After you sign your Maryland trust

Funding: a trust governs what is titled to it

A trust is created by a transfer of property to a trustee during your lifetime or by will or another disposition taking effect at death, by your declaration that you hold identifiable property as trustee, or by the exercise of a power of appointment in favor of a trustee (Est. & Trusts § 14.5-401). Signing the instrument does not move your accounts or your house into it; each asset is retitled to the trustee, or names the trust as beneficiary, to come under its terms. A will may also leave property to the trustee of a trust signed before or with the will, even one you may later amend (Est. & Trusts § 4-411).

A married couple's home or account held as tenants by the entirety and conveyed to the trustee of their trust keeps the entireties immunity from the separate creditors of either spouse while they remain married, the property stays in the trust, both are beneficiaries and the trust instrument or the deed provides that the section applies (Est. & Trusts § 14.5-511(b)); the immunity continues after the first death as to the separate creditors of the spouse who died (§ 14.5-511(c)). Whether a joint trust is drafted to keep that protection is a question for the attorney who prepared it.

While you are living: your trust, your control

For an instrument signed on or after January 1, 2015, a Maryland trust is revocable unless its terms expressly say it is irrevocable (Est. & Trusts § 14.5-602(a)). The capacity to create, amend, revoke or add property to a revocable trust, or to direct its trustee, is the capacity to make a will (Est. & Trusts § 14.5-601(a)). While the trust is revocable, the beneficiaries' rights are subject to your control and the trustee's duties are owed exclusively to you (Est. & Trusts § 14.5-603(a)).

During your lifetime, the property of a revocable trust is subject to the claims of your creditors (Est. & Trusts § 14.5-508(a)(1)): a revocable trust is not an asset-protection device.

Your successor trustee

The person you name as successor takes office by accepting — by the method your instrument provides or, where it provides none or the method is not exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee (Est. & Trusts § 14.5-701(a)). Without a named successor willing to serve, a vacancy is filled by a person the qualified beneficiaries appoint unanimously, or by the court (Est. & Trusts § 14.5-704(c)). Tell the person you name where the instrument is and how to reach your advisers.

Keeping it current

You revoke or amend a revocable trust by substantially complying with a method its terms provide or, where they provide none or the method is not expressly exclusive, by a later will or codicil that expressly refers to the trust or specifically devises property that would otherwise pass under it, or by another method manifesting clear and convincing evidence of your intent (Est. & Trusts § 14.5-602(c)). With more than one settlor, each may revoke or amend as to the portion attributable to that settlor's contribution, and the trustee promptly notifies the other settlors of a revocation or amendment by fewer than all (§ 14.5-602(b)).

An absolute divorce or an annulment entered on or after October 1, 2016, after the trust was created, revokes the trust's provisions for distributions to the former spouse — treated as having died on the date of the divorce — and removes the former spouse as a trustee or an adviser, unless the instrument, a court order or a written agreement between you provides otherwise (Est. & Trusts § 14.5-604). An agent under a power of attorney may exercise your powers to revoke, amend or distribute only as both the trust and the power of attorney expressly authorize (§ 14.5-602(e)).

If you can no longer manage it

Losing capacity does not make a revocable trust irrevocable (Est. & Trusts § 14.5-601(c)). The successor you named steps in as your instrument provides; a vacancy also occurs when a guardian is appointed for an individual trustee, or when two licensed physicians determine that a trustee is unable to handle business affairs (Est. & Trusts § 14.5-704(a)). While you lack the capacity to revoke, a beneficiary to whom distributions may be made during your lifetime may enforce the trust as if it were irrevocable (§ 14.5-603(b)); a guardian may exercise your powers to revoke, amend or distribute only with the guardianship court's approval (§ 14.5-602(f)).

What happens at your death

At your death a revocable trust becomes irrevocable. Within 60 days after accepting, your successor notifies the qualified beneficiaries of the acceptance and of the trustee's contact details, and within 90 days after learning the trust has become irrevocable, of the trust's existence, your identity as settlor and their rights to a copy and to a report (Est. & Trusts § 14.5-813(b)(1)). A surviving spouse is notified within 60 days after the trustee learns of the death (Est. & Trusts § 3-409(c)), and a contest of the trust's validity must come within one year after your death, or six months after the trustee's contest notice, whichever is earlier (Est. & Trusts § 14.5-605).

The trust answers for your debts (Est. & Trusts § 14.5-508(a)(5)); a share passing to a recipient outside the inheritance tax's exempt family classes is taxed at 10 percent, paid by the trustee before distributing it (Tax-Gen. §§ 7-203, 7-204, 7-216). The trustee then reports to a qualified beneficiary who requests it, annually and at termination (Est. & Trusts § 14.5-813(c)), and distributes under your terms.

Keeping the original

Keep the signed trust instrument and every amendment together, where your successor trustee can find them, and tell your successor where they are. A bank or buyer dealing with your successor can rely on a certification of trust instead of the whole instrument (Est. & Trusts § 14.5-910).

When a licensed Maryland attorney is the right next call

Whether your trust is revocable, how to amend it, whether a joint trust keeps entireties protection, how it fits with your will, and what a divorce or a move does to it are questions a licensed Maryland attorney of your choosing answers. TrusteeClear explains the statutes and prepares no estate-planning document.