Detailed Answer
Short overview: In Maryland you can often protect settlement proceeds from a pending wrongful death claim by having the court authorize and direct the defendant or insurance carrier to pay money into the registry of the court (the clerk) or by asking the court to approve and supervise distribution. This is commonly done when there are multiple claimants, unresolved disputes about entitlement or distribution, or when a beneficiary is a minor or incapacitated.
Who can ask the court to hold settlement funds?
Any party with standing in the wrongful death matter may ask the court to hold funds. That usually includes the plaintiff(s) who filed the wrongful death action, the personal representative of the decedent’s estate (if one has been appointed), or any person asserting a competing claim to the proceeds. If the defendant or insurer fears competing claims, they can ask the court for an interpleader order and deposit the funds with the clerk.
Why use the court clerk (the registry)?
- Neutral custody: The clerk holds funds impartially and follows court orders on distribution.
- Protects payor from future liability: If the court accepts the funds, the payor is generally released from further obligation to pay to claimants.
- Manages disputes and guardianship issues: Courts routinely supervise distribution when minors, incapacitated persons, or competing heirs are involved.
Relevant Maryland law
Maryland recognizes wrongful death claims and sets out who may recover and how proceeds are distributed under the wrongful death statute. See Maryland wrongful death statute for the substantive law and distribution rules: Maryland Code, Courts & Judicial Proceedings section 3-904. For practical steps about deposits and court procedures, contact your local circuit court clerk or review the Maryland Judiciary resources: Maryland Circuit Court Clerks.
Step-by-step process to secure settlement proceeds with the clerk
- Confirm who is entitled to the funds. Identify the named plaintiff(s), the decedents personal representative (if any), and any statutory beneficiaries under Maryland law. If the decedent had no estate administration, distribution questions can complicate payment directly to claimants.
- Ask the insurer or defendant to deposit funds into the court registry. Ask for payment to the clerk of the appropriate Maryland circuit court under an agreed proposed order or interpleader motion. If the payor worries about competing claims, they can file an interpleader and move to deposit the money with the court.
- File the right papers with the court. Depending on the situation, common filings include: a motion or petition asking the court to accept funds into the registry; a motion to approve a settlement and request that the clerk hold proceeds pending distribution; or an interpleader complaint. The court will often want a proposed order that directs the clerk how to receive and hold funds.
- Get a court order specifying custody rules. The courts order should say who may withdraw money, the process for distribution, whether the clerk will require receipts or releases, and whether interest or fees apply. For funds held in the registry the court controls release by written order.
- Comply with court conditions before release. The court may require proof such as letters of administration (if there is an estate), guardian or conservator appointments for minors/incapacitated persons, or signed releases from claimants before authorizing payment out of the registry.
When will the court require formal approval to settle or distribute?
Court approval is frequently required or advisable in these situations:
- Any beneficiary is a minor or legally incapacitated. Courts protect minors interests and often require a petition to approve compacts and to direct the clerk to hold or disburse funds.
- There are multiple claimants or competing claims. The court may supervise distribution to prevent future disputes.
- There is no personal representative yet in a decedents estate, or the manner of distribution under the statutes is in dispute.
- The insurer or defendant requests an interpleader to avoid multiple liabilities.
Practical considerations and costs
- Registry fees and bond requirements vary by court. The clerk may invest funds and pay interest or charge service fees.
- The clerk will usually require certified funds (check, wire) complying with the courts procedures for deposit.
- Depositing with the court does not remove the need for releases and settlement paperwork. The payor will want a release; claimants will want court-ordered distribution or written releases before funds are finally disbursed.
- Interpleader can limit a payor’s exposure, but it adds litigation steps and costs and may delay distribution to beneficiaries.
Example hypothetical procedure (simple, common scenario)
Suppose a wrongful death claim settles for $250,000 but two siblings disagree on distribution and one sibling is a minor. The insurer files an interpleader or the plaintiff files a motion asking the court to accept the settlement into the registry. The court issues an order directing payment to the circuit court clerk, authorizes the clerk to hold funds, and schedules a hearing to determine rightful distribution. The court may appoint counsel to represent the minors interests, require a guardian ad litem, and then issue an order releasing funds per the courts distribution instructions.
When to get a lawyer and what to ask
Seek an attorney when distribution is contested, when beneficiaries include minors or incapacitated adults, when estate administration is pending, or when larger sums or complicated claims are at issue. Ask a prospective lawyer how they will:
- Seek a court order to protect funds;
- Coordinate with the clerk and insurer for safe deposit;
- Ensure timely distribution and minimize fees and delays; and
- Address tax, lien, or creditor claims against the settlement.
Disclaimer: This information is educational only and not legal advice. It does not create an attorney-client relationship. For advice about a specific case in Maryland, consult a licensed Maryland attorney or contact the clerk of the circuit court handling your case.
Helpful Hints
- Contact the circuit court clerk early to learn local deposit procedures and fees. Use the Maryland Judiciary clerk directory: Circuit Court Clerks.
- Get the settlement terms in writing. A clear agreement and draft order reduce delays when asking the court to accept funds.
- If you are a payor (insurer or defendant), consider interpleader to avoid paying multiple claimants and to get judicial instructions.
- When minors are involved, expect the court to require additional protections (guardian ad litem, bonding, or supervised disbursement).
- Keep documentation: releases, settlement agreement, proof of deposit, court orders. The clerk will usually require certified copies to release funds.
- Expect time and cost for court-supervised resolution. While holding funds with the clerk protects them, it can delay payment to beneficiaries.
- If creditors, liens, or outstanding medical bills exist, discuss how those claims affect distribution with counsel early.