What is Required for a Trust in Maryland?

Trusts are a critical part of estate planning and can be beneficial to people in many ways. Trusts can help make sure that any assets you want to pass on to your family or to anyone else are managed properly, minimize tax consequences for certain things, and benefit charitable causes. However, setting up a trust can be a lot of work, and many people who want to set up a trust may not know where to start.

To set up a trust in Maryland, you need to have several things. First, a document should be written called a declaration of trust. Second, a “trustee” needs to be named to manage the trust and make sure the wishes of the person who set it up are carried out correctly. While trusts do not necessarily need to be in writing, we strongly encourage that any trust you create be memorialized in writing. Otherwise, it will be very hard to enforce.

For help with your trust-related legal issues, call our Maryland estate and trusts attorneys from Rice, Murtha & Psoras at (410) 694-7291 for a free review of your situation.

What Are the Required Parts of a Trust in Maryland?

A trust is a legal arrangement where one party puts another party in charge of carrying out their wishes in a certain way. Trusts can be used for many, many different things. They are not simply for distributing an estate after death or creating a “slush fund” for someone. Trusts can be used for any legal purpose. So, if you can think it up and it is not against the law, our Columbia estate and trusts lawyers will be able to help you set up a trust for your purposes.

There are a lot of legal terms in trusts that may sound strange, odd, or otherwise less than obvious. Our Maryland estate and trusts lawyers have compiled some of the important required parts of a trust so that you have some idea of what is going on when yours is made.


A “trustor” is the entity that creates the trust. Trustors can be individuals, groups of people, a company, or any other entity. The trustor determines the purpose of the trust, chooses how the trust operates and chooses the beneficiary.

Sometimes, the “trustor” will be called something else, such as a “settlor” or a “grantor.” This is especially true in older trust documents that may use more archaic legal language.


The “trustee,” on the other hand, is the person or entity that manages the trust. This includes making sure payments to the beneficiary are made in accordance with the trust and dealing with the day-to-day management of the trust. The trustee makes sure that the trustor’s wishes are carried out. Usually, the trustee is a different party than the trustor, but it is possible for the trustor and trustee to be the same entity.


The “beneficiary” is the person or entity that the trust is set up to benefit (i.e. pay). They are named in the trust document and receive payouts, property, or other benefits as outlined in trust documents.

Requirements to Set Up a Trust in Maryland

Setting up a trust has some key steps and things that need to be done. First, you need to take one of the steps under Maryland law that creates a trust. Second, you must make what is called a “declaration of trust.”

Decide What You Want the Trust to Accomplish

The first thing you need to do when setting up a trust does not involve much law at all. You need to have an idea of what you want the trust to accomplish. Perhaps you want to create a fund to care for a loved one in the event you pass away, or maybe you want to put a property in trust for beneficial tax purposes. Whatever the reason you are setting up a trust, it is a good idea to have a basic grasp of what you want to accomplish before you start the process.

Declaration of Trust

A declaration of trust is the official document or statement that creates the trust. In Maryland, trusts do not need to be in writing per Md. Code, Ests. & Trusts Art., § 14.5-406. A declaration can be made orally or in writing. However, our lawyers emphasize that you have some kind of document denoting the creation of a trust to help support its existence, as an oral trust needs a higher level of evidence to prove it exists if it ever gets challenged. It is important to remember that a declaration of trust does not itself create a trust. It merely proclaims its existence.

Creation of a Trust

There are a couple of ways to create a trust in Maryland, which are outlined in Md. Code, Ests. & Trusts Art., § 14.5-401.

The first way to create a trust is for a trustor to transfer property to a trustee. For example, if you transfer $100 to your friend “in trust” for a purpose and the recipient accepts that property, a trust is created. It is important to remember that the recipient/trustee must accept the property for a trust to be created.

Another way to create a trust is for a property owner to declare that they hold certain property in trust. Again, this is best solidified in writing so that there is no dispute that a trust has been created.

Finally, exercising a power of appointment creates a trust. This means that the trustee did some action that was within their powers as trustee. For example, if a trust lets the trustee invest money as they see fit, and the trustee then invests the money, they would be exercising a power of appointment.

Call Our Maryland Estate and Trusts Attorneys Today

Rice, Murtha & Psoras’ Baltimore estate and trusts attorneys at the number (410) 694-7291 for a free case review.