate. In performing an enforceable contract to convey or lease land the fiduciary may execute and deliver a deed or conveyance for cash payment of all sums remaining due, or for the note of the purchaser for the sum remaining due secured by a mortgage or deed of trust on the land, as the contract may provide. A fiduciary may satisfy written charitable pledges of the disabled person or decedent. A fiduciary may deposit funds for the account of the fiduciary estate in checking accounts, in insured interest–bearing accounts, or in short–term loan arrangements. A fiduciary may vote securities in person or by general or limited proxy, or enter into or participate in a voting trust or agreement of shareholder. A fiduciary may insure the property of the fiduciary estate against damage, loss and liability, and himself or herself, as fiduciary against liability in respect to third persons. A fiduciary may pay taxes, assessments and other expenses incident to the administration of the fiduciary estate. A fiduciary may sell or exercise stock subscription, conversion or option rights, consent to or oppose, directly or through a committee or other agent, the reorganization, consolidation, merger, dissolution or liquidation of a corporation or other business enterprises. A fiduciary may employ for reasonable compensation agents, attorneys, auditors, investment advisors or other persons with special skills, to advise or assist the fiduciary in the performance of the administrative duties of the fiduciary, but no attorney’s fee in an amount exceeding $50 shall be paid in a fiduciary estate administered under court jurisdiction unless the amount of the fee has been first approved by order of court. Except as provided in the Maryland Rules, a fiduciary may prosecute, defend, or submit to arbitration any actions, claims, or proceedings in any jurisdiction for the protection of the fiduciary estate. The fiduciary may request criminal injuries compensation, restitution, or any other financial property interest of a beneficiary who is a victim of a crime. A fiduciary may continue as or become a limited partner in any partnership or a member in any limited liability company, including a single member limited liability company. A fiduciary may incorporate any business or venture which forms a part of the fiduciary estate. A fiduciary may convert a sole proprietorship the decedent was engaged in at the time of the decedent’s death to a limited liability company. A fiduciary may exercise options, rights and privileges contained in a life insurance policy, annuity, or endowment contract constituting property of the fiduciary estate, including the right to obtain the cash surrender value, convert a policy to another type of policy, revoke any mode of settlement, and pay any part or all of the premiums on the policy or contract. A fiduciary may pay any valid claim. If any assets of the fiduciary estate are encumbered by mortgage, pledge, lien, or other security interest, a fiduciary may pay the encumbrance or any part of it, renew, or extend an obligation secured by the encumbrance, or convey or transfer the assets to the creditor in satisfaction of the security interest of the creditor, in whole or in part, if the act appears to be in the best interest of the fiduciary estate. A fiduciary may release or terminate any mortgage or security interest, if the obligation secured by the mortgage or security interest has been fully satisfied. A guardian may exercise any inter vivos power which the minor or disabled person could have exercised under an instrument, including the power to sell, mortgage, or lease. A fiduciary may hold a security in the name of a nominee or in other form without disclosure of the interest of the fiduciary estate, but the fiduciary shall be liable for a wrongful act of the nominee in connection with the security so held. To comply with an environmental law, a fiduciary may: Inspect property held by the fiduciary, including any type of interest in a sole proprietorship, partnership, limited liability company, or corporation, and any assets owned by a sole proprietorship, partnership, limited liability company, or corporation, to determine compliance with an environmental law and respond to an actual or potential environmental liability relating to the property; Before or after the initiation of a claim or a governmental enforcement action, take action necessary to prevent, abate, or otherwise remedy an actual or potential environmental liability that affects the fiduciary estate; Settle or compromise at any time a claim against the fiduciary estate based on an alleged environmental liability that may be asserted by any person; and Pay from the fiduciary estate the costs of an inspection, review, study, abatement, response, cleanup, or other remedial action that involves an environmental liability. If a fiduciary acts prudently and in good faith, the fiduciary is not liable to a person with an interest in assets of the fiduciary estate for a decrease in the value of the assets for taking action under this subsection or otherwise taking action to comply with an environmental law or reporting requirement. Acceptance by the fiduciary of property or failure by the fiduciary to take action under this subsection does not imply that there is or may be any liability under an environmental law with respect to any property. A fiduciary may donate a conservation easement on any real property, or consent to the donation of a conservation easement on any real property by a personal representative of an estate of which the fiduciary is a legatee, in order to obtain the benefit of the estate tax exclusion allowed under § 2031(c) of the United States Internal Revenue Code of 1986, as amended, if: The governing instrument authorizes or directs the donation of a conservation easement on the real property; or Each beneficiary who has an interest in the real property that would be affected by the conservation easement consents in writing to the donation.

Whenever securities are deposited or exchanged, or tendered for deposit or exchanged by a fiduciary under a reorganization agreement or plan of reorganization, a committee formulating, proposing, or carrying out a plan or soliciting deposits or exchanges under an agreement or plan, any depositary with or through which the deposit or exchange of securities may be made, solicited, requested or permitted, and a person to whom or to which securities are to be delivered pursuant to an agreement or a plan, may accept, receive, hold and ultimately dispose of the securities in accordance with the authorization or instructions of the fiduciary depositing or exchanging securities or tendering them for deposit or exchange under a reorganization agreement or plan of reorganization, without an obligation to inquire whether a fiduciary is authorized to make a deposit or exchange or is committing a breach of the obligation as fiduciary in so doing. No committee, depositary, or ultimate recipient is liable in any way of any kind to a person for an action taken, suffered, or permitted with respect to securities in accordance with the authorization or instructions given by a fiduciary depositing or exchanging the securities or tendering the securities for deposit or exchange, unless the committee, depositary, or ultimate recipient has actual knowledge that a fiduciary is committing a breach of fiduciary trust in making the deposit or exchange, or has knowledge of facts that the action or conduct of the committee, depositary, or ultimate recipient amounts to bad faith.

Notwithstanding any other provision of law, a fiduciary holding securities in a fiduciary capacity, a bank or trust company holding securities as a custodian or agent, and a bank or trust company holding securities as custodian for a fiduciary, is authorized to deposit or arrange for the deposit of the securities in a securities clearing corporation, regardless of whether the depositor owns capital stock of the clearing corporation. When securities are deposited in accordance with paragraph (1) of this subsection, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of the clearing corporation with any other securities deposited in the clearing corporation by a person regardless of the ownership of the securities, and certificates of small denomination may be merged into one or more certificates of larger denomination. The records of the fiduciary and the records of the bank or trust company acting as custodian, as agent or as custodian for a fiduciary shall show at all times the name of the party for whose account the securities are deposited. Title to the securities may be transferred by bookkeeping entry on the books of the clearing corporation without physical delivery of certificates representing the securities. A bank or trust company depositing securities pursuant to this section is subject to the rules and regulations as, in the case of State chartered institutions, the Commissioner of Financial Regulation and, in the case of national banking associations, the Comptroller of the Currency may issue from time to time. A bank or trust company acting as custodian for a fiduciary, on demand by the fiduciary, shall certify in writing to the fiduciary the securities deposited in accordance with this section by the bank or trust company in the clearing corporation for the account of the fiduciary. A fiduciary, on demand by any party to a judicial proceeding for the settlement of the account of the fiduciary or on demand by the attorney for the party, shall certify in writing to the party the securities deposited by the fiduciary in the clearing corporation for its account as fiduciary. This section applies whether the trust be created or the appointment made prior or subsequent to July 1, 1973.

A fiduciary, or party of whom a bond, undertaking or other obligation is required, may agree or arrange with a surety for a general or a special deposit for safekeeping of any money, assets and other property, for which the fiduciary is or may be responsible, with a bank, savings bank, safe deposit or trust company authorized by law to do business and situate in the county in which the fiduciary’s bond is filed. A deposit shall be made in a manner as to prevent the withdrawal or alienation of money, assets, or other property, or any part of it, without the written consent of the surety, or an order of a court, made on notice to the surety as the court directs.

The following investments shall be lawful investments for any person: Debentures issued by federal intermediate credit banks or by banks for cooperatives; Bonds issued by federal land banks or by the Federal Home Loan Bank Board; Mortgages, bonds, or notes secured by a mortgage or deed of trust, or debentures issued by the Federal Housing Administration; Obligations of national mortgage associations; Shares, free-share accounts, certificates of deposit, or investment certificates of any insured financial institution, as defined in § 13-301(h) of this article; Bonds or other obligations issued by a housing authority pursuant to the provisions of Division II of the Housing and Community Development Article, or issued by any public housing authority or agency in the United States, when such bonds or other obligations are secured by a pledge of annual contributions to be paid by the United States or any agency of the United States; Obligations issued or guaranteed by the International Bank for Reconstruction and Development; Obligations issued or guaranteed by the African Development Bank; Obligations issued or guaranteed by the International Finance Corporation; or United States government obligations, whether invested in directly, or in the form of securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the provisions of the federal Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq., if: The portfolio of the open-end or closed-end management type investment company or investment trust is limited to direct obligations of the United States government and to repurchase agreements fully collateralized by United States government obligations; and The open-end or closed-end management type investment company or investment trust takes delivery of that collateral, either directly or through an authorized custodian. In this subsection, “affiliate” has the meaning stated in 12 U.S.C. § 1841. A trust company in its fiduciary capacity may deposit in the trust company or in a financial institution that is an affiliate of the trust company funds awaiting investment or distribution unless the agreement or instrument that gives the trust company investment authority provides to the contrary. A trust company in its fiduciary capacity may purchase bonds of the State or of any political subdivision of the State underwritten in whole or in part by the trust company or a financial institution that is an affiliate of the trust company unless the agreement or instrument that gives the trust company investment authority provides to the contrary. Subject to the provisions of paragraph (2) of this subsection, a corporate fiduciary may invest and reinvest fiduciary funds and other funds over which the corporate fiduciary has investment discretion in securities of, or other interests in, a no-load open-end or closed-end management type investment company or investment trust registered under the provisions of the federal Investment Company Act of 1940 that does not impose a contingent deferred sales charge or distribution charge on that investment or reinvestment. The provisions of paragraph (1) of this subsection apply even if the corporate fiduciary or an affiliate of the corporate fiduciary provides services as investment adviser or manager, sponsor, distributor, custodian, transfer agent, registrar, or similar related services to the investment company or investment trust and receives reasonable compensation for those services if: The investment is authorized by the agreement or instrument that gives the corporate fiduciary investment authority, or by court order; or The corporate fiduciary discloses to its principal or, if the assets are held in trust, to any current income beneficiaries of the trust: The services provided by the corporate fiduciary or its affiliate to the investment company or investment trust; and The rate, formula, or other method by which compensation paid to the corporate fiduciary or its affiliate is determined. Any person holding a mortgage or other lien on property may exchange it, prior or subsequent to maturity, for any other lawful investment. This section shall not be construed as relieving any person from any duty of exercising reasonable care in selecting securities. No general, local, or special law which is inconsistent with this section shall have any effect. This section shall not be construed to make unlawful any investment not listed in this section.

Whenever by will, deed, or other instrument, a power to sell, mortgage, lease or otherwise dispose of or deal with property shall be given to any one or more fiduciaries, the power, whether discretionary or otherwise, shall be construed to be appurtenant to the fiduciary office and shall pass to and be exercisable by any surviving or successor fiduciary, unless an intention to the contrary is expressly declared in the will, deed, or other instrument.

A fiduciary making a distribution or delivery of any property, in conformity to a decree or order of court passed pursuant to the Maryland Rules, shall be protected from a claim in respect to the property by an absent or unknown beneficiary or life tenant proceeded against under the Maryland Rules, or the heirs, personal representatives, or assigns of an absent or unknown beneficiary or life tenant. Nothing in this section limits a similar protection granted to fiduciaries by applicable laws in effect before the passage of the Maryland Rules.

The receipt and release of a foreign fiduciary to whom property is transferred, pursuant to a court order under the Maryland Rules, is a good and sufficient release to the fiduciary transferring the property.

In addition to any other means of enforcing a court order, the court that has ordered a fiduciary to give countersecurity pursuant to the Maryland Rules may compel compliance with the court order by attachment and sequestration. If the fiduciary fails to give countersecurity within the time fixed by the court, and is removed: The register of wills may bring suit on the bond of the fiduciary to recover taxes and costs; and If the register does not bring suit on the bond, and a new fiduciary is appointed, the new fiduciary may bring suit on the bond of the removed fiduciary.

The discharge of a fiduciary who has resigned the fiduciary’s office pursuant to the Maryland Rules does not release the fiduciary, or sureties of the fiduciary, from liability to any of the cestui que trustent, or other persons, for acts, defaults, or omissions of duty occurring while the fiduciary was in office.

A court shall remove a fiduciary who has: Willfully misrepresented material facts leading to the appointment of the fiduciary or to other action by the court in reference to the fiduciary estate; Willfully disregarded an order of court; Shown to be incapable, with or without fault to properly perform the duties of the office of fiduciary; or Breached the fiduciary duty of good faith or loyalty in the management of property of the fiduciary estate. A court may remove a fiduciary who has: Negligently failed to file a bond within the time required by rule or order of court; Negligently failed to obey an order of court; or Failed to perform any fiduciary duty, or to competently administer the fiduciary estate. Procedures for the removal of a fiduciary shall be conducted by the court in accordance with the provisions of the Maryland Rules applying to a fiduciary. The provisions of this section may not apply to personal representatives.

An entity that controls, is controlled by, or is under common control with a trust company shall be jointly and severally liable for claims against the trust company when the trust company is acting as a trustee of bond indentures or similar debt issuances, if the trust company: May exercise trust or fiduciary powers in the State; and Meets the qualifications under 12 U.S.C. § 1841(c)(2)(D).

In this section the following words have the meanings indicated. “Fiduciary” means: A trust company; An investment advisor that is controlled by or is under common control with a trust company; or A person who makes an election under subsection (g) of this section. “Fiduciary assets” means assets held by a fiduciary as trustee, guardian, conservator, committee, custodian under the Maryland Uniform Transfers to Minors Act, investment manager, or investment advisor. “Investment advisor” means any company registered under the provisions of the federal Investment Advisers Act of 1940. A fiduciary shall: Invest and manage fiduciary assets as a prudent investor would, considering the purposes, terms, distribution requirements, and other circumstances of the governing instrument and the nature of the fiduciary appointment; Exercise reasonable care, skill, and caution regarding the anticipated effect on the fiduciary assets as a whole under the facts and circumstances prevailing at the time of any action by the fiduciary; Invest and manage not in isolation but in the context of the fiduciary assets as a whole and as part of an overall investment strategy that incorporates risk and return objectives reasonably suitable under the terms of the governing instrument and the nature of the fiduciary appointment; Diversify investments unless, under the circumstances, the fiduciary reasonably believes it is in the best interests of the beneficiaries or furthers the purposes for which the fiduciary was appointed not to diversify; Review fiduciary assets within a reasonable time after acceptance of the fiduciary appointment and make and implement decisions concerning the retention or disposition of investments existing prior to the appointment in order to conform with this section; Pursue an investment strategy that considers both the reasonable production of income and safety of capital, consistent with the fiduciary’s duty of loyalty and impartiality and the purposes for which the fiduciary was appointed; Act with prudence in deciding whether and how to delegate authority and in the selection and supervision of agents; and Incur only costs that are reasonable in amount and appropriate to the investment responsibilities of the fiduciary appointment. A fiduciary’s investment decisions shall be judged in accordance with the following guidelines and standards: No specific investment or course of action is, taken alone, prudent or imprudent; The fiduciary may exercise reasonable business judgment regarding the anticipated effect on the portfolio of fiduciary assets as a whole under the facts and circumstances prevailing at the time of the decision or action; The fiduciary shall have no liability for continuing to hold fiduciary assets existing at the time the fiduciary appointment was accepted or subsequently added pursuant to proper authority if, and as long as, the fiduciary, in the exercise of good faith and reasonable prudence, considers the retention to be in the best interests of the beneficiaries or in the furtherance of the goals of the governing instrument; Subject to all other provisions of this section, the fiduciary may retain as fiduciary assets an interest in the fiduciary, if the fiduciary is a corporation, or in any corporation controlling, controlled by, or under common control with the fiduciary; and In making an investment decision, the fiduciary may consider, without limitation: General economic conditions; The possible effect of inflation; The expected tax consequences of investment decisions or strategies; The role each investment or course of action plays within the investment of the portfolio of fiduciary assets as a whole; The expected total return of the investment including both income yield and appreciation of capital; The reasonableness of any costs associated with the investment; and The status of related assets of beneficiaries. To the extent that any provision of this section is inconsistent with the terms of a governing instrument, the terms of the governing instrument shall control. If more than one person has investment authority over fiduciary assets, this section shall apply if any of those persons is a fiduciary. Nothing in this section shall abrogate or restrict the power of a court to: Direct or permit a fiduciary to deviate from the terms of a governing instrument; or Direct or permit a fiduciary to take, or to restrain a fiduciary from taking, any action regarding the making or retention of investments. This section shall apply to any person who: Is a trustee, guardian, conservator, committee, custodian under the Maryland Uniform Transfers to Minors Act, investment manager, or investment advisor; and Files with the Commissioner of Financial Regulation a statement that the person elects to have this section apply to all fiduciary assets controlled by the person.

A corporation that under the laws of this State may act as a fiduciary without bond or security other than its own obligation may not incur the liability of a surety upon a bond.

Notwithstanding any other provision of law, and except as otherwise provided in the governing instrument, the duties of a trustee regarding the acquisition, retention, or ownership of a contract of insurance on the life of the grantor of the trust, or on the lives of the grantor and the grantor’s spouse, children, or grandchildren, include a duty of loyalty and fair dealing, but do not include a duty to: Determine whether any contract of life insurance in the trust is or remains a proper investment; Diversify the investment; or Exercise any policy options, rights, or privileges available under any contract of life insurance in the trust, including any right to borrow the cash value or reserve of the policy, acquire a paid-up policy, or convert to a different policy.

In this section, “fiduciary” includes an agent, as defined in § 17–101 of this article. Unless waived by the client, a communication between an attorney and a client that acts as a fiduciary is subject to the attorney–client privilege even if fiduciary funds are used to compensate the attorney for legal services rendered to the client. The existence of a fiduciary relationship between a fiduciary and a beneficiary does not constitute or give rise to a waiver of the attorney–client privilege for communications between the attorney and the fiduciary.