Is it a Problem to Hold Estate Funds in a Lawyer Escrow Account?

Maryland lawyers do not all agree as to whether a lawyer may hold funds belonging to a decedent’s estate in a general escrow account or a client funds account. While there may seem to be little guidance concerning the subject matter, there are at least two Maryland law cases that suggest that holding funds from a probate estate in a lawyer’s escrow account may be problematical.

In Attorney Grievance Commission v. Boehm, 293 Md. 476, 479 (footnote 2) (1982), the Maryland Court of Appeals states that “[i]t is the obligation of an attorney upon receiving funds representing the assets of an estate to deposit those funds in a separate estate account clearly identifiable by the name of the decedent. Such funds should not be commingled in an escrow account, general or otherwise.” Cf. Attorney Grievance Commission v. Owrutsky 322 Md. 334 (Md. 1991) .

In Attorney Grievance Commission v. Christopher, 383 Md. 624, 861 A.2d, 692, 699(2004), the same court noted with approval the conclusion of the lower court that made findings of fact, which lower court, in its “Conclusions of Law” stated that the lawyer violated the rules of professional responsibility when he, among other things, “mishandled estate funds when he closed the estate bank account . . . and transferred the funds into his trust account.”

I have written this article as a basis upon which I may continue to explore this issue with my colleagues.

— Bill Gatesman