MARYLAND WILLS AND TRUSTS REQUIREMENTS
Statutory Authority.
Wills:ย Maryland Code, Estates and Trusts, Title 4 (MD Est & Trst, ยงยง4-101, et. seq.).
Trusts:ย Maryland Trust Act, MD Est & Trst, Title 14.5 (ยงยง14.5-101, et. seq.).
Maryland Will Requirements.
To execute a valid will, a Maryland testator must be at least 18 years old and โlegally competent to make a will.โย Legal competence amounts to a testatorโs reasonable understanding of his or her assets, family members and heirs, and the effects of a willโs provisions.
Under Maryland law, wills must be in writing and signed by the testator. If a testator is unable to sign, another person may sign on behalf of the testator in the testatorโs presence and at his or her express direction.
Along with the testatorโs signature, a Maryland will must also be witnessed and signed by two or more credible witnesses who are in the testatorโs presence.ย For purposes of execution of a will, a witness is only in the testatorโs presence if they are in the same physical locationโvideo conferencing is insufficient.
Maryland law presumes that, if a will is present, all property owned by the testator upon his or her death is to be distributed under the will.ย ย
Maryland wills and trust instruments can incorporate by reference other documents within the will or trust, if the incorporated documents are in existence when the will or trust instrument is executed.ย For incorporation by reference to be effective, the primary will or trust instrument must clearly indicate an intent to incorporate the other document and the other document must be sufficiently described to allow identification.
Maryland law does not provide for the notarized โself-provedโ affidavit used in many states.ย Instead, if a will includes a โrecital of attestationโ under which the willโs witnesses attest to the proper execution of the will, the will is presumed to have been properly executed when submitted to probate.ย
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Amendment, Revision, and Revocation of Maryland Wills.
Maryland wills may be revoked by execution of a later will that either expressly revokes the earlier will or revokes the earlier will by implication.ย If the later will is itself subsequently revoked, the earlier will is not revived unless it is formally republished.ย A Maryland will may also be revoked through physical destruction of the document, such as by cutting, burning, or tearing.ย ย
A Maryland will can be amended through execution of a new will complying with all formalities required for creation of a will.ย Or, amendment can be accomplished by execution of a codicil that satisfies all formalities required for creation of a will.
If, after executing a will or revocable trust, a testator is divorced, any provisions in the will or trust relating to the former spouse are considered revoked, unless the will, trust instrument, or a divorce decree expressly provides otherwise.ย Property subject to voided provisions is distributed as if the provision had not existed.
If a testator has a child after execution of a willโand if the will provides for another child of the testator but not for the after-born child and does not expressly omit the after-born childโthe after-born child inherits the same share of the estate the child would have inherited had the testator died intestate.ย Alternatively, the after-born child receives a share equal to the value of all distributions to the testatorโs children divided by the total number of the testatorโs childrenโif that amount would be less than the intestate share.
In the event that a testator gets married and has a child (whether through birth, adoption, or legitimation) subsequent to executing a Maryland will, the will is considered revoked as long as the after-born child survives the testator.
Holographic and Oral Wills.
Maryland law recognizes holographic wills, but only under certain limited circumstances.ย To form a valid holographic will, the testator must be serving in the United States armed forces.ย The will must be entirely in the testatorโs own handwriting and signed while the testator is outside of the U.S.ย Maryland holographic wills become void one year after a testatorโs discharge from the armed forces, unless the testator has already died or no longer has adequate capacity to create a will.
Maryland law does not recognize oral (or โnuncupativeโ) wills.
Maryland Trust Requirements.
Trusts in Maryland are primarily governed by the Maryland Trust Act (enacted by the legislature as Title 14.5 of the MD Estate & Trust Code), Marylandโs version of the Uniform Trust Code.ย In general, Maryland law applies the same legal standards for interpreting the terms of a living trust as are applied to wills.ย
Maryland trusts can be created for any lawful purpose that does not violate the stateโs public policy and is possible to achieve.ย The purpose and terms of a Maryland trust must ultimately be designed to benefit the trustโs beneficiaries. A trust found to have been induced by fraud, duress, or undue influence is void under Maryland law. If the terms of a trust or the settlorโs intentions were affected by a mistake of law or fact, a court may reform the terms of even an unambiguous trust to conform to the settlorโs intentions.ย ย
Though most trusts are evidenced by a written instrument setting forth the trustโs terms, Maryland law recognizes oral trusts.ย However, the creation and terms of an oral trust must be established by clear and convincing evidence.ย ย
A Maryland trust can be created through transfer of property by a settlor to a trustee, a settlorโs declaration that he or she owns property as trustee, or by exercising a power of appointment in favor of a trustee.ย A valid trust is only created under Maryland law if the settlor has adequate capacity to create the trust and expresses an intent to create a trust.ย For revocable trusts, the standard for capacity is the same as for wills.ย Maryland law assumes that trusts are revocable unless the trust is expressly made irrevocable.
Additionally, a trust must also have a trustee with actual duties to perform and a reasonably ascertainable beneficiary (subject to exceptions such as for charitable trusts and trusts for the care of animals).ย In administering a trust, a trustee is governed by the โprudent person rule,โ under which he or she must exercise reasonable skill, care, and caution.
Maryland trusts terminate upon revocation or expiration under the trustโs own terms, when the trustโs purpose becomes unlawful or impossible, or upon order of a court in a proceeding commenced by the trustee or a beneficiary.ย If a Maryland grantor divorces after creating a revocable trust, any provisions in favor of the former spouse are deemed to have been revoked, and the trust is treated as if the former spouse had died prior to the grantor.
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Essential Legal Protection for AchieversSpecial Considerations.
Estate and Inheritance Taxes:ย Maryland is one of the few states that impose both an estate tax and an inheritance tax.ย Marylandโs estate tax applies to estates with gross values over $5 millionโless than half the current federal thresholdโand the estate-tax rate goes as high as 16%.ย Distributions to spouses are exempt from Marylandโs estate tax.
Maryland imposes an inheritance tax rate of 10% on non-exempt property that passes by will or through intestacy, interests acquired through joint ownership, assets like POD accounts and trusts over which the decedent retained some control, and certain transfers within two years of the decedentโs death.ย Maryland law allows for numerous exemptions to the inheritance tax, including for property inherited by a parent, sibling, lineal descendant (or spouse thereof), or stepchild of the decedent.ย Assets inherited through small-estate probate or not exceeding $1,000 in value are also exempt.ย ย
Small Estates Probate:ย Maryland provides a streamlined probate process for certain small estates.ย Qualifying estates must be valued at less than $50,000 (or $100,000 if a surviving spouse is the sole heir).ย When small estates probate is available, the personal representative is able to administer the estate without going through the lengthier, more complicated regular probate process.ย Modified administration is also available for solvent estates if no inheritance taxes are implicated and the personal representative and beneficiaries consent.ย ย
Non-Probate Transfers:ย In addition to living trusts, Maryland law offers multiple other options for transfer of assets outside probate.ย Assets co-owned as joint tenants with a right of survivorship automatically transfer to a surviving owner upon the other ownerโs death.ย Maryland also recognizes tenancy by the entireties, another joint ownership form that includes a right of survivorship.ย Tenancy by the entirety can be used for both real and personal property in Maryland but is only available for co-ownership by two spouses.ย ย
POD (payable-on-death) and TOD (transfer-on-death) designations, which provide for automatic transfer to a beneficiary upon an ownerโs death, may also be used in Maryland.ย POD designations can be added to financial accounts and CDs. TOD designations can be used with registered securities, brokerage accounts, and some other similar assets.ย ย
Transfer-on-Death (TOD) Deeds and Titles:ย Maryland law does not recognize TOD designations on real estate deeds.ย However, Maryland does allow deeds creating โenhanced life estatesโ (a/k/a โLady Bird Deedsโ).ย Lady Bird deeds allow a property owner to retain full control over a property, including the power to sell or transfer, for life, while providing in advance for non-probate transfer to a long-term beneficiary upon the ownerโs death.ย ย
Maryland law recognizes TOD designations on vehicle titles.ย If a TOD designation is added to a vehicleโs official title, ownership passes to the beneficiary automatically upon the original ownerโs death.ย
Spousal Shares: To protect against spousal disinheritance, Maryland law grants surviving spouses the right to an elective share in a decedent spouseโs estate.ย Rather than receive a small inheritance provided in a will or nothing at all, a surviving spouse can instead choose to receive an elective share, which is measured as one-third of the decedentโs estate if the decedent left surviving children or one-half otherwise.ย Beginning in 2020, the estate upon which the elective share is calculated was expanded to includeโin addition to probate assetsโassets held in revocable trusts and certain joint interests, transfers made during life, and life insurance proceeds.ย Spousal elective shares can be waived through valid pre- or post-nuptial agreements.
Spendthrift Trusts:ย Maryland law expressly recognizes spendthrift and discretionary trusts protecting trust assets from claims of most creditors of trust beneficiaries.ย If a trust includes a spendthrift or support provision or discretionary distributions, a beneficiaryโs creditor cannot attach trust property until it is actually distributed to the beneficiary. However, interests in spendthrift trusts can be attached to satisfy domestic support obligations and governmental claims.ย If a spendthrift trust is revocable, the settlorโs creditors can attach trust assets during the settlorโs lifetime, and trust assets can be reached to satisfy estate claims.ย If irrevocable, creditors of the settlor can only reach the amount of trust assets that can be distributed for the settlorโs benefit.ย ย
Creating a will or trust does not have to be difficult or intimidating.ย However, certain circumstancesโlike second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests (to name a few)โcan add a layer of complexity and result in unforeseen long-term consequences.ย Whenever any out-of-the-ordinary issues are present, itโs a good idea to consult with an experienced attorney familiar with and licensed under the laws of the relevant jurisdiction.
