Legal Question in Wills and Trusts in Maryland

Re: protecting trust assets from creditors

Under Maryland law, property placed in an irrevocable trust with a binding "spendthrift clause" (protecting it from attachment by the beneficiaries' creditors) is ordinarily not available to satisfy debts of the person who created the trust -- as long as those debts arose after the property was placed in trust. However, if property is transferred after the debt is incurred the creditor may be able to have the transfer set aside as a "fraudulent conveyance," especially if the purpose of establishing the trust is to protect assets from the claims of creditors.

Beneficiaries do not need to be informed of a trust's creation, but the trustee named in the trust agreement must accept the trust.

Creation of a trust under the circumstances you describe has substantial risks of loss of the trust assets and other consequences, and should not be attempted without the guidance of a competent attorney.