Maryland Enacts Provisions Regarding the State Trust Act
by: Paul McSheffrey
With House Bill 83, the Maryland legislature has recently enacted provisions regarding the State Trust Act. The Bill provides for the codification of Maryland’s trust laws at Title 14.5 of the Maryland Trust Act. The Act applies to express charitable or non-charitable trusts, as well as trusts created in accordance with a statute, judgment, or decree that require the trust to be administered in the same manner as an express trust.
Among the information contained within the Act are provisions regarding the role of the courts in the administration of a trust, the judicial review of a trustee, consent of a person that may represent and bind another person, and authorization of a court to appoint a representative. Under, 14.5-201(A), a court may intervene actively in the administration of a trust in order to implement remedies as required by the public interest and the interests of the beneficiaries of the trust.
The Act also provides for the method of creating a trust, revoking or amending a trust, and providing for removal of a trustee. Under 14.5-401, a trust may be created by transfer of property to another person as trustee during the lifetime of the person creating the trust, or transfer of property by will or other disposition taking effect on the death of the person creating the trust. Additionally, a trust may be created by declaration of the owner of property that the owner holds property as trustee, or exercise of a power of appointment in favor of a trustee. The trust will only be created if the person creating the trust has adequate capacity to create the trust and they indicate an intention to create the trust. The trust must have a definite beneficiary unless it is a charitable trust, a trust for the care of an animal, or a non-charitable trust as provided for under 14.5-408. A trust may only be created if the purpose is lawful, possible to achieve, and not contrary to public policy.
Additional detail on these provisions may be found at Title 14.5. Maryland Trust Act. These provisions become effective on January 1, 2015.
About the Author:
Paul McSheffrey, J.D. is Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Northeastern University and earned his Juris Doctor at the New England School of Law. Paul is admitted to the Bar in Massachusetts and New York. He can be reached at paul@bankersadvisory.com
Paul McSheffrey, JD, is a senior regulatory compliance consultant with CLA. He is a graduate of Northeastern University and earned his juris doctor at the New England School of Law. He is admitted to the Bar in both Massachusetts and New York.
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