Communication About Legal Services Flashcards
Can a client consent to put funds in trust account oversees?
In general, a lawyer must not commingle a client’s funds that are in the lawyer’s possession in connection with a representation with the lawyer’s own funds. A client’s funds must be kept in a separate client trust account maintained in the state where the lawyer’s office is situated, unless the client consents to another location. MRPC 1.15(a).
What do you do with interest on client trust account?
The interest on such an account is used for various public purposes, such as funding charitable legal aid services. Use of the interest in this manner does not violate the Fifth Amendment Takings Clause because, individually, the client did not have a compensable property interest. Brown v. Legal Foundation of Washington, 538 U.S. 216 (2003).
exceptions to no need for separate client trust account
When, due to the amount of money or the length of time it would be in the lawyer’s possession, the client would benefit from the creation of separate trust account, the lawyer typically must at least give the client the option of having the funds placed in a separate interest bearing account, with the interest payable to the client. Restatement (Third) of the Law Governing Lawyers § 44, cmt. d. Such a separate trust account may be warranted when the lawyer is administering estate monies or acting in a similar fiduciary capacity with regard to funds. MRPC 1.15, cmt. 1.
How long after representation must lawyer keep accounting records?
The lawyer must keep complete records for at least five years after the termination of the representation. MRPC 1.15(a).
Securities should be kept …
in a safe deposit box, except when some other form of safekeeping is warranted by special circumstances. MRPC 1.15, cmt. 1.
Third Party and Client’s property safekeeping requirements
1) The prohibition on commingling as well as the account,
2) recordkeeping
3) notice,
4) delivery, and
5) accounting requirements that apply to a client’s property in the lawyer’s possession apply to a third person’s property being held by the lawyer. MRPC 1.15.
Clients and their creditors
A third party may also have a lawful claim to property in a lawyer’s possession, such as a client’s creditor who has lien on funds recovered in a personal injury action. Under state law, a lawyer may have a duty to protect such a claim against the client’s wrongful interference. In such case, a lawyer must not turn over the property to client, despite the client’s demand that the lawyer do so. The lawyer should not attempt to arbitrate the dispute between the client and the third party. If there are substantial grounds to dispute the person entitled to the property, the lawyer may file an interpleader action in order to have a court resolve the dispute. MRPC 1.15(e), cmt. 4.
