Declaration of Trust — Maryland UTC Adopted

How a Declaration of Trust works in Maryland

A declaration of trust in Maryland operates under the Maryland Trust Act, Md. Code Ann., Est. & Trs. Section 14.5-101 et seq., enacted in 2014 and effective January 1, 2015, based on the Uniform Trust Code. The trust is created when the settlor with capacity signs the instrument with intent to create a trust, a definite beneficiary exists, and the trustee has duties. Maryland does not require notarization for validity of a revocable living trust, though notarization is recommended for practical purposes such as recording real property deeds. Funding makes the trust operative: real property moves by a recorded deed and accounts are retitled in the trust name. A successor trustee named in the document takes over when the acting trustee can no longer serve. When third parties need proof of authority, Section 14.5-910 permits the trustee to present a certification of trust instead of the full instrument.

Frequently asked questions

Does a Maryland declaration of trust have to be notarized or witnessed?

Maryland does not require notarization for validity of a revocable living trust, and no witness requirement applies to the instrument itself. Notarization is still recommended for practical purposes, particularly because deeds moving real property into the trust must be acknowledged and recorded under Maryland recording statutes. The certification of trust under Section 14.5-910 may be signed or otherwise authenticated by a trustee, with no statutory notary or witness requirement on the certification itself. Institutions commonly expect signed documents, so planning the signing with recording steps in mind avoids friction.

What goes in a Maryland certification of trust under Section 14.5-910?

The certification must contain: that the trust exists and the date the instrument was executed, the identity of the settlor, the identity and address of the currently acting trustee, the trustee's powers in the pending transaction, revocability and who holds the power to revoke, cotrustee signing authority, the trust's taxpayer identification number unless it is the settlor's SSN, and the manner and name in which title may be taken. It need not contain dispositive terms. Section 14.5-910(h)(2) lets title insurers obtain the instrument in real property transactions.

How does Maryland treat business trusts?

Maryland has one of the most developed statutory trust frameworks. The Maryland Statutory Trust Act, Md. Code Ann., Corps. & Assns. Title 12, originally enacted in 1999 as the Business Trust Act and renamed in 2004, lets an unincorporated trust or association file a certificate of trust with the Department of Assessments and Taxation and become a separate legal entity with limited liability. Maryland statutory trusts are widely used as Delaware Statutory Trust alternatives for REITs and 1031 exchanges.

How long can a Maryland trust last, and what taxes apply?

Maryland is one of only two states (with New Jersey) that imposes both an estate tax and an inheritance tax, which shapes trust planning significantly. Maryland taxes resident trusts on all income and non-resident trusts only on Maryland-source income. There is no state-level gift tax. On duration, Maryland has not abolished the rule against perpetuities, so extended dynasty-style planning is constrained compared with states that have. Maryland also does not authorize self-settled asset protection trusts, so asset protection depends on traditional spendthrift drafting rather than a DAPT statute.

Common mistakes

Common issues include assuming Maryland requires notarization for the trust instrument itself (it does not for a revocable living trust, though deeds moving real property into the trust must be acknowledged and recorded), and leaving the trust unfunded so property never moves into it. Another frequent mix-up is conflating the two tracks: the Maryland Trust Act under Est. & Trs. Section 14.5 governs family trusts, while the Statutory Trust Act under Corps. & Assns. Title 12 governs business entities that file with SDAT. People also overlook Section 14.5-910(h)(2), which allows title insurance producers and insurers to obtain a copy of the trust instrument when real property is sold or encumbered, so expecting full privacy in a real estate closing is unrealistic. Maryland's estate tax and inheritance tax, both of which apply, are also frequently misjudged as absent.

Maryland notes

Maryland operates under the Maryland Trust Act, Md. Code Ann., Est. & Trs. Section 14.5-101 et seq., enacted in 2014 and effective January 1, 2015, based on the Uniform Trust Code with Maryland modifications. The certification of trust under Section 14.5-910 may be signed or authenticated by a trustee, must state that the trust has not been revoked or modified in a manner causing representations to be incorrect, and need not contain dispositive terms; there is no statutory form. Section 14.5-910(h)(2) specifically allows title insurance producers and insurers to obtain a copy of the trust instrument in real property transactions. Business trusts follow the Maryland Statutory Trust Act, Corps. & Assns. Title 12, renamed in 2004, with certificates filed with SDAT and governing instruments kept private. Maryland has no state gift tax but imposes both an estate tax and an inheritance tax, taxes resident trusts on all income, and does not authorize self-settled asset protection trusts.