Safekeeping Property (Rule 1.15)

Question 1

Three kinds of trust accounts

Answer 1

1. Dedicated Trust Accounts
2. Fiduciary Accounts
3. General Trust Accounts

Question 2

General Trust Account is:

Answer 2

Any trust account other than a dedicated trust account

Question 3

Dedicated Trust Account is:

Answer 3

Account that is maintained for the sole benefit of a single client or with respect to a single transaction or series of integrated transactions

Question 4

Fiduciary Account is:

Answer 4

Account designated as such, maintained by a lawyer solely for the deposit of fiduciary funds or other entrusted property of a particular person or entity

Question 5

Entrusted property

Answer 5

All entrusted property shall be identified, held and maintained separate from the property of the lawyer; AND
Shall be deposited, disbursed, and distributed in accordance with Rule 1.15

Question 6

Deposit of Trust Funds

Answer 6

All trust funds received by or placed under the control of a lawyer shall be promptly deposited in either a general trust account or a dedicated trust account of the lawyer

Question 7

Deposit of Fiduciary Funds

Answer 7

All fiduciary funds received by or placed under the control of a lawyer shall be promptly deposited in a fiduciary account or a general trust account of the lawyer

Question 8

Segregation of Lawyer’s Funds (Rule)

Answer 8

No funds belonging to a lawyer shall be deposited in a trust account or fiduciary account of the lawyer

Question 9

Segregation of Lawyer’s Funds (exception)

Answer 9

1. Funds sufficient to open or maintain an account, pay any bank service charges, or pay any tax levied on the account; OR
2. Funds belonging in part to a client or other third party and in part currently or conditionally to the lawyer

Question 10

Audit by State Bar

Answer 10

The financial records required under this rule shall be subject to audit for cause and to random audit by NC State Bar

Question 11

Check Format

Answer 11

All three accounts must used business sized checks that contain an Auxiliary On-Us field in the MICR line of the check

Question 12

Accounting for Trust Funds (General Rule)

Answer 12

Lawyer shall render to client a written accounting of the receipts and disbursements of all trust funds

Question 13

Accounting for Trust Funds (when to render accounting)

Answer 13

1. upon the complete disbursement of the trust funds
2. at such other times as may be reasonably required by the client
3. at least annually if the funds are retained for a period of more than one year

Question 14

Minimum records for Acct at Banks

Answer 14

1. all records listing the source and date of receipt of any funds deposited in the account
2. all canceled checks or other items drawn on the account, or printed digital images
3. all instructions or authorizations to transfer, disburse, or withdraw funds from the trust account
4. all bank statements and other documents received from the bank

Question 15

Minimum record keeping period

Answer 15

lawyer shall maintain complete and accurate records of all entrusted property received by the lawyer. records shall be maintained for at least the six year period immediately preceding the lawyers most recent fiscal year end.

Question 16

Abandonment of Trust Funds

Answer 16

Trust funds must be held at least five years after the last occurrence of certain prescribed events before they may be deemed abandoned