How to get court approval to release estate funds when heirs or beneficiaries dispute a distribution

Short answer: In Maryland, when parties disagree about splitting estate funds the personal representative (executor/administrator) should not distribute contested money without court approval. The usual routes are asking the Orphans’ Court (through a petition) for instructions or for authority to make a partial distribution, filing an interpleader or petition to approve a settlement, or placing the disputed funds in escrow or court registry until the dispute resolves. Each path requires formal filings and notice to interested persons.

Detailed answer — what to expect and how to proceed under Maryland law

This section explains the typical steps a personal representative (PR) or an interested person should take when there is a dispute about how estate funds should be split. The steps assume probate is open or administration is underway.

Why you should get court approval before releasing disputed funds

• Maryland law makes the personal representative responsible for properly distributing assets and for protecting the estate from claims and liability.
• If the PR distributes funds while a dispute is unresolved, the PR can be held personally liable by other claimants or beneficiaries who say they were harmed.
• Getting a court order or placing funds with the court (or a neutral escrow) shifts that risk away from the PR and gives a legally enforceable resolution.

Basic legal options in Maryland

Common court-based options include:

• Petition for instructions or for authority to distribute: The PR files a petition asking the Orphans’ Court (or the appropriate probate court) to direct how to handle the disputed funds or to authorize a limited/partial distribution. The court will set a hearing and require notice to interested persons.
• Interpleader or deposit into the registry of the court: The PR deposits the disputed funds with the court (or with a neutral escrow/surety) and asks the court to decide entitlement among claimants. This protects the PR from multiple liability.
• Motion to approve a settlement or compromise: If parties reach an agreement (even partial), the PR can ask the court to approve the settlement so the distribution is safe from future claims.
• Accounting and citation or contested hearing: If the dispute stems from disagreement about the PR’s accounting, interested persons can demand an accounting and ask the court to resolve contested items.

Typical procedural steps

1. Gather the estate paperwork: inventory, estate accountings, will (if any), list of heirs and beneficiaries, creditor claims, and any correspondence about the disputed money.
2. Consult the Orphans’ Court/Probate rules and local clerk: Maryland administers probate at county level through the Register of Wills and Orphans’ Court. Confirm local filing requirements and forms at the county Register of Wills or the Maryland Courts website: https://www.mdcourts.gov/probate.
3. Try informal resolution or mediation: Many disputes resolve by negotiation or mediation. A written agreement signed by all parties can be submitted to the court for approval.
4. If no agreement, file a petition with the court: The PR (or an interested person) files a petition asking the Orphans’ Court to resolve entitlement, approve a distribution, or allow funds to be placed in the court registry. The petition should identify the disputed funds, the competing claims, and request the specific relief sought (instructions, interpleader, approval of settlement, etc.).
5. Serve notice to interested persons: Maryland law requires notice to beneficiaries, heirs, and known creditors. The court will provide notice rules and timelines.
6. Attend hearing and produce evidence: The court will consider filings and evidence and may order distribution, require funds be held, or approve a settlement. The court’s order provides protection to the PR when followed.

Practical points and legal authority

Maryland gives personal representatives powers and duties to administer the estate properly and to seek the court’s guidance when needed. For guidance on the PR’s duties and statutory framework, see Maryland Code, Estates & Trusts. For example, review the statutory provisions governing administration authority and duties at the Maryland General Assembly’s website: Md. Code, Est. & Trusts § 7-401 (personal representative duties and powers). For local steps and forms, see the Maryland Courts probate pages: https://www.mdcourts.gov/probate.

When the court may order funds released despite a dispute

In some circumstances the court will permit a partial distribution or release of funds—for example to pay urgent debts, taxes, funeral expenses, or homestead allowances—while leaving the disputed portion secured. The court balances creditor protection, beneficiary rights, and the PR’s duty to avoid wrongful distributions. If the court authorizes a release, it typically does so by written order and may require indemnity, bond, or that other funds be held back.

Consequences of ignoring the dispute

• Unapproved distributions can expose the PR to personal liability and to claims by other heirs/beneficiaries.
• The court may require the PR to repay improperly distributed amounts plus interest or may surcharge the PR’s estate bond.
• Failure to give proper notice or follow court procedure can invalidate a distribution and trigger further litigation and costs.

Helpful Hints

• Do not distribute disputed funds without a court order or a written, court-approved settlement.
• Keep complete, dated records of all estate receipts, disbursements, and communications about the dispute.
• Provide timely notice to all interested persons. Courts require notice and will not act without it.
• Consider mediation early — it can save time and cost and many Orphans’ Courts encourage settlement.
• If urgent payments are needed (funeral, bills, taxes), ask the court for a limited release rather than paying unilaterally.
• Ask the court to allow deposit of disputed money into the court registry or to require a surety/bond if the PR is concerned about competing claims.
• Talk to an attorney experienced in Maryland probate and Orphans’ Court practice. Representation helps with pleadings, deadlines, and reducing personal risk to the PR.
• Check county-specific forms and procedures at your local Register of Wills or Orphans’ Court clerk — each county may have local rules.

Where to find more information and forms

• Maryland Courts — Probate and Register of Wills information: https://www.mdcourts.gov/probate.
• Maryland Code, Estates & Trusts (statutory framework): Md. Code, Est. & Trusts § 7-401.

Disclaimer

This article is for general informational purposes only. It does not constitute legal advice and does not create an attorney-client relationship. Laws change and each case depends on its facts. Consult a qualified Maryland attorney or the local Orphans’ Court/Register of Wills for guidance tailored to your situation.