Short answer: In New Mexico you can protect settlement money by asking the court to accept the funds into its registry (the clerk’s custody) or by obtaining a court-approved arrangement (for example, approval of a minor’s compromise or appointment of a personal representative or conservator). To do this you normally file a motion or a stipulation asking the judge to approve the settlement terms (where required) and to direct the defendant or insurer to deposit funds with the court clerk. The court will hold the funds until it signs an order releasing them under the conditions you request.

Why you might use the court clerk to hold funds

• There are competing claims (multiple heirs or lienholders) and you need neutral custody of the money while the court sorts distribution.
• You are protecting proceeds for a minor, an incapacitated person, or an estate that requires court approval before distribution.
• You want to ensure liens (medical bills, funeral expenses, Medicaid claims, or attorney’s deductions) are resolved before final payout.

Key New Mexico statutory background

The wrongful death claim itself is governed by the New Mexico Wrongful Death Act (NMSA 1978, Chapter 41, Article 2). That statute establishes who may bring a wrongful death action and the basis for damages. For details and the exact statutory language, see the New Mexico Legislature site: https://www.nmlegis.gov (search for NMSA 1978, §41-2-1 et seq.).

Typical steps to secure proceeds with the court clerk in New Mexico

1. Retain or consult an attorney. A lawyer familiar with wrongful death and probate practice will draft the necessary motions, protect beneficiaries’ rights, and identify potential liens or claims that can delay distribution.
2. Determine whether court approval is required. If beneficiaries include minors or incapacitated persons, or if the settlement resolves a pending wrongful death lawsuit filed in court, you will usually need a court order approving the settlement or directing funds into the court registry before distribution.
3. Prepare and file a motion or a stipulated order. Common filings include:
   • Motion to approve settlement (if required by the court).
   • Stipulation and proposed order directing the payer (insurer/defendant) to deposit settlement proceeds with the court clerk.
   • Proposed order describing who can draw funds, what conditions must be satisfied, and how the funds will be distributed (including payment of liens, counsel fees, costs, and net distribution to beneficiaries).
4. Provide required notices and supporting documents. The court will expect documentation such as the settlement agreement, proof of identity of beneficiaries, a list of known lienholders, and sometimes affidavits that explain why court custody is needed (for example, a statement that a beneficiary is a minor).
5. Clerk accepts the deposit into the court registry. Once the judge signs the order, the payer sends (or the court directs) payment to the clerk’s registry. The clerk will issue a receipt and hold funds according to the court’s order. The clerk’s office may have procedures and forms for registry deposits—ask the clerk in the county where the case is pending.
6. Resolve claims and liens while funds are held. With the money in the registry, you or your attorney can notify lienholders, negotiate reductions, and file necessary petitions for distribution. If competing claimants disagree, the court can decide distribution via motion practice or a hearing (interpleader-like process).
7. Ask the court to enter a disbursement order. When you and the court are satisfied that liens, fees, and distribution terms are resolved, file a proposed order directing the clerk to pay specific amounts to named payees. The clerk disburses funds only on the court’s signed order.

Special situations

Minors or incapacitated beneficiaries

If a beneficiary is a minor, the court typically requires protection such as (a) approval of the settlement as a minor’s compromise; (b) appointment of a guardian or conservator; or (c) directed deposit into a blocked account or into an approved trust or structured settlement. Your motion should explain how the child’s interests will be protected.

Competing claims and interpleader

When multiple parties claim the same settlement funds (heirs, creditors, medical providers), the court may allow or require an interpleader-like process so the clerk can keep the money while the judge decides distribution. Filing a motion for the court to enter an interpleader order or to appoint a receiver can limit the payer’s liability and protect the payor from multiple claims.

Medical liens, Medicaid, and funeral expenses

Before funds go out, identify any statutory or contractual liens (for example, medical providers, Medicare/Medicaid recovery, or funeral home charges). Resolving liens often requires negotiation and sometimes separate court motions. Do not assume the full gross settlement will reach beneficiaries until liens and fees are resolved.

Documents and information you will likely need

• Filed complaint or case number for the pending wrongful death action.
• The settlement agreement and release signed by parties.
• Proposed form of judgment or order directing deposit into the clerk’s registry.
• Identification for beneficiaries and proof of status (birth certificates for minors, death certificate for decedent).
• List of known lienholders and estimates of amounts owed.
• Attorney fee agreement and itemization of costs (for court approval if required).

Practical tips when working with the court clerk

• Contact the county clerk or district court clerk’s office early. Each county may have different forms, trust-account procedures, or required wording for registry deposits.
• Ask the clerk about any fees, bond requirements, or account numbers for the registry—get written instructions for the payer so the deposit proceeds smoothly.
• Keep careful records: receipts from the clerk, docket entries, and any court orders. These protect against future claims by showing the court-controlled disposition of funds.

When to get a lawyer

Because wrongful death settlements often involve multiple beneficiaries, potential lienholders, minors, and complicated distribution issues, retain a lawyer if any of the following apply:

• Minors or incapacitated beneficiaries are involved.
• Multiple heirs dispute the distribution.
• Large medical, Medicaid, or other statutory liens exist.
• You need the court to approve a release or structure a distribution order.

Helpful Hints

• Start with a short conference with a probate or wrongful death attorney — many offer limited-scope consultations to explain whether court approval or registry deposit is necessary.
• Don’t accept a payer’s unilateral distribution without a court order if there are competing claims or minors involved. A later dispute can force you to return funds.
• Ask the insurer to name the court or county clerk as the payee so the insurer can get clearance from today’s potential multiple claimants.
• When minors are involved, consider whether a structured settlement annuity, a blocked account ordered by the court, or the appointment of a guardian/conservator best protects long-term interests.
• Keep copies of the death certificate and proof of your relationship or appointment as personal representative—clerks and judges often require them before authorizing distribution.
• Expect time for notice and hearings. Even with an order directing deposit, courts may require waiting periods or hearings before release for distribution if objections exist.