Using See-Through and Marital Trusts for IRAs in Maryland Estate Planning


If you have a substantial retirement account, you may be wondering: How can I protect those assets for my loved ones while minimizing taxes?

In Maryland, where estate planning often involves blended families, second marriages, and creditor concerns, trust planning for IRAs can be a powerful strategy. But it must be done carefully to avoid triggering unnecessary income taxes or losing the benefits of tax deferral.

This article explains how see-through trusts and marital trusts (like QTIPs) can be used to hold IRAs in Maryland, and when they make sense in your estate plan.


The Problem with Leaving IRAs Outright


If you name your spouse or child directly as the beneficiary of your IRA:

  • They receive the funds outright.
  • The account may be exposed to divorce, creditors, or spending issues.
  • Under the SECURE Act, non-spouse beneficiaries must fully withdraw inherited IRAs within 10 years, potentially facing high income taxes.


For many Maryland families, especially those with large IRAs or vulnerable heirs, this one-size-fits-all approach isn’t ideal.


Can You Leave an IRA to a Trust?

Yes—but there are traps.


The IRS treats trusts differently than individuals when it comes to inherited IRAs. If the trust isn’t drafted properly, it may:

  • Lose the ability to stretch distributions
  • Trigger the 5-year rule (accelerated distribution)
  • Face compressed trust tax brackets (37% on just $15,000 of income in 2025)

To avoid this, you must use a qualified see-through trust.


What Is a See-Through Trust?


A see-through trust is a trust that qualifies under IRS rules to be treated like an individual for purposes of required minimum distributions (RMDs) after your death.


To qualify, the trust must:

  1. Be valid under state law.
  2. Be irrevocable at your death.
  3. Have identifiable beneficiaries.
  4. Provide a copy of the trust to the IRA custodian by October 31 of the year after your death.


There are two main types:

  • Conduit Trust
  • Accumulation Trust


⚠️ With both trust types, the 10-year payout rule generally applies to non-spouse beneficiaries under the SECURE Act. But trusts can still provide control and protection even if tax deferral is limited.


Using a Marital (QTIP) Trust for an IRA in Maryland


If you're married and want to provide income for your spouse—while ultimately passing assets to children—you can name a Qualified Terminable Interest Property (QTIP) Trust as the IRA beneficiary.

To preserve tax benefits:

  • You must elect QTIP treatment on a spousal rollover or inherited IRA.
  • The trust must qualify as a "see-through trust".
  • The surviving spouse must be the sole income beneficiary.

Benefits:

  • Spouse gets income for life.
  • Children inherit what's left.
  • Allows control if remarriage or blended families are a concern.
  • Can preserve Maryland estate tax exemption via a Clayton election or state QTIP trust.


Key Considerations in Maryland

  1. Maryland estate tax kicks in at $5 million (2025). A marital trust can defer estate taxes until the second spouse’s death and preserve both spouses’ exemptions with careful planning.
  2. Naming a trust as IRA beneficiary requires precision. The trust must meet federal requirements, even if it follows Maryland law.
  3. Maryland has adopted the Uniform Trust Code, making it easier to administer and modify irrevocable trusts if needed—but only if drafted properly from the start.

Example Scenarios

✅ Case 1: Blended Family with Large IRA

David, 68, has a $700,000 IRA and is remarried. He wants his wife to receive income but wants the remainder to go to his children from a first marriage.

Solution: Name a QTIP trust as IRA beneficiary. Surviving spouse receives income; remainder to kids. Avoids outright gift and allows estate tax planning.


✅ Case 2: Child with Disabilities

Sarah, a single mom, has a $400,000 IRA and a disabled adult son receiving SSI.

Problem: Leaving the IRA outright could jeopardize public benefits.

Solution: Use a see-through supplemental needs trust as IRA beneficiary to preserve benefits and control distributions.


Don’t Leave Retirement Assets to Chance

Retirement accounts are often the largest assets in an estate, but they come with unique rules. If you don’t plan carefully:

  • Your loved ones could lose out on tax benefits.
  • Your IRA could be spent quickly—or taxed heavily.
  • Maryland estate tax exemptions could be wasted.

With the right trust structure, you can protect the account, control its use, and still provide for your family’s future.



🛡 Want to protect your IRA with a smart trust strategy?


At Bona Fide Estates LLC, we help Maryland families structure trusts that qualify under IRS rules while aligning with your long-term goals.

Schedule a consultation to learn how a see-through or marital trust could fit into your estate plan.


🔒 Disclaimer

This post is for informational purposes only and does not constitute legal advice. Always consult a Maryland estate planning attorney about your specific situation. Attorney Advertising.


07/2025

Avoiding Probate in Maryland: 5 Proven Strategies for Homeowners

You worked hard to build your home and legacy. But without the right legal tools in place, your family could face months of court delays, legal fees, and public proceedings—just to receive what you intended to leave them.


In Maryland, even if your home has a mortgage, its full value is counted toward probate. The result? A home worth $500,000 (with $400,000 owed) could trigger thousands in court and legal fees.


The good news? You can take steps right now to reduce or avoid probate altogether. Here are five proven strategies for Maryland homeowners to protect their families and pass down their assets more efficiently.



✅ 1. Create a Revocable Living Trust


The most comprehensive way to avoid probate in Maryland is by creating a revocable living trust and transferring your home and other assets into it.


Here’s how it works:

  • You (the “grantor”) create a trust and name yourself as trustee.
  • You retitle your home and assets into the trust’s name.
  • Upon your death, the trust continues privately—without court involvement—and your successor trustee distributes assets according to your instructions.


Benefits:

  • Avoids probate completely
  • Speeds up inheritance
  • Keeps your plan private
  • Useful if you own property in multiple states
⚠️ Note: A trust must be properly funded (assets retitled) to work. Simply signing a trust document without changing asset titles won’t avoid probate.

✅ 2. Use Maryland’s Tenants by the Entirety (TBE) Protection


If you're married and own your home jointly with your spouse, titling the property as "tenants by the entirety" allows the surviving spouse to automatically inherit the home outside of probate.


Key facts:

  • Available only to married couples
  • Property passes by operation of law
  • Still subject to probate after second spouse’s death unless trust planning is in place


This is a great short-term strategy for couples—but shouldn’t be your only solution and has its downsides.


✅ 3. Add a Transfer-on-Death (TOD) Deed (Where Available)


While Maryland does not currently allow full transfer-on-death deeds for real estate (unlike some other states), certain financial accounts—such as bank accounts, retirement accounts, and investment accounts—can be set up with TOD or POD (payable on death) designations.


Make sure to:

  • Review all account titles and beneficiaries
  • Update designations after marriage, divorce, or births
  • Coordinate these accounts with your overall estate plan to avoid unintended conflicts


✅ 4. Consider Maryland’s Small Estate Process


Maryland offers a simplified probate process for “small estates,” which can be helpful if you plan in advance.

As of 2025, the small estate threshold is:

  • $50,000 in assets if no surviving spouse
  • $100,000 if the spouse is the sole heir

If your estate is close to this limit, you may be able to structure your plan to qualify for this expedited process, reducing court costs and time.


💡 Tip: Naming beneficiaries or placing assets into a trust can help reduce your probate estate to qualify for the small estate process.

✅ 5. Lifetime Gifting (Used Carefully)


Another way to reduce the size of your probate estate is by giving away assets during your lifetime. Maryland does not currently have a state gift tax, and the federal annual gift tax exclusion for 2025 is $18,000 per recipient.


Common lifetime gifts:

  • Cash gifts to children or grandchildren
  • Adding a trusted adult child to a bank account (with caution)
  • Paying medical or tuition expenses directly
⚠️ But beware: Lifetime gifts can trigger Medicaid look-back periods or unwanted tax consequences. Always consult with a qualified estate planning attorney before transferring ownership of real estate or high-value assets.

Don’t Leave Probate to Chance


Probate in Maryland can last 12–18 months, cost thousands in fees, and create stress and confusion for grieving families. By acting now, you can create a plan that avoids the hassle and protects what you’ve worked for.


📍 At Bona Fide Estates LLC, we help Maryland families create trust-based estate plans that simplify inheritance, avoid probate, and protect future generations.


👉 Ready to take the next step?


Schedule a consultation today and learn how we can help you avoid probate with a plan tailored to your life, your home, and your family.


🔒 Disclaimer:

This article is for informational purposes only and does not constitute legal advice. Always consult with a licensed Maryland attorney about your specific legal situation. Attorney Advertising.


07/2025


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Estate Planning for New Maryland Parents: What You Need to Do Now

You just welcomed a new child into your life. Between diapers, daycare, and sleepless nights, estate planning may be the last thing on your mind.


But if you’re a Maryland parent, now is the time to put legal protections in place—for your child, your assets, and your peace of mind.


Here’s what every parent should do.


1. Name Guardians for Your Children


A will is the only way to legally name a guardian for your minor child in Maryland.


If you don’t, a judge—who doesn’t know your values or your family—will make that choice for you.


💡 Choose someone who shares your parenting style and is willing and able to serve.


2. Create a Will or Revocable Trust


A will lets you name beneficiaries and guardians. A revocable trust can also:


Avoid probate


Hold money for minor children


Give your trustee discretion to manage inheritance responsibly


Most parents don’t want an 18-year-old to receive $500,000 outright. A trust solves that.


3. Set Up a Children’s Trust (Pot Trust)


A “common pot trust” or “children’s trust” allows you to:


Keep assets together until your youngest child reaches a certain age (often 25)


Provide for education, healthcare, and support along the way


Appoint a trusted person to manage funds


4. Update Beneficiary Designations


Review your:


Life insurance


Retirement accounts


Bank accounts


Don’t name minors directly—they can’t legally receive the money. Instead, name your trust as the contingent beneficiary.


5. Sign Powers of Attorney & Advance Directives


Estate planning isn’t just about death. If you’re ever in an accident or hospitalized:


A Power of Attorney lets someone handle bills or childcare


An Advance Directive names someone to make medical decisions


This is critical for young families where one spouse may not work—or decisions must be made fast.


Parenthood Comes With Responsibility—And Opportunity


Estate planning isn’t just a task. It’s an act of love that protects your child’s future if the unthinkable happens.



At Bona Fide Estates LLC, we help new parents throughout Maryland build clear, caring plans that grow with your family.


👉 Start your family’s plan today. Book a consultation.


🔒 Disclaimer

This post is informational only and not legal advice. Every family is different. Speak with a Maryland estate planning attorney for personalized guidance. Attorney Advertising.


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