5.1 Validity in General
The Court of Appeals “has held that exculpatory clauses are valid, and will be enforced according to their tenor, with certain limitations.” Attorney Grievance Comm’n v. Owrutsky, 322 Md. 334, 350 (1991) (Citing Sullivan v. Mosner, 266 Md. 479 (1972)).
5.1.1 In Helman v. Mendelson, 138 Md. App. 29, 37 (2001), the Court recognized that an exculpatory clause is a restriction on the rights of beneficiaries in favor of the trustee:
Although Alfred did not specifically authorize loans to trustees who were also beneficiaries of the trust, he explicitly elevated the beneficiaries’ interests over the rules governing trust investment by the exculpatory provision of the trust. This form of exculpatory clause is designed to protect the trustees who act in the interests of the beneficiaries when that act may be contrary to the law of trust governing certain types of investment. In Maryland, exculpatory clauses are generally deemed to be valid and enforceable.
5.1.2 An exculpatory clause limits a fiduciaries personal liability: “Exculpatory clauses are different from provisions in a will that enlarge upon the general powers of a personal representative … For example, a testator may wish to authorize a personal representative or a testamentary trustee to invest in securities that might be too risky to qualify under the ‘prudent person rule … Such a clause would enlarge the powers of the personal representative beyond those specified by statute and thereby prevent the exercise of such powers from resulting in a breach of fiduciary duty. In contrast, an exculpatory clause relieves a personal representative from breaches of duty, however narrowly or broadly defined.” Godette v. Estate of Cox, 592 A.2d 1028, 1033 in Note 11 (D.C. App. 1991).