Can a Non-United States Citizen Serve as a Trustee for a Maryland Trust?

The short answer is yes. Maryland law does not require that a trustee to be a U.S. citizen. According to the Maryland Trust Act, there are only four requirements for a person to qualify as a trustee: They must be 18 years of age, willing to accept the appointment, competent to act within the role, and capable of fulfilling fiduciary responsibilities.

The key issue here is residency. Maryland law allows nonresidents to serve as trustees, but doing so can complicate the administration of the trust. A trustee who lives abroad may have difficulties accessing U.S. financial institutions, receiving and responding to court notices, or managing trust assets, like real estate. In addition, they may have trouble obtaining a U.S. Taxpayer Identification Number, which is necessary for opening accounts, reporting income, and fulfilling tax obligations.

Also, if the trustee lives outside the United States, Maryland courts may require a resident agent to be appointed. This is a person or entity located in Maryland who is authorized to receive legal notices and court documents on behalf of the trustee.

Another consideration: the fiduciary bond. Some wills and trusts waive the trustee’s bond requirement, but if a bond is required, a non-U.S. citizen may have difficulty securing a bond. Most bond companies require strong credit history, U.S. identification, or U.S. residency. If the individual cannot meet these underwriting standards, the trust may need to appoint a co-trustee to satisfy Maryland legal requirements.

Tax compliance could be another hurdle. A trustee who is unfamiliar with U.S. tax law or lacks access to U.S. banking systems may struggle with common responsibilities, like filing federal Form 1041, income tax returns for the trust, and the issuance of annual K-1 forms to beneficiaries.

Again, a non-U.S. citizen can be a trustee of a Maryland trust, but the practical considerations should not be overlooked. For a free consultation to discuss estate planning, contact Maryland attorney Stephen J. Reichert at 410-299-4959 or sreichert@reichertlegal.com.

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