MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2002-01
RE: Disbursement of a minor’s PIP proceeds to trustee or parent
You have asked for the Committee's guidance concerning your obligation to comply with Estates & Trusts Article, § 13-403 in making payment to a minor client on whose behalf you have acquired PIP benefits that exceed $2,000. Your inquiry asks the Committee to advise you as to whether you must disburse the PIP proceeds pursuant to the Estates & Trusts Article, or if you may simply disburse the funds to the child's father as guardian.
The Committee does not attempt to provide legal opinions to practitioners, but gives its interpretation regarding the Rules of Professional Conduct. Your question only tangentially involves those Rules and merely requires the Committee to advise you that the Rules direct you to provide diligent, competent and effective representation to your client, including a minor client. Rules 1.1, 1.2, 1.3 and 1.15. We interpret these Rules, in conjunction with Rule 8.4, to mean that you must comply with the law.
The apparent legal question that your inquiry seeks to resolve involves an interpretation of the statute's intent that "any substantial sum of money paid to a minor because of a claim, action, or judgment in tort should be preserved for the benefit of the minor." Estates & Trusts Article, § 13-402. More specifically, your questions seeks to determine if the funds you hold are the result of "a claim in tort [that you] made or [was a] judgment in tort obtained" on behalf of your minor client, or whether PIP funds are merely insurance proceeds to which you client was entitled absent a claim in tort. Estates & Trusts Article, § 13-403. The Estates and Trusts Article, § 13-501 addresses the payment of money or other chattels that do not exceed $5,000 in value to a minor and requires payment or possession be transferred to the minor's guardian or to the minor's parent with whom the minor resides when there is no guardian.
From the Committee's perspective, i.e. compliance with the Rules of Professional Conduct, you cannot go wrong by complying with the Estates & Trusts Article, § 13-403 in disbursing the funds. As PIP payments are made only following a claim in tort, the Committee sees little likelihood that you could meet your ethical obligations and disburse PIP payments in a net amount greater than $2,000 to a minor client without doing so in the manner provided by Estates & Trusts Article, § 13-403.