MarylandSB 00192025 Regular SessionSenateWALLET

Estates and Trusts - Compensation of Guardians of Property and Trustees

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 0 benefits, 0 costs, 3 mixed.

Set guardian fees with Medicaid limits

Beginning October 1, 2025, Maryland sets fees guardians receive for managing another person's property. Guardians charge income 6% on collections from real estate, ground rents, and mortgages. Other yearly income carries tiered fees: 6.5% of the first $10,000, 5% of the next $10,000, 4% of the next $10,000, and 3% above that. Yearly fees on principal—the assets being managed—are 0.40% of the first $250,000, 0.25% of the next $250,000, 0.15% of the next $500,000, and 0.10% above $1 million. These principal fees are paid from principal at year-end, or prorated when guardianship ends for all or part of the assets. Real estate and leasehold sale fees come from sale proceeds at applicable court or statutory rates; comparable local rates apply outside Maryland. Closing the guardianship generally adds a fee of 0.5% of the fair value of principal distributed, subject to court adjustment. Guardian pay is capped at $50 monthly for Maryland Medicaid long-term care recipients whose income falls under the specified patient-income rules. A court can allow more for unusual circumstances. Guardians seeking higher fees must petition the local court and notify interested parties; related legal and court costs come from their fees. The income and principal commission rules apply to accountings from July 1, 1981, regardless of when the guardianship began.

Trust expenses reduce income or principal

Beginning October 1, 2025, Maryland clarifies which trust costs reduce current income and which reduce principal—the assets held for later. Regular trustee, investment-adviser, and custody fees are charged to principal to the extent the trustee finds fair and reasonable. Trustee fees calculated outside the statutory methods can also be allocated to principal. Costs for accountings, court proceedings, and matters involving both income and future beneficiaries are split equally between income and principal. Principal also pays asset-based acceptance, distribution, and termination fees; sale-preparation costs; debt principal; and proceedings mainly concerning trust assets. Other principal charges include covered insurance premiums, estate and inheritance taxes, other transfer taxes, and related penalties. Environmental assessments, cleanup, monitoring, penalties, third-party claim defense, and related collection or compliance costs also fall on principal. Third-party reimbursements go to principal unless they replace lost income. For certain expenses, principal charges are limited to amounts not reimbursed by third parties. These rules determine which beneficiaries bear costs, rather than setting the total fees.

Trustee fees with beneficiary review rights

Beginning October 1, 2025, trustees receive statutory commissions unless a valid agreement sets different pay. Courts can adjust compensation and award extra pay for unusual services. Courts can also change agreed pay when duties differ substantially from expectations or the amount is unreasonably high or low. Reasonableness depends on the trust's assets, risks, work, time, outside services, trustee skills, results, and trust terms. Trustees may also receive reasonable pay for other trust administration services. Supervised financial institutions, U.S. instrumentalities, and Maryland lawyers can use filed higher-rate schedules, with notice to qualified beneficiaries. Other individual trustees need circuit-court approval after giving notice. Savings and loan associations file with the state savings and loan director; other trustees file with the Commissioner of Financial Regulation. Court-administered trusts also use the trust court clerk filing process. Failure to file or give required notice limits pay to statutory base rates. Qualified beneficiaries can notify the trustee and petition the circuit court to review rates. Rates found unreasonable for the current fiscal year are limited to the prior fiscal year's rates. Related legal and court costs come from the trustee's fees, not separate charges to the trust or interested parties. These rate-schedule rules do not apply to guardians.

Sponsors & Cosponsors

Sponsor

Chris West
Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 173 • No: 0

House vote • 4/1/2025

Third Reading Passed

Yes: 129 • No: 0 • Other: 6

Senate vote • 2/13/2025

Third Reading Passed

Yes: 44 • No: 0 • Other: 2

Actions Timeline

Approved by the Governor - Chapter 223
4/22/2025
Returned Passed
4/2/2025Senate
Third Reading Passed (129-0)
4/1/2025House
Favorable Adopted Second Reading Passed
3/31/2025House
Favorable Report by Judiciary
3/31/2025House
Referred Judiciary
2/14/2025House
Third Reading Passed (44-0)
2/13/2025Senate
Second Reading Passed
2/11/2025Senate
Favorable Adopted
2/11/2025Senate
Favorable Report by Judicial Proceedings
2/10/2025Senate
Hearing 1/23 at 1:00 p.m.
1/9/2025Senate
First Reading Judicial Proceedings
1/8/2025Senate
Pre-filed
10/19/2024Senate

Bill Text

Enacted
4/22/2025
PDF
Third Reading
2/11/2025
PDF
First Reading
1/8/2025
PDF

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