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Short answer

To ensure third-party claims and payments are accurately recorded in a Maryland probate case, the personal representative must (1) identify and preserve all incoming claims and notices, (2) document each claim and payment in a centralized claims-and-disbursements register, (3) keep originals and proof of delivery, (4) file required notices and accountings with the Register of Wills or Orphans’ Court, and (5) obtain releases or court orders for disputed or large claims. Follow Maryland probate procedure and local Register of Wills guidance for creditor notice and accounting deadlines.

Detailed answer — step-by-step checklist to record third‑party claims and payments under Maryland law

Below is a practical, stepwise process a personal representative (executor/administrator) in Maryland should follow. This assumes an ordinary probate administration — special or summary procedures may differ.

1. Set up an organized system immediately:
   • Create a central claims-and-payments register (spreadsheet or ledger) that logs: date received, claimant name, basis of claim, amount claimed, documents received (invoices, contracts), action taken, date paid (if any), payment method, check number or electronic transfer ID, and receipt or release obtained.
   • Maintain a scanned file (PDF) and a paper file for each claim. Keep originals of signed releases, vendor invoices, insurance correspondence, and any court orders.
2. Follow Maryland creditor notice rules and deadlines:
   • Publish or send notices as required by the Register of Wills and local Orphans’ Court rules so potential creditors know how and when to present claims. See general probate procedures at the Maryland Courts probate pages: https://www.mdcourts.gov/probate.
   • Document proof of mailing or publication (certified mail receipts, affidavits of publication). Log those proofs in the register.
3. Accept, acknowledge, and preserve incoming claims:
   • When a third party presents a claim, date-stamp it on receipt and immediately add it to the register.
   • Send a timely written acknowledgement and, if applicable, a request for supporting documentation. Keep copies of all correspondence.
4. Evaluate claims promptly and document your decision process:
   • Determine whether the claim is valid, partially valid, or disputed. Cite the supporting documents and note the legal basis for allowance or denial.
   • If you disallow a claim, notify the claimant in writing and retain proof of mailing. If the claimant files a petition, add court filings to the file and register.
5. Make payments only after verifying authority to pay:
   • Confirm funds are available in the estate account, and that the payment is permitted by the will, by statute, or by court approval.
   • When in doubt about a large or contested claim, seek an order from the Orphans’ Court before payment, or deposit the disputed funds into the court registry/escrow to avoid personal liability.
6. Record payments carefully and obtain releases:
   • Record the payment in the register with the date, amount, payment method, and check or transfer ID.
   • Ask the claimant for a signed receipt or release (a written satisfaction) showing the claim was paid and satisfied. Attach the release to the claim file and log it in the register.
   • Retain bank statements, cancelled checks, wire-transfer confirmations, and copies of cleared checks as proof of payment.
7. Include claims and payments in required probate filings and accountings:
   • Maryland requires personal representatives to keep records and to file accountings with the Orphans’ Court or Register of Wills when ordered. Include a full ledger of claims presented, allowed, disallowed, and paid, with supporting documents as attachments.
   • Cite applicable local filing requirements and incorporate your register into the formal accounting to ensure transparency to heirs, beneficiaries, and the court.
8. Handle insurance recoveries and subrogation claims carefully:
   • If a third party’s claim relates to a loss covered by insurance (auto, homeowner, liability), coordinate with the estate’s insurer and document all payments from insurers and any subrogation demands.
   • Record insurer payments separately in the register and reconcile them in the estate accounting.
9. Resolve disputes by agreement or court process:
   • If a claimant files suit or a creditor contests a denial, preserve notes, communications, settlement offers, and court documents in the claim file and note them in the register.
   • When you settle, get a written release and court approval if required. Document the settlement in the accounting.
10. Reconcile and close the register at major milestones:
    • Reconcile the claims-and-payments register to the estate bank account monthly and at the time you prepare formal accountings.
    • Before final distribution, confirm all allowed claims are paid or otherwise provided for, and that disallowed claims are reflected in the record.

Throughout, preserve contemporaneous notes that explain why the personal representative allowed, disallowed, paid, or deferred any claim. That documentation protects the representative from allegations of mismanagement and helps the court and beneficiaries understand required decisions.

For Maryland procedural details and local forms, consult the Maryland Courts probate information and the Register of Wills in the county where probate is opened: https://www.mdcourts.gov/probate. For Maryland court rules and filing procedures, see the Maryland Rules: https://www.mdcourts.gov/legalresources/rules.

When to get the court or an attorney involved

• Large or complex claims (e.g., contested creditor claims, malpractice claims, or claims involving insurance subrogation).
• When a claimant threatens suit or files a petition in the Orphans’ Court.
• When the representative is unsure whether a payment is authorized or fears personal liability for paying without court approval.
• When accounting or reporting questions arise that could affect beneficiary distributions.

If you plan to seek court approval or need help resolving a complex claim, contact a probate attorney licensed in Maryland. An attorney can prepare motions, negotiate settlements, and protect the personal representative from personal liability.

Helpful hints

• Open a dedicated estate bank account. Never mix personal funds with estate funds.
• Use certified mail with return receipt or tracked electronic delivery for all creditor notices and for sending denials or settlement offers. Save proof of delivery.
• Keep the ledger simple but complete: date, description, reference number, supporting document name, and file location for each entry.
• Get written releases when you pay a claim. Verbal confirmations do not close a liability.
• If you are unsure whether to pay, ask the court to approve a proposed payment or to allow deposit into the court registry pending resolution.
• Reconcile bank statements with your payments register monthly to catch errors early.
• Retain records for the time required by law or court order—usually long enough to cover tax audits and potential creditor actions (consult counsel for timing).
• When receiving insurer payments on behalf of the estate, document how those funds change the estate’s position and whether they reduce third‑party exposure.

Resources and where to look in Maryland

• Maryland Courts — Probate and Register of Wills overview: https://www.mdcourts.gov/probate
• Maryland Courts — Rules and procedural resources (including Orphans’ Court rules and local procedures): https://www.mdcourts.gov/legalresources/rules
• Maryland General Assembly (statutes and code search — look under the Estates & Trusts Article for statutory provisions that affect creditor claims and personal representative duties): https://mgaleg.maryland.gov