Hastings v. PNC Bank, NA.

Petitioners, Barbara Hastings, R. Cort Kirkwood, and Ann K. Robinson are beneficiaries of a testamentary trust who have sued the trustee, Respondent PNC Bank, NA (PNC). Petitioners allege that PNC improperly demanded that each beneficiary execute a broad release agreement prior to distribution and misapplied the provisions of the Maryland Code, *13Tax-General Article,1 in calculating the amount of inheritance tax owed on the trust’s assets and the amount of commission to which PNC was entitled as trustee. The Circuit Court for Baltimore County granted summary judgment in PNC’s favor, finding no legal impropriety in PNC’s distribution plan or its calculation of the tax and commission. Petitioners appealed and the Court of Special Appeals affirmed the Circuit Court in an unreported opinion. We granted certiorari to decide whether PNC’s actions are in accord with Maryland law and, for the reasons that follow, hold that they are. We therefore affirm.

I.

In 1995, Marion W. Bevard executed a Last Will and Testament that directed the disposition of his estate by, in part, providing for the establishment of a trust. The will appointed Mercantile Safe Deposit and Trust Company (Mercantile) to serve as trustee and mandated that the trust be divided into four equal shares. The will granted one of those shares to Marion’s sister, Rebecca “Reba” Bevard, for the duration of her life (the Trust). Following Marion’s death in February 2002, his estate was probated in the Orphans’ Court for Baltimore County. Pursuant to the terms of the will, the personal representative of the estate established the Trust and funded it with a $450,450.98 contribution. Under the terms of the Trust, Reba was to receive income from the Trust as well as discretionary distributions of the Trust principal, for life. Upon her death, the remainder of the Trust was to be distributed to Robert B. Kirkwood and, if he died before Reba, the remainder was to be distributed in equal shares to his descendants. The Trust, therefore, had two components: the life estate created for the benefit of Reba, see § 7-201(c)(2)(i), and the remainder interest, which qualifies as a “subsequent interest” for tax purposes, created for the benefit of Robert B. Kirkwood or his descendants, see § 7-201(e)(l).

*14Robert B. Kirkwood predeceased Reba, who died on October 11, 2007. Therefore, upon Reba’s death, the remainder of the Trust — the subsequent interest — passed to Robert B. Kirkwood’s four children: Petitioners Barbara Hastings, R. Cort Kirkwood, and Ann K. Robinson; and their brother, Robert Garth Kirkwood. Because Reba was the testator’s sister, the income and principal she received through the Trust was not subject to inheritance tax. See § 7-203(b)(2)(vii). Petitioners and their brother, however, inherited as collateral heirs, so they were obligated to pay ten percent (10%) of the value of the assets on the subsequent interest in the Trust.2 The inheritance tax was owed, prior to distribution of the assets to Petitioners and their brother, because the personal representative had not opted to prepay the tax on the subsequent interest, as authorized by § 7-219, at the time the Trust was created.3 Thus PNC, as the successor trustee to *15Mercantile, filed an Application to Fix Inheritance Tax on Non-Probate Assets with the Register of Wills for Baltimore County on December 8, 2007. In its filing, PNC reported that *16the Trust had a fair market value of $261,306.72 on the date of Reba’s death, October 11, 2007. Of that amount, approximately $218,100.00 constituted the remainder of the original $450,450.98 principal contributed by Marion’s estate, and the remaining approximate $42,200.00 was income earned on that principal. To calculate the necessary inheritance tax and commission it was entitled to draw as trustee, PNC used the fair market value of the Trust — $261,306.72. PNC first subtracted a one-half percent final-distribution commission ($1306.53), to which it was statutorily entitled according to § 14-103(e) of the Maryland Code (2001, 2011 RepLVol.), Estates and Trusts Article (ET),4 as well as a separate trustee fee ($366.69). From the resultant difference of $259,633.50, PNC applied the ten percent inheritance tax rate. Consequently, PNC tendered a $25,963.35 check to pay the inheritance tax, drawn from the Trust account, that was accepted and recorded by the Register of Wills on December 17, 2007.

With the inheritance tax paid, PNC began the task of distributing the Trust’s assets to the beneficiaries. To that end, PNC sent to each Petitioner and Robert Kirkwood a letter that included, among other things, an accounting of the entire Trust and a “Waiver, Receipt, Release and Indemnification Agreement” (Release Agreement). The letter directed that, if the beneficiaries approved of the accounting, they should sign the attached Release Agreement and return it to PNC. The letter further explained that, “[ujpon receipt of the executed Releases from all of the [beneficiaries], we will be in a position to have the cash disbursed.”

*17The Release Agreement provided that “the Trust has terminated; and ... the parties in interest have requested that PNC distribute the Trust assets ... without the filing, audit and adjudication of an account of PNC’s administration of the Trust with a court of competent jurisdiction.” In consideration of terminating the Trust by “settling] PNC’s administration of the Trust on an informal basis without having an accounting filed with [a] Court,” the Release Agreement requested, among a number of items, that the beneficiaries: (1) acknowledge that they had consulted with an attorney (or had chosen affirmatively not to do so); (2) declare that they had reviewed the books, records, and statements of the Trust, and; (3) approve of PNC’s handling and administration of the Trust. Pertinent to this appeal, the Release Agreement contained a clause releasing PNC from liability and requiring the beneficiaries to indemnify PNC tor certain expenses attached to the termination of the Trust (release and indemnity clause). That clause read:

[Ejach of the undersigned hereby: ... Releases, indemnifies and holds PNC, in its corporate capacity and as Trustee, harmless from and against any and all losses, claims, demands, surcharges, causes of action, costs and expenses (including legal fees), which may arise from its administration of the Trust, including, but not limited to, the overall investment strategy of the Trustee, all decisions made and actions taken or not taken with regard to the administration of the Trust, and PNC’s distribution of the assets to the Beneficiaries as set forth on the attached schedule.

By letter dated January 2, 2008, John M. Robinson, an attorney and the husband of one of the Petitioners, Ann K. Robinson, objected on behalf of all four beneficiaries to PNC’s plan for distribution of the Trust assets. The objection touched off a flurry of correspondence between Mr. Robinson and PNC during the subsequent four months. Mr. Robinson voiced two major objections on behalf of the beneficiaries: (1) the release and indemnity clause was far too favorable to PNC and the beneficiaries could not be required to execute it before receiving their distributions; and (2) PNC misinterpreted *18provisions of the Tax-General Article, which caused it to over-calculate its commission and the inheritance tax owed on the Trust assets. The beneficiaries therefore demanded an immediate distribution of the Trust assets and the return of overpaid monies paid to the Register of Wills on the Trust’s behalf.

In response, PNC defended its calculation of the inheritance tax and explained that execution of the Release Agreement, including execution of the release and indemnity clause, was not a required step towards obtaining a distribution. PNC advised that, instead of utilizing a private agreement, under Maryland law it could petition a court for a final accounting and termination of the Trust to obtain the protection it had sought in the release and indemnity clause. The agreement and clause were offered to the beneficiaries as a matter of industry practice, “since the majority of beneficiaries prefer to terminate their trust via private agreement instead of petitioning a court.” Nonetheless, PNC released a partial distribution of $33,319.97 to each of the beneficiaries, seemingly in response to their objections, while predicating final distributions upon the execution of the appropriate Receipt and Release Agreement or court approval of a final accounting.

Petitioners, contemporaneous with the partial distribution and therefore without knowledge of it, filed a three-count complaint for declaratory judgment in the Circuit Court for Baltimore County.5 In Count I Petitioners alleged that “[njothing in Maryland law gives PNC the right to demand the Agreement and withhold payment absent its execution.” Petitioners sought a judgment declaring unlawful PNC’s “demand” for the execution of the release and indemnity clause prior to the distribution of any funds from the Trust. Count I *19also prayed for declaratory relief directing PNC to distribute the entire corpus of the Trust without further delay.

In Counts II and III Petitioners addressed their challenge to PNC’s calculation of the distribution commission and inheritance tax. Petitioners alleged that PNC wrongly based its calculation on the $261,306.72 fair market value of the Trust, because that amount included the income earned on the $218,130.00 remaining principal that had been contributed by Marion’s estate. Instead, according to Petitioners, PNC should have computed the tax solely on the amount of principal because § 7 — 203(j) provides that “[t]he inheritance tax does not apply to the receipt of property that is income, including gains and losses, accrued on probate assets after the date of death of the decedent.” PNC’s alleged failure to use the correct value resulted in a $4,313.71 overpayment in inheritance taxes and a $69.59 overpayment in the distribution commission. Count II prayed for relief declaring “that PNC must use $218,130.00 as the basis for calculating inheritance tax in this case”; Count III prayed for similar relief in the calculation of PNC’s commission. Both counts prayed for monetary damages from loss of income, prejudgment interest, and attorneys’ fees.

PNC timely filed an answer and a counterclaim. In the answer PNC raised a number of defenses to liability and in the counterclaim petitioned the Circuit Court to assume jurisdiction over the Trust pursuant to Rule 10-501.6 The counterclaim further prayed that the court “eventually approve a Final Account by the Trustee, approve distributions to the interested persons, and release and discharge PNC Bank as Trustee from further liability.”

After a period of discovery, the parties filed cross-motions for summary judgment. PNC filed a motion requesting sum*20mary judgment on Counts II and III, arguing that Petitioners suffered from a “fundamental misunderstanding of the Maryland Inheritance Tax scheme as it applies to Trusts and remainder interests.” PNC asserted that Petitioners’ reliance on § 7-203(j) was misguided because that subsection, by its own terms, applies only to “probate assets,” and the funds in the Trust were not probate assets. According to PNC, those funds constituted only a subsequent interest, so § 7-210(c), establishing the method for calculating the inheritance tax on a subsequent interest, provided the only proper method for determining the value of the Trust. That subsection states: “[T]he inheritance tax on the subsequent interest shall be determined based on the value of the interest when it vests in possession.” PNC argued that, because the Petitioners’ interest in the remainder of the Trust vested upon Reba’s death and the Trust’s fair market value was $261,306.72 on the date of Reba’s death, $261,306.72 was the correct value for calculating the inheritance tax and the commission.

PNC did not move for summary judgment on Count I because it believed that its counterclaim, asking the Circuit Court to assume jurisdiction over the Trust, “moot[ed]” that issue. PNC agreed with Petitioners that a trustee could not demand the execution of a private release and indemnity clause. PNC argued, though, that it did not demand that the Petitioners sign the Release Agreement or accede to the release and indemnity clause; it requested that the Petitioners do so in order that the Trust could be terminated expeditiously while obtaining the same protection the Trust would have received from a court’s accounting. Therefore, according to PNC, the lawfulness of a demand for a release and indemnity clause became moot when PNC withdrew its request and moved, by counterclaim, to terminate the Trust by filing a petition with the Circuit Court.

Petitioners responsively moved for summary judgment on all three counts. On Count I they argued that, by demanding execution of the release and indemnity clause, PNC required the Petitioners to release and indemnify PNC against all losses and expenses that arose from the administration of the *21Trust. Petitioners asserted that nothing under Maryland law granted PNC the ability to demand as much, and no court in the State could grant an order that released PNC from liability and indemnified PNC for expenses as broadly as the proffered clause. In relation to Counts II and III, Petitioners reasserted that § 7-2030), excepting the inheritance tax from “receipt of property that is income ... accrued on probate assets after the date of death of the decedent,” applied to the Trust. As a result, $218,130.00 was the proper amount on which the inheritance tax should have been calculated.

After a hearing, the Circuit Court issued an order assuming jurisdiction of the Trust. By the same order, the court also granted PNC’s motions on Counts II and III and entered judgment on those counts in PNC’s favor, agreeing with PNC’s interpretation of §§ 7 — 203(j) and 7 — 210(c). The court denied Petitioners’ motion on all counts and specified in its order, in relation to Count I, that Petitioners “were not required to sign any [Release Agreement].” The court, however, did not enter judgment in favor of either party on Count I, reasoning that there remained a question of whether Petitioners lost income because of PNC’s request.

PNC subsequently filed with the court an inventory and final accounting of the assets in the Trust. PNC also filed a Petition for Attorney’s Fees and a Petition for Court Approval of Final Account and Termination of Trust and for Discharge of PNC Bank, N.A. as Trustee.

Because no judgment had been entered on Count I, Petitioners renewed their Motion for Summary Judgment as to Count I. After a second hearing, the Circuit Court granted in part PNC’s Petition for Attorney’s Fees, awarding PNC $20,000 in fees, and issued an order terminating the Trust, directing distribution of the Trust assets, and discharging PNC from further responsibility following the distribution. Finally, the court denied Petitioners’ renewed motion for summary judgment, specifically finding that PNC requested, rather than “required,” that the release and indemnity clause be executed. Because the court could not “find ... any *22Maryland Law against a fiduciary requesting a [Release Agreement] as was done in this case,” the court entered judgment in favor of PNC on Count I and dismissed the complaint with prejudice.

Petitioners noted an appeal to the Court of Special Appeals. That court affirmed the judgment of the Circuit Court in an unreported opinion. Petitioners sought, and we granted, a writ of certiorari, Hastings v. PNC Bank, NA, 424 Md. 291, 35 A.3d 488 (2012), to answer the following questions:

1. Whether a Maryland trustee can lawfully demand or request an indemnity from its beneficiaries that is broader than the protection that the trustee could have obtained through a court order or a release like that permitted for a personal representative?

2. Whether Section 7-203(j) of the Tax-General Article should have been applied to the trust assets in this case being distributed to remaindermen so as to exempt the income and gains they received from any inheritance tax?

II.

In this appeal, the Circuit Court entered summary judgment in favor of PNC on Counts I and II7 of the complaint. “A trial court may grant summary judgment when there is no genuine dispute of material fact and a party is entitled to judgment as a matter of law.” Appiah v. Hall, 416 Md. 533, 546, 7 A.3d 536, 544 (2010) (quoting 120 West Fayette Street, LLLP v. Mayor of Baltimore, 413 Md. 309, 329, 992 A.2d 459, 471 (2010)). Our task on appellate review is therefore two-fold: we “must first determine whether there is any genuine dispute of material facts,” Beka Indus., Inc. v. *23Worcester Cnty. Bd. of Educ., 419 Md. 194, 227, 18 A.3d 890, 910 (2011) (quoting Dashiell v. Meeks, 396 Md. 149, 163, 913 A.2d 10, 18 (2006)), and then determine the legal correctness of the Circuit Court’s judgment, Appiah, 416 Md. at 546, 7 A.3d at 544.

Petitioners’ challenge to the Court’s judgment in PNC’s favor on Counts I and II are grounded in purely legal arguments, to which we accord a non-deferential standard of review.

Legal Validity of the Release Agreement

Petitioners’ first challenge relates to the Release Agreement that PNC sought to have Petitioners and their brother execute. They focus on the following clause in the Agreement, which we restate for clarity and ease of reference:

6. Releases, indemnifies and holds PNC, in its corporate capacity and as Trustee, harmless from and against all losses, claims, demands, surcharges, causes of action, costs and expenses (including any and all legal fees), which may arise from its administration of the Trust, including, but not limited to, the overall investment strategy of Trustee, all decisions made and actions taken or not taken with regard to the administration of the Trust, and PNC’s distribution of the assets to the Beneficiaries as set forth on the attached schedule.

(Emphasis added by Petitioners.)

Petitioners argue that PNC demanded unanimous execution of the release and indemnity clause “as a condition precedent to any distribution,” and such a demand “violates the Maryland law of trusts by turning it on its head.” They cite several provisions of the Estates and Trust Article but make no argument that any of those provisions, either expressly or by implication, prohibits the action PNC took. The heart of Petitioners’ argument, instead, is that the release and indemnity clause is over-broad. In Petitioners’ words, the release and indemnity clause would force them to release and indemnify PNC “against all losses and expenses that arise from *24[PNC’s] administration of the Trust.” (Emphasis added). Such terms, according to Petitioners, are so favorable to PNC that the clause, in effect, “attempt[s] to contractually place the beneficiaries in the position of protecting the trustee when it should be the other way around.” Petitioners claim that PNC, by requesting execution of the clause, breached its common law, “universally recognized[,] basic duty of good faith” by placing its own interests before the interest of Petitioners. Not surprisingly, PNC disagrees.

Generally, to determine whether a trustee wields lawful authority to take certain actions in connection with trust matters we look to three different sources: (1) the instrument that creates the trust; (2) applicable statutes; and (3) the common law. See ET, § 15-102(b)(2); see also Restatement (Third) of Trusts § 85 (2007)8 (“In administering a trust, the trustee has, except as limited by statute or the terms of the trust, (a) all of the powers over trust property that a legally competent, unmarried individual has with respect to individually owned property, as well as (b) powers granted by statute or the terms of the trust.”). In this case, the creating instrument (i.e. Marion Bevard’s Last Will and Testament) and applicable statutes are of no assistance.9 Disposition of *25this appeal, therefore, requires us to determine whether PNC’s request for execution of the release and indemnity clause contravenes Maryland common law.

Preliminarily, nothing in the testator’s will precluded the trustee from exercising whatever authority the trustee was already allowed by law. The law of Maryland, moreover, permits a trustee to request a release, and Petitioners do not argue the contrary. As for Petitioners’ assertions of breach of fiduciary duty and overbreadth, both fall short.

A trustee owes to the beneficiaries of a trust duties of administration, prudence and loyalty. The trustee’s duty of loyalty — as the duty is known in this state — is well-established in the common law. Bd. of Trustees v. Mayor of Baltimore, 317 Md. 72, 109, 562 A.2d 720, 738 (1989). Broadly put, the duty prohibits a trustee from using the property of a beneficiary for the trustee’s own purposes. Gianakos v. Magiros, 238 Md. 178, 185-86, 208 A.2d 718, 722 (1965). A trustee is otherwise prohibited from “placing himself in any position where his self-interest will or may conflict with his duties as trustee,” and “using the advantage of his position to gain any benefit for himself at the expense of the beneficiary.” Hughes v. McDaniel, 202 Md. 626, 632, 98 A.2d 1, 4 (1953). A trustee also must refrain from using the advantages of the fiduciary relationship for the benefit of a non-beneficiary third party. Bd. of Trustees, 317 Md. at 109, 562 A.2d at 738.

Of course, it is equally well-established that the restrictions associated with the duty of loyalty are not absolute. See, e.g., Goldman v. Rubin, 292 Md. 693, 705-06, 441 A.2d 713, 720 (1982); Turk v. Grossman, 176 Md. 644, 666, 6 A.2d 639, 650 (1939). A trustee may engage in an otherwise-prohibited course of action if authorized “by statute, by the instrument creating the trust, or by the court having jurisdic*26tion of the subject matter.” Goldman, 292 Md. at 706, 441 A.2d at 720 (quoting Harlan v. Lee, 174 Md. 579, 593, 199 A. 862, 869 (1938)); accord Restatement, supra § 78 cmt. (a); 3 Austin Wakeman Scott et al., Scott and Ascher on Trusts, § 17.2 at 1084 (5th ed.2007). Likewise, and important for the purposes of this appeal, a trustee may engage in a self-interested course of action so long as the beneficiaries provide valid, informed consent. Goldman, 292 Md. at 706, 441 A.2d at 720; Grossman, 176 Md. at 666, 6 A.2d at 650; accord Restatement, supra § 78 cmt. (c)(3) (“A particular transaction that would otherwise violate a trustee’s duty of loyalty may be authorized by consent properly obtained from or on behalf of all of the trust beneficiaries.”).10

It almost goes without saying that, if the law countenances consent to what would otherwise be a breach of the duty of loyalty, the law also must countenance requests for consent. If not, then a trustee would be unable to solicit consent without first breaching the duty. Put simply, one must be able to ask for permission in order to obtain it. It is easy to see, then, that PNC could not have breached its duty of loyalty in this ease merely by asking Petitioners and their brother to execute a reasonable release and indemnity clause.

The terms of the release and indemnity clause, moreover, are not so broad and one-sided as to place impermissibly PNC’s interests before those of Petitioners. The clause, as we *27read it, contains two terms: First it “[releases” PNC, “in its corporate capacity and as Trustee,” from “any claims,” “demands,” and “causes of actions” arising from the administration of the Trust; and second, it requires that PNC be “indemnifie[d]” for “all” “surcharges,” “costs,” and “expenses (including legal fees)” arising from the administration of the Trust. These two terms track closely, although not perfectly, to the terms PNC would have received had it petitioned for (and received) a court order formally approving the accounting and termination of the Trust.

Maryland Rule 10-501 authorizes a fiduciary or any “interested person”11 to “file a petition requesting a court to assume jurisdiction over a fiduciary estate other than a guardianship of the property of a minor or disabled person.” A trustee or beneficiary may invoke Rule 10-501 to obtain instruction from a court on how to proceed with the distribution of trust funds when there is some doubt as to the powers or duties of the trusteeship. See Restatement, supra § 71. A trustee may choose to petition a court under Rule 10-501 to obtain a court order that approves of the trustee’s accounting of the trust’s corpus. See Restatement, supra § 71 cmt. (c). Generally, a trustee will do this because “the judicial settlement of a trustee’s account renders res judicata all matters in dispute and determined by the court in settling the account, as well as all matters that were open to dispute but not actually disputed,” 4 Scott, supra § 24.25 at 1789; thus, “a court order approving all or part of a trustee’s accounts discharges the trustee from liability (or further liability) for matters appropriately disclosed,” Restatement, supra § 83 cmt. (c). Accord Harlan v. Gleason, 180 Md. 24, 30, 22 A.2d 579, 581-82 (1941) (“The long-accepted practice in closing trust estates, as indicated by all the authorities, ... is for the trustee to collect all trust funds, report to the court, have an audit stated, and actually distribute the fund accordingly as the court orders. That procedure must be followed, otherwise the trustee could *28not secure proper and binding releases so as to relieve himself and his bond.”); Restatement, supra § 71 cmt. (b) (“[IJnstructions provided by an appropriate court will bind the trustee and beneficiaries who ... are properly made parties to the proceedings.”); 4 Scott, supra § 28.1 at 1645 (“Judicial approval of a trustee’s accounts generally gives the trustee the defense of res judicata as to all matters adequately disclosed. Thus, judicial approval generally bars the beneficiaries from subsequently surcharging the trustee with respect to anything that is within the scope of the accounting.”).

Moreover, a trustee is generally entitled to indemnity for expenses incurred reasonably and properly in the course of administering a trust. Restatement, supra § 38(2). Maryland law provides explicitly for this right to indemnification, mandating that “a trustee ... [i]s entitled to reimbursement from trust property for reasonable expenses incurred in the performance of fiduciary services.” ET § 14-405(m)(l). Satisfaction of the trustee’s right to indemnification can be accomplished by lien; that is, the trustee gains a security interest in the trust’s assets upon incurring reasonable and proper expenses on the trust’s behalf. 4 Scott, supra § 22.1.1 at 1627. This security interest takes priority over the interest of the beneficiaries, so “[t]he beneficiaries are not entitled to distribution of the trust property until the trustee has been indemnified.” Id. at 1629. Finally, the amount of indemnification to which a trustee is entitled can be “enlarged or diminished by agreement between the trustee and the beneficiaries.” Restatement, supra § 38 cmt. (f).

All this is to say that, before PNC presented the Release Agreement to Petitioners and their brother, PNC was legally entitled to some measure of protection and indemnity. With or without the consent of Petitioners, PNC was free under Rule 10-501 to begin judicial proceedings to audit and terminate the Trust. Those proceedings eventually would have resulted in a court order that would have barred, as res judicata, all matters disputed and open to dispute in settling the Trust account. Moreover, PNC was entitled to indemnifi*29cation for “reasonable expenses incurred in the performance of fiduciary services,” ET § 14-406(m)(l), before distribution of the Trust’s corpus took place. No matter what occurred in connection with the Release Agreement, then, Petitioners, in this narrow and specific context, would have ended up in a position where their interest in the distribution of the Trust’s funds was subordinated to PNC’s interest in protection from legal liability and indemnification for costs.

Against this backdrop, the terms of PNC’s release and indemnity clause are not a radical departure from the common law protection and statutory right to which PNC already was entitled. To be sure, the release and indemnity clause sought protection for PNC in its role as trustee and “in its corporate capacity.”12 The clause also sought a right to indemnification for “all” costs arising from the administration of the Trust, rather than all costs reasonably and properly incurred. These differences are material and represent a fairly sizeable increase in the amount of protection PNC would have received, as trustee, from liability and cost. The differences, though, are of degree rather than kind. The differences do not represent a reorientation of the interests that PNC and Petitioners respectively possess, but represent, at bottom, PNC’s arm’s length request to exchange increased protection and indemnity for a quicker and less costly distribution of trust funds. Petitioners retained the choice to accede to that request, perhaps negotiate a release agreement not as broad in its protection of PNC, or simply reject it out of hand and accept the delay in distribution.

*30It is also worth noting that, no matter the terms of the clause itself, the Release Agreement could not protect PNC from liability arising from fraud, material mistake or irregularity on PNC’s part. See Allen v. Ritter, 424 Md. 216, 229-30, 35 A.3d 443, 450-51 (2011). Had PNC presented a fraudulent or inaccurate accounting to a court, that court’s order approving the accounting, distribution, and termination of the trust would not have stood as a res judicata bar to those matters fraudulently or inaccurately represented. See Restatement, supra § 83 cmt. (c) (“Because a trustee has an affirmative duty to disclose relevant information, a matter involving sensitive issues must be revealed in the accounting with sufficient clarity to invite attention to the issue if the court order is to protect the trustee as a matter of issue preclusion.”); see also, 4 Scott, supra § 23.1 at 1645 (“Of course, a trustee who in rendering the account is guilty of fraud or fraudulent concealment is not protected.”). Moreover, “this Court has consistently held that fraud can and will invalidate an otherwise-complete release of liability.” Allen, 424 Md. at 229, 35 A.3d at 450.

We therefore hold that the Circuit Court correctly denied Petitioners’ motion for summary judgment as to Count I. PNC’s request for execution of the release and indemnity clause was only that — a request for consent to take a certain course of action. Moreover, PNC’s request, though expanding upon an interest already possessed, was not in its terms so one-sided as to place impermissibly its own interests ahead of those of Petitioners. PNC’s action, not prohibited by statute, was likewise lawful under the common law. The Circuit Court properly entered judgment in PNC’s favor on Count I of the complaint.

Application of the Inheritance Tax Rate to the Trust

We turn next to Petitioners’ challenge to the Circuit Court’s grant of summary judgment in favor of PNC on Count II of the complaint, which assailed the method used by PNC to calculate the amount of inheritance tax due the Register of Wills prior to distribution. On this issue the parties are *31generally in accord. They agree that Petitioners are collateral relatives of Marion Bevard, owing a ten percent inheritance tax on the value of the Trust assets.

The parties part company, though, on the value of the assets upon which the tax rate should be calculated. Petitioners argue that the tax should be assessed on the $218,130.00 that constitutes the remainder of the original contribution from Marion’s estate, while PNC asserts that $261,306.72, which includes income accrued on that contribution, is the correct figure. Understanding how each party arrives at its respective figure necessitates a brief explanation of the application of inheritance taxes in Maryland.

Section 7-202 of the Tax-General Article imposes a ten percent inheritance tax “on the privilege of receiving property that passes from a decedent and has a taxable situs in the State.” See § 7-204(b) (“The inheritance tax rate is 10% of the clear value of the property that passes from a decedent.”). The tax applies broadly to property passing by devise, including property held in trust. See § 7-201(d)(l)(i). A devisee need not hold a vested, absolute interest in the devised property for the inheritance tax to apply; by law, the inheritance tax is applicable to a range of future and non-absolute interests. See §§ 7-208, 7-209. Pertinent to this case, the inheritance tax applies to property in which a devisee holds only a “subsequent interest,” which is defined as “a vested or contingent remainder, executory or reversionary interest, or other future interest that is created by a decedent and will or may vest in possession after the death of the decedent.” § 7 — 201(e)(1). Because operation of Marion’s will granted the beneficiaries a remainder interest that vested only upon the deaths of Reba Bevard and Robert Kirkwood, Petitioners and their brother each held only a subsequent interest in the assets of the Trust.

Taxation of a subsequent interest proceeds differently than taxation of a present possessory interest because a subsequent interest does not vest into possession when it is created. Under Maryland law, a subsequent interest can be *32taxed by either of two methods. A personal representative administering an estate that contains a subsequent interest may prepay the inheritance tax or defer payment. Prepayment is accomplished when the personal representative pays the inheritance tax at some “reasonable time” after the initial valuation of the devised property, but before the interest vests in the devisee’s possession. § 7-219(a). Alternatively, deferring payment is accomplished by merely waiting to pay the tax until the subsequent interest vests into a present, possessory interest.

In terms of the present case, prepayment could have occurred at some reasonable time after Marion’s death in 2002, when Marion’s estate was administered and the Trust was established. Deferred payment could only happen after Reba’s death in 2007, when Reba’s life estate terminated and the beneficiaries’ remainder interest vested in their possession. The personal representative of Marion’s estate opted not to prepay the tax upon creation of the Trust. Petitioners, moreover, filed no application to prepay. They, therefore, necessarily chose to defer payment. This choice is important for a number of reasons, chief among them is that the value used for the calculation of the inheritance tax differs depending on whether a devisee prepays or defers payment.

Pursuant to § 7-210, the general rule for calculating inheritance tax on a subsequent interest is as follows: after a personal representative elects when to pay, the inheritance tax payment is made in the amount of ten percent of the value of the subsequent interest at the time of the payment. This is because Maryland law provides that for inheritance tax purposes, a subsequent interest is valued at the time of the payment, § 7-210(a)(l) & (c)(l)(i), and the tax amount is based on that timely value, § 7-210(a)(2) & (c)(l)(iii). In practice, this means that, if a personal representative prepays, the personal representative pays a ten percent tax on the value of the interest at the time of the devisor’s death. More important, if a personal representative defers payment, the remainderman pays a ten percent tax on the value of the interest *33when it vests, regardless of whether the interest has appreciated or depreciated from its original valuation, Skaughnessy v. Perlman, 198 Md. 619, 626, 85 A.2d 38, 41 (1951), because the inheritance tax is a tax on “the estate as it passes to the beneficiary, and not merely ... the estate as it passes from the person who dies ‘seized and possessed thereof.’ ” Lilly v. State, 156 Md. 94, 104-05, 143 A. 661, 665 (1928) (quoting Safe Deposit & Trust Co. v. State, 143 Md. 644, 648, 123 A. 50, 51 (1923)).

Petitioners argue that PNC miscalculated the amount of inheritance tax due on the assets of the Trust. Specifically, they argue that, in addition to § 7-210, § 7-203(j) applies to the taxation of subsequent interests. That provision states: “The inheritance tax does not apply to the receipt of property that is income, including gains and losses, accrued on probate assets after the death of the decedent.” Petitioners thus argue that, when a devisee chooses to defer payment, the devisee pays inheritance tax on the value of the interest at the time it vests less any income gained or lost during the running of the prior estate. In other words, according to Petitioners, the value of a vested subsequent interest is derived only from the property that was devised from the devisor to the devisee and not from any income that may have accrued during the intervening estate. Consequently, they assert, PNC should have calculated the inheritance tax on the $218,130.00 value of the beneficiaries’ interest that constituted property devised from the estate, instead of using the $261,306.72 figure that included the principal plus accrued income.

In support of their reading of the Tax-General Article, applying § 7-203(j) to the taxation of subsequent interests, Petitioners cite a number of secondary sources and testimonial letters from the legislative history. Their reading, however, relies primarily on two assertions: first, that the assets of the Trust are “probate assets” within the meaning of § 7-203(j); and second, that § 7 — 203(j) can be read in harmony with § 7-210 so as not to render superfluous or nugatory any provision in the statute.

*34In support of the former assertion, Petitioners rely on a treatise definition of “probate assets” that includes “remainder interests.” In support of the latter assertion, Petitioners argue that the structure of § 7-210 itself provides for what they claim is the proper result.13 Specifically, Petitioners point to § 7 — 210(c)(l)(ii), which dictates that when a devisee defers payment, the subsequent interest “shall be valued when it vests in possession in the manner stated in subsection (a).” Petitioners assert that this provision grants a reader license to move to subsection (a), skip over subsection (a)(1), and apply subsection (a)(2) to those instances in which a devisee who has deferred payment must calculate the inheritance tax due. Subsection (a)(2) provides that “[t]he total inheritance tax on all interests in the property valued shall equal the inheritance tax that would have been due if an absolute interest in the property passed from the decedent.” Petitioners explain that, if an absolute interest in the Trust had passed to them from