Spendthrift Trusts in Maryland in MD — Estate… | CGMIMM
Estate Planning · MD
Spendthrift Trusts in Maryland
Maryland spendthrift trusts protect inheritance from beneficiary's creditors, divorces, and bad spending — by limiting beneficiary's right to transfer + restricting creditor access to assets in trust.
Published May 9, 2026
## Spendthrift trusts in Maryland
**Spendthrift trusts** protect a beneficiary's inheritance from creditors, divorces, lawsuits, and the beneficiary's own poor spending. Maryland spendthrift trusts are widely recognized + provide significant asset protection across generations.
## How spendthrift trusts work
**Basic mechanism:**
**Restrict beneficiary's rights:**
- Cannot transfer interest
- Cannot pledge as collateral
- Cannot anticipate distributions
- Specific to ${s.name}
**Restrict creditor access:**
- Cannot reach trust assets
- Cannot reach future distributions
- Limited exceptions
- Specific to ${s.name}
**Trustee discretion:**
- Distributions at trustee's discretion
- Specific to standards
- Specific procedures
- Specific to circumstances
## Common uses
**Protecting beneficiaries:**
**Improvident beneficiaries:**
- Bad spenders
- Substance abusers
- Specific to circumstances
- Long-term protection
**Beneficiaries with creditors:**
- Bankruptcy issues
- Specific creditors
- Specific to circumstances
- Specific procedures
**Beneficiaries in divorce:**
- Spouse cannot reach inheritance
- Specific to ${s.name}
- Specific procedures
- Specific to circumstances
**Beneficiaries with lawsuits:**
- Plaintiffs cannot reach
- Specific to ${s.name}
- Specific procedures
- Specific to circumstances
**Special needs:**
- Different from special needs trust
- Some overlap
- Specific procedures
- Specific to circumstances
**Multi-generational protection:**
- Continuing protection
- Specific to grantor's wishes
- Specific procedures
- Specific to circumstances
## ${s.name}-specific rules
**Common acceptance:**
- ${s.name} recognizes spendthrift trusts
- Specific to ${s.name}
- Specific procedures
- Specific to circumstances
**Specific limitations:**
- ${s.name}-specific
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
## Self-settled vs third-party
**Critical distinction:**
**Third-party spendthrift (most common):**
- Created by someone else for beneficiary
- Beneficiary did not contribute assets
- Almost universally enforceable
- Strong protection
- Standard estate planning
**Self-settled spendthrift (controversial):**
- Created by beneficiary ("DAPT" — Domestic Asset Protection Trust)
- See asset protection guide
- Limited states allow
- Specific procedures
- Limited enforceability
**Most spendthrift trusts are third-party.**
## Limitations on protection
**Spendthrift trusts CANNOT protect from:**
**Federal tax liens:**
- IRS can reach distributions
- Specific procedures
- Specific to circumstances
- Limited applicability
**Child support / alimony:**
- Most states allow access
- Specific procedures
- Specific to ${s.name}
- Specific to circumstances
**Bankruptcy court (limited):**
- Specific exceptions
- Specific procedures
- Specific to circumstances
- Specific to chapter
**Some governmental claims:**
- Specific to type
- Specific procedures
- Specific to circumstances
- Limited
**Necessities of life (some states):**
- Specific to ${s.name}
- Limited
- Specific to circumstances
- Specific procedures
## Trust language essentials
**Strong spendthrift provision:**
**Specific language:**
- "Spendthrift" specifically used
- Specific to anticipation
- Specific to alienation
- Specific to attachment
**Sample language:**
- "No beneficiary shall have power to anticipate, encumber, or transfer his or her interest"
- "Trust assets shall not be subject to claims of creditors"
- Specific to ${s.name}
- Specific procedures
**Specific protective provisions:**
- Trustee discretion
- Distribution standards
- Specific to circumstances
- Specific procedures
## Discretionary trusts
**Often combined with spendthrift:**
**Trustee has discretion:**
- When to distribute
- How much to distribute
- Specific to needs
- Specific procedures
**Stronger protection:**
- No specific entitlement
- Specific to standards
- Specific procedures
- Specific to circumstances
**Hamilton orders:**
- Some states allow creditor force distribution
- Specific to circumstances
- Specific procedures
- Specific to ${s.name}
## Trustee selection
**Critical for spendthrift:**
**Independent trustee preferred:**
- Not beneficiary
- Not closely related
- Specific procedures
- Specific to circumstances
**Corporate trustee benefits:**
- Independence
- Specific procedures
- Continuing oversight
- Specific to ${s.name}
**Specific considerations:**
- Specific to family dynamics
- Specific to circumstances
- Specific procedures
- Specific to ${s.name}
## Distribution standards
**Common standards:**
**HEMS (Health, Education, Maintenance, Support):**
- IRS-recognized standard
- Specific to circumstances
- Specific procedures
- Specific to ${s.name}
**Specific events:**
- Marriage
- Specific birthdays
- Specific milestones
- Specific to grantor's wishes
**Periodic distributions:**
- Specific intervals
- Specific procedures
- Specific to circumstances
- Specific to needs
**Sole discretion:**
- Trustee determines
- Specific procedures
- Specific to circumstances
- Stronger protection
## Income vs principal
**Different protections:**
**Income:**
- Often protected
- Specific to ${s.name}
- Specific procedures
- Specific to circumstances
**Principal:**
- Often more protected
- Specific to ${s.name}
- Specific procedures
- Specific to circumstances
**Specific to ${s.name}:**
- Specific procedures
- Specific to circumstances
- Specific to type
- Specific protection
## Domestic asset protection trust comparison
**See asset protection guide:**
**Self-settled:**
- Beneficiary contributes
- Limited states allow
- Specific procedures
- Limited enforceability
**Third-party:**
- Someone else contributes
- Almost universally enforceable
- Standard estate planning
- Strong protection
**Strategic differences:**
- Specific to circumstances
- Specific procedures
- Specific to ${s.name}
- Specific to goals
## Tax implications
**Specific considerations:**
**Income tax:**
- Specific to grantor
- Specific to beneficiary
- Specific procedures
- Specific to ${s.name}
**Estate tax:**
- Specific to inclusion
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
**Generation-skipping tax:**
- Specific procedures
- Specific to circumstances
- Specific to multi-generational
- Specific to ${s.name}
**Gift tax:**
- Specific to creation
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
## Common scenarios
**Inheritance protection:**
- Adult children's inheritance
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
**Business succession:**
- See business succession guide
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
**Special needs:**
- See special needs trust guide
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
**Multi-generational planning:**
- See estate tax planning guide
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
## Drafting considerations
**Key provisions:**
**Spendthrift clause:**
- Specific language
- Specific to ${s.name}
- Specific procedures
- Specific protection
**Trustee provisions:**
- Selection
- Powers
- Specific procedures
- Specific to ${s.name}
**Distribution standards:**
- HEMS or other
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
**Beneficiary provisions:**
- Specific to circumstances
- Specific procedures
- Specific to ${s.name}
- Specific to needs
**Termination provisions:**
- Specific events
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
**Modification provisions:**
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
- Specific provisions
## Costs
**Setup:**
- $1,500-$5,000+ typical
- Specific to complexity
- Specific to circumstances
- Specific to ${s.name}
**Ongoing:**
- Trustee fees
- Specific procedures
- Specific to circumstances
- Specific to ${s.name}
**Tax preparation:**
- Specific to circumstances
- Specific procedures
- Specific to ${s.name}
- Specific costs
## What you should do
If considering spendthrift trust in Maryland: hire estate-planning attorney experienced with asset protection. Most Maryland estate-planning attorneys handle spendthrift trusts. Specific to circumstances + goals. Specific procedures critical for protection. Update with life changes.
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*This guide is general information about Maryland law as of mid-2026 and is not legal advice. Spendthrift trusts are technical. Talk to a licensed Maryland estate-planning attorney about your specific situation.*
This guide is for general information only and does not constitute legal advice. Laws change and outcomes depend on your specific situation — talk to a licensed attorney before acting on anything you read here.