Why Trust Funding Matters for Maryland Families

What Happened

A Maryland estate planning law firm published a detailed guide in August 2026 addressing one of the most overlooked steps in the estate planning process: funding a revocable living trust. The article, written by associate attorney Kaitlyn Tauber of Liberty Legacy Law Group, explains that creating a trust document is only the beginning. The real work happens when families transfer ownership of their assets into the trust's name.

The piece walks through the mechanics of trust funding across different asset types, including real estate, bank accounts, investment accounts, and personal property. It also identifies the assets that typically remain outside a trust, such as retirement accounts and certain life insurance policies, which pass instead through beneficiary designations. The guide emphasizes that each asset type requires a different transfer method, and that coordination across all asset categories determines whether a trust actually functions as intended.

The article identifies several recurring patterns that cause trust funding to fail in practice. Many families complete their trust documents and assume the plan is finished. Others begin the funding process but leave gaps by transferring only some assets. Still others acquire new property after signing and never align those new assets with the trust. The result in each case is the same: a trust that exists on paper but fails to protect the family when it matters most.

What It Means for Maryland Families

Maryland's probate process makes trust funding especially consequential for residents of the state. Probate here typically runs between 9 monthsMd. Est. & Trusts § 5-601Verified Jul 14, 2026View source and 12 monthsMd. Est. & Trusts § 5-601Verified Jul 14, 2026View source for average estates. During that window, assets remain frozen, family members must navigate court proceedings, and the entire inventory of the estate becomes part of the public record. A properly funded trust bypasses that process entirely. An unfunded trust does not.

The financial stakes are significant as well. Maryland uses a reasonable compensation standard for attorney fees in probate matters, with typical fees running between 2.1%Md. Est. & Trusts § 7-602 (reasonable compensation; no statutory percentage)Verified Jul 14, 2026View source and 3.3%Md. Est. & Trusts § 7-602 (reasonable compensation; no statutory percentage)Verified Jul 14, 2026View source of the estate's value. On a mid-sized estate, that translates to roughly $34,931Md. Est. & Trusts § 7-602 (reasonable compensation; no statutory percentage)Verified Jul 14, 2026View source in attorney fees alone, before accounting for court filing fees, executor commissions, bond premiums, and appraisal costs. Maryland requires executors to post a surety bond in probate proceedings, though a properly drafted will or trust can waive this requirement. Every asset left outside the trust at death becomes subject to these costs and delays.

Maryland's inheritance tax structure adds another layer of complexity that trust funding decisions can affect. Maryland imposes an inheritance tax on transfers to recipients outside a defined circle of close relatives. Spouses, children, grandchildren, parents, grandparents, and siblings all qualify for an exemption. Transfers to nieces, nephews, cousins, friends, and other unrelated individuals face a flat 10% tax on the clear value received. The state also levies a separate estate tax on estates exceeding $5,000,000Md. Tax-Gen. § 7-309Verified Jul 13, 2026View source, with a top rate of 16%Md. Tax-Gen. § 7-309Verified Jul 13, 2026View source. Families with assets above these thresholds benefit from coordinated planning that considers both how assets are titled and how they are distributed. Understanding the distinction between estate tax and inheritance tax is an important starting point for that analysis.

Maryland's small estate procedures offer a partial alternative for modest estates. Personal property with a total value at or below $50,000Md. Est. & Trusts § 5-601Verified Jul 14, 2026View source qualifies for a simplified affidavit process with no waiting period after death. When the surviving spouse is the sole heir or legatee, that threshold rises to $100,000Md. Est. & Trusts § 5-601Verified Jul 14, 2026View source. However, these thresholds capture only a fraction of Maryland estates, particularly for homeowners. Real property counts toward the total, and Maryland home values frequently push estates well above the small estate ceiling. For most families, a funded trust remains the most reliable path around probate.

Maryland does not currently recognize transfer-on-death deeds for real property, which means real estate held in an individual's name alone passes through probate unless it is titled to a trust, held in joint tenancy with right of survivorship, or transferred through another recognized mechanism. This makes the step of transferring a deed into a trust particularly important for Maryland homeowners. A trust that holds the home avoids probate on that asset. A trust that was never funded with the deed does not.

Context from SimplyTrust

Trust funding is the step that transforms a legal document into a working plan. SimplyTrust's guide on what it means to fund a trust breaks down the process in plain language, covering how different asset types transfer and what steps families take after signing. For families who want to understand the full picture before starting, the overview of revocable trusts explains how these structures work, why they avoid probate, and what makes them different from a will.

SimplyTrust also provides a deeper look at why trust funding matters, including the specific consequences families face when assets are left outside the trust at death. For Maryland families navigating the intersection of probate costs, inheritance tax exposure, and asset titling decisions, understanding the full scope of what a funded trust accomplishes is the foundation of an effective plan. The connection between trusts and probate avoidance depends entirely on whether the trust actually holds the assets it is meant to protect.

Source: How to Fund Your Trust (And Why Most People Forget This Step)