Bill > HB185

This bill amends Maryland's Estates and Trusts law to clarify the treatment of Spousal Lifetime Access Trusts, which are irrevocable trusts established for the benefit of a spouse during their lifetime, with provisions for the original creator to potentially benefit after the spouse's death through a power of appointment. Specifically, the bill clarifies that an individual who creates such a trust will not be considered the "settlor" (the person who creates and funds the trust) with respect to their interest in the trust under certain conditions, including when the trust is irrevocable, benefits the spouse during their lifetime, and allows the creator to be a beneficiary after the spouse's death via a power of appointment. This distinction is important because it generally protects the trust assets from the creator's creditors and prevents the creator from being taxed on the trust's income as if they still owned the assets. The bill also clarifies that creditors cannot access assets in these trusts or other trusts funded by them, with an exception for fraudulent transfers. This legislation is set to take effect on October 1, 2026.

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https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0185?ys=2026RS