In this Part I of this subtitle the following words have the meanings indicated. “Attorney trust account” means an account that a lawyer or law firm maintains at a financial institution for the deposit of trust money. “Attorney trust account” includes an escrow account. “Beneficial owner” means a person, other than the client of a lawyer, for whose benefit a lawyer is entrusted to hold trust money. “Trust money” means a deposit, payment, or other money that a person entrusts to a lawyer to hold for the benefit of a client or a beneficial owner.

Unless a lawyer or the firm of the lawyer maintains an attorney trust account in accordance with this subtitle and the Maryland Rules, the lawyer may not accept trust money. Each attorney trust account shall be maintained at an approved financial institution, as provided in the Maryland Rules. An attorney trust account may be an interest bearing or noninterest bearing account. An attorney trust account may be: a savings account; a checking account; an account that is subject to negotiable orders of withdrawal; or any combination of these accounts. A lawyer who deposits trust money in a noninterest bearing account is not liable for damages that relate to the loss of interest on the trust money if the deposit is made in compliance with: the provisions of this Part I of this subtitle; and the applicable provisions of the Maryland Rules of Professional Conduct.

Subject to this section a lawyer shall deposit trust money in an attorney trust account, all interest on which is payable to the Maryland Legal Services Corporation Fund established under § 11–402 of the Human Services Article. A lawyer shall deposit trust money in an interest bearing account under this section whenever the lawyer reasonably expects that, for the period that the lawyer expects to hold the trust money, the interest that it would earn: would not exceed $50; or would exceed $50; but would not cover the cost of administering an interest bearing account on which interest is payable to the client or beneficial owner. The Administrative Office of the Courts, in consultation with the Maryland Legal Services Corporation, may waive the provisions of subsection (b) of this section with respect to a lawyer or law firm that demonstrates that it will cost the Maryland Legal Services Corporation Fund more in service charges to open and maintain an attorney trust account with the interest payable to the Maryland Legal Services Corporation Fund than will be generated in interest by the attorney trust account. At least quarterly, each financial institution that has an account described under this section shall: deduct from the total interest accumulated in the account any service charge due on the account; and pay the net interest to the Maryland Legal Services Corporation Fund. A financial institution: may not charge against the individual accounts of a lawyer any service charges for trust money in an account under this section; and may charge the Maryland Legal Services Corporation Fund.

Except as provided in subsection (b) of this section, a lawyer expeditiously shall deposit trust money into an attorney trust account. Subsection (a) of this section does not apply if there is a court order to the contrary. Notwithstanding subsection (a) of this section or any other law, a lawyer may disburse, at settlement in a real estate transaction, trust money that the lawyer receives in the transaction.

Except for trust money that a lawyer is required to deposit in an attorney trust account that earns interest payable to the Maryland Legal Services Corporation, a lawyer may withdraw trust money from an attorney trust account and invest it: as the client or beneficial owner of the trust money instructs; or as the lawyer and the client or beneficial owner of the trust money agree.

A lawyer may not use trust money for any purpose other than the purpose for which the trust money is entrusted to the lawyer.

A lawyer who willfully violates any provision of this Part I of this subtitle, except for the requirement that a lawyer deposit trust money in an attorney trust account for charitable purposes under § 10–303 of this subtitle, is subject to disciplinary proceedings as the Maryland Rules provide.

In this Part II of this subtitle, “Fund” means the Client Protection Fund of the Bar of Maryland.

The Supreme Court of Maryland may adopt rules that: establish a Client Protection Fund of the Bar of Maryland; provide for the appointment of trustees to administer the Fund; and provide for the operation of the Fund. The purpose of the Fund is to maintain the integrity of the legal profession by paying money to reimburse losses caused by defalcations of lawyers. By rule, the Supreme Court of Maryland may: require a lawyer to pay an annual fee, not exceeding $20, to the Fund; and specify the penalties, including suspension and disbarment, for practicing law without having paid the annual fee. The Fund may raise and collect money through voluntary contributions or other means.

The trustees appointed under § 10-311 of this subtitle shall: receive contributions to the Fund; and manage the assets of the Fund. To the extent the trustees consider reimbursement proper and reasonable, the trustees may use the Fund to reimburse a person for a loss that was caused by a defalcation of a lawyer if: the lawyer caused the loss while acting for the person as an attorney at law or a fiduciary; and the person cannot recover the money under a bond. The trustees may enforce a claim for restitution arising by subrogation, assignment, or otherwise against any person whose actions gave rise to a claim that the Fund pays.

By August 31 of each year, the Fund shall provide a list of lawyers who have paid an annual fee to the Fund during the previous fiscal year to: the Department of Assessments and Taxation, to assist the Department in identifying new businesses within the State; and the Comptroller, to assist the Comptroller in determining whether each lawyer on the list has paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller or the Secretary of Labor. The list provided under this section shall: be provided free of charge; and include, for each person on the list: the name and mailing address of the person; and the federal tax identification number of the person or, if the person does not have a federal tax identification number, the Social Security number of the person. If the Comptroller determines that a lawyer has not paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller or the Secretary of Labor and the lawyer does not make payment or provide for payment in a manner satisfactory to the unit responsible for collection within 60 days after receiving notice of the delinquency from the Comptroller, or within any longer period authorized for good cause by the unit responsible for collection, the Comptroller may refer the matter to Bar Counsel under Maryland Rule 16–731.