WeVote
Log In

Bill

Bill

HB 1345

Maryland Trust Act - In Terrorem Clause - Void

2026 Regular Session Introduced by Jon Cardin and 1 co-sponsor

In terrorem penalties in Maryland trusts are void if there’s probable cause to contest the trust or related proceedings, applying prospectively from July 1, 2026.

Approved by the Governor - Chapter 502
0
WeVote Research Nonpartisan
Bill Summary · HB 1345

Summary of HB 1345 (2026) — Maryland Trust Act: In Terrorem Clause Void

Purpose and intent

HB 1345, introduced by Delegates Cardin and Taylor and assigned to the Judiciary Committee, establishes that certain in terrorem (penalty) clauses within trusts are void when there is probable cause to initiate proceedings related to the trust or estate. The bill amends the Maryland Trust Act to protect interested persons who contest a trust or pursue related estate matters from clauses that impose penalties on such actions.

Key provisions

  • New provision added: Annotated Code of Maryland, Estates and Trusts, § 14.5–113.
    • A trust provision that purports to penalize an interested person for contesting the trust or for initiating other proceedings relating to the estate is void if there is probable cause to institute such proceedings.
  • Prospective application: The act applies only to actions and causes arising on or after the effective date; it cannot be applied retroactively to pre-existing causes of action.
  • Effective date: July 1, 2026.

What the bill changes

  • Clarifies that in terrorem clauses targeting beneficiaries or interested parties who challenge a trust or pursue related legal actions are unenforceable when there is probable cause to initiate proceedings.
  • Aligns treatment of trust-related in terrorem penalties with similar provisions already in wills (in terrorem clauses) under Maryland law, but specifically extends this protection within the Maryland Trust Act framework.

Who is affected

  • Interested persons and beneficiaries of trusts governed by Maryland law: they would be protected from punitive clauses that deter contesting or initiating proceedings about the trust.
  • Trustees and settlors: While still able to administer trusts, they cannot rely on in terrorem penalties to deter legitimate challenges when probable cause exists.
  • The change affects trusts created, amended, or administered under Maryland law and monitored by Maryland courts (including the Orphans' Court system).

Procedural and timeline aspects

  • Effective date: July 1, 2026.
  • Scope of application: Prospective only; no retroactive effect on pre-existing causes of action.
  • Relation to existing law: Mirrors the concept of in terrorem protections found in wills (§ 4-413) but applies within the Maryland Trust Act context.

Fiscal and administrative note

  • The fiscal note indicates no material impact on state or local finances, and no anticipated effect on small businesses.

Additional context

  • The bill has undergone standard committee consideration and has received approvals through the legislative process, including a Third Reading. The sponsors are Delegates Cardin and Taylor, with Cardin also serving as a co-sponsor.

This summary provides a concise overview of HB 1345’s objective to void in terrorem clauses in trusts when probable cause exists to contest the trust or related estate proceedings, applicable prospectively from July 1, 2026.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.