Safeguarding Funds, property Flashcards
When may a lawyer properly commingle client funds with her own funds?
Never; a lawyer is subject to discipline for commingling her client’s funds with her own personal or business funds.
exceptions: money for bank maintenance fee
A client trust fund account should not contain
general business funds.
All money that a lawyer receives on behalf of a client (whether from the client or a third party) must promptly be placed
in a client trust fund account.
Ordinarily, a lawyer must never put her own money or her firm’s money into the client trust account, but she may put some of her own money into that account for the sole purpose of paying
bank service charges.
A client trust fund account normally should be located in
the state where the lawyer practices, unless the client consents.
When a client entrusts a lawyer with money to pay costs and expenses not yet incurred, the lawyer must
Place the money into a client trust fund account and pay the expenses directly with checks drawn on that account.
what are the record-keeping requirements for money and property held by a lawyer on behalf of a client?
The records must be kept in accordance with generally accepted accounting practice, and they must be preserved for five years after the termination of the representation
There is no requirement that the records be filed with the appropriate authority. These records are not an invasion of the client’s privacy, and they should not be immediately destroyed.
A lawyer safeguarding a client’s property acts as a
fiduciary and is subject to civil liability for failure to safeguard such property.
Thus a lawyer would be acting properly by arranging for a valuable ring to be placed in a
safety deposit box during the course of litigation.
A lawyer must not borrow money from a client trust account. T o F?
True
What should a lawyer do if she is entrusted with a large sum of her client’s money to be held for a significant period of time?
Place the money into a separate, interest-bearing account, with any interest belonging to the client
Only when a client entrusts a lawyer with a sum that is too small to earn any net interest, should the lawyer put it into a pooled checking account that earns interest. This interest will be used to fund
charitable legal programs.
Advances against legal fees that a lawyer has not yet earned must be
Placed in a client trust account and may be withdrawn by the lawyer as the fees are earned
When the time comes to pay over money or deliver property to which the client or a third party is entitled, the lawyer must do so
Promptly
There is no set period of time, such as 10 business days or 180 days, which meets this standard. The lawyer is directed to do so promptly, not on a timetable that meets the lawyer’s own convenience.
What duty does a lawyer have when safeguarding a client’s property?
The lawyer acts as a fiduciary and is subject to civil liability if he fails to safeguard the property