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MarylandHB 00272025 Regular SessionHouseWALLET

Estates and Trusts - Compensation of Guardians of Property and Trustees

Sponsored By: Jon S. Cardin (Democratic)

Signed by Governor

Estates and TrustsCourts -see also- AppCt; Circuit; District; Orphans'; etc.Estates and Trusts -see also- BeneficiariesFees -see also- Attys' Fees; Devt Fees & TaxesGoods and Services -see also- Retail Sales; TermnSvc; TrfGdsReal Estate -see also- Agents and BrokersSalaries and Compensation -see also- Overtime; Reimb. Rates

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 0 benefits, 0 costs, 4 mixed.

Guardian fees retain rates and caps

Beginning October 1, 2025, Maryland preserves guardian fee schedules tied to accounting from July 1, 1981. Fees come from the property or income under guardianship. Guardians receive 6% of income from real estate, ground rents, and mortgages. Other annual income carries fees of 6.5% on the first $10,000, 5% on the next $10,000, 4% on the next $10,000, and 3% above that. Annual fees on principal—the managed property—are 0.4% on the first $250,000, 0.25% on the next $250,000, 0.15% on the next $500,000, and 0.1% above that. Fees for any portion ending during the year are prorated and charged against remaining principal at termination. Property-sale fees follow applicable court rates and come from proceeds when collected. For property outside Maryland, rates follow similar property in the county where the trust is administered. Final distribution work carries a 0.5% fee on the fair value distributed, unless a court revises it for special circumstances. A $50 monthly cap applies to guardians of disabled people receiving Maryland Medicaid long-term care whose income falls under its care-payment rules. Exceeding that cap requires a court finding of unusual circumstances. Courts can change guardian compensation only after an interested person's petition and a finding of unusual circumstances; requests for increases require notice to interested parties. A guardian's legal and court costs for compensation review come from the guardian's fees, not directly from the estate or beneficiaries.

Higher trustee fees face beneficiary challenges

Beginning October 1, 2025, eligible trustees can file schedules allowing higher fees, which must remain reasonable for the trust. Eligible trustees include supervised financial institutions, U.S. government entities, and Maryland lawyers. Savings and loan associations file with the State Director; other eligible trustees file with the Commissioner of Financial Regulation. Trustees managing court-supervised estates must also file with the court's trust clerk. The controlling schedule belongs to the trustee holding the assets and keeping the trust records. Trustees must notify qualified beneficiaries of new rates and explain how to object. After notifying the trustee of an objection, qualified beneficiaries can ask the circuit court to review the current fiscal year's rates. If those rates are unreasonable, that trust's commissions for the year are limited to the prior fiscal year's rates. Trustees who fail to file or provide notice remain limited to base statutory compensation. Individual trustees not otherwise eligible to file can seek court approval after notifying qualified beneficiaries.

Trust costs shift between beneficiary groups

Beginning October 1, 2025, covered trustee pay, investment advice, and custody fees are split equally between trust income and principal. Principal means the underlying trust assets, rather than their income. Shared accounting, court, and related expenses involving both income recipients and later beneficiaries receive the same 50–50 split. Depending on how regular trustee pay is calculated, principal can pay all or part, subject to a fair-and-reasonable standard. Principal can also pay covered ordinary expenses, acceptance and distribution fees, termination fees, debt payments, taxes, and insurance premiums. Covered environmental costs include cleanup, related legal and regulatory work, penalties, and third-party claims. Principal pays these covered costs only to the extent third parties have not reimbursed them. Charging principal can preserve current income payments but reduce assets left for later beneficiaries; the split does not itself set total fees.

Trustee pay must meet reasonableness rules

Beginning October 1, 2025, trustees receive reasonable pay when the trust sets no fee, including pay for related services. Trust terms generally control stated fees, and valid agreements can govern the amount and source of payment. Courts can change stated fees when duties differ greatly from expectations or the fee is unreasonably high or low. They weigh property value and type, risk, responsibility, time, service quality, market rates, skills, results, and trust terms. Courts also retain authority to adjust commissions for sufficient cause and award extra pay for unusual services. A trustee's legal and court costs for compensation review come from the trustee's fees, not directly from the trust or beneficiaries.

Sponsors & Cosponsors

Sponsor

  • Jon S. Cardin

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 182 • No: 0

Senate vote • 4/2/2025

Third Reading Passed

Yes: 47 • No: 0

House vote • 2/20/2025

Third Reading Passed

Yes: 135 • No: 0 • Other: 3

Actions Timeline

  1. Approved by the Governor - Chapter 224

    4/22/2025

  2. Returned Passed

    4/2/2025House

  3. Third Reading Passed (47-0)

    4/2/2025Senate

  4. Favorable Adopted Second Reading Passed

    3/27/2025Senate

  5. Favorable Report by Judicial Proceedings

    3/27/2025Senate

  6. Referred Judicial Proceedings

    2/21/2025Senate

  7. Third Reading Passed (135-0)

    2/20/2025House

  8. Favorable Adopted Second Reading Passed

    2/18/2025House

  9. Favorable Report by Judiciary

    2/17/2025House

  10. Hearing 1/22 at 1:00 p.m.

    1/10/2025House

  11. First Reading Judiciary

    1/8/2025House

  12. Pre-filed

    10/31/2024House

Bill Text

  • Enacted

    4/22/2025

    PDF

  • Third Reading

    2/18/2025

    PDF

  • First Reading

    1/8/2025

    PDF

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