Safekeeping funds

Question 1

What is the standard about holding property for others in representing a client?

Answer 1

No commingling with your own property.

Question 2

Is an attorney holding property to a client held to a special standard?

Answer 2

Yes - fiduciary standard.

Question 3

Can trust funds be held with the firm’s money?

Answer 3

No - this must be in a separate operating account.

Question 4

Can you pool trust account for client in one account?

Answer 4

Yes

Question 5

Can the firm ever put any money into the client’s trust account?

Answer 5

Yes - only the amount to cover bank service charges.

Question 6

What are the recording keeping requirements?

Answer 6

1. Keep complete records of money and property.
2. Preserve records 5 years after representation ends.
3. Comply if client requests accounting promptly.
4. Promptly notify client or third party upon receipt of property they have an interest in.
5. Promptly deliver property.

Question 7

What do you do with disputed property?

Answer 7

Keep disputed funds in the trust account until issue is resolved- move undisputed to the right party.

Question 8

What if there is a dispute between your client and a third party?

Answer 8

If third party has a valid claim, you must keep the dispute portion in trust until dispute is resolved.

Question 9

Do the rules of professional conduct apply if the attorney is not representing the person involved and is their landlord?

Answer 9

No

Question 10

eanne practices law in State A.

Where can she open a client trust account?

Answer 10

State A or where client consents

Question 11

True or False: A lawyer holding client’s property acts a fiduciary and is subject to civil liability for failure to safe guard.

Answer 11

True

Question 12

When a lawyer possesses property (other than cash) from a client, the lawyer ___ identify it as belonging to the client and __________

Answer 12

Must

put it in a safe place.

Question 13

What is the standard of care when holding property for a client?

Answer 13

Care required for a professional fiduciary.

Question 14

What must be done with all money a lawyer receives in connection with a representation?

Answer 14

Placed into a trust account separate from personal or business accounts of the lawyer.

Question 15

What is the rule for where a trust account must be?

Answer 15

State where lawyer practices or other location where the client has consented to

Question 16

What should a lawyer do if they are holding money for a long period?

Answer 16

Put it into a separate, interest-bearing account and the interest earned belongs to the client.

Question 17

What is recommended when a lawyer is administering funds for an estate?

Answer 17

A separate account.

Question 18

In an IOLTA account where does the interest go?

Answer 18

Charitable orgs - state bar or law foundation

Question 19

When do you draw from a trust account?

Answer 19

When you spend money for expenses or when you earn the fee through your work.

Question 20

What is best practice when drawing from a trust account?

Answer 20

Itemized accounting of the activity