Why? Because.

The Maryland K-1 for the Maryland resident shows all of the income from the whole world, because it's a Maryland trust for a Maryland resident.  The Maryland K-1 for the Virginia resident shows zero Maryland income, because there is no Maryland-source income. 

The New Jersey K-1 for the Maryland resident also shows all of the income, because it all came from New Jersey.  So that beneficiary will file two returns and figure out which state gives a credit for tax paid to the other.  

The New Jersey K-1 for the Virginia resident also shows all of the income, because it all came from New Jersey. Again, two returns with credit on one for tax paid to the other. 

If they don't like that, they should sell the place anyway before the next hurricane.