20775111
Description
Flashcards by JD Advising, updated more than 1 year ago
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Created by JD Advising
about 4 years ago
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| Question | Answer |
| When a client prepays legal fees to a lawyer, where must a lawyer hold these fees? | When a client prepays a lawyer for services or otherwise gives the lawyer property, the lawyer must keep it separate from its own and must not steal it, borrow it, or use it for the lawyer’s personal advantage. a) Large amount of funds: if it is a large amount of funds, the lawyer should put the funds into a separate interest-bearing account and allow the client to retain the interest. b) Small amount of funds: If a lawyer is entrusted with a small sum, the lawyer should put it in a pooled client trust account. All states have Interest on Lawyers Trust Accounts (IOLTA) whereby the interest earned on the fund generally goes to a state bar or legal foundation and is used for public use. Note that the Supreme Court has held that this is not a “taking.” |
| What steps must a lawyer take when safeguarding property for a client? | Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. Securities should be kept in a safe deposit box, except when some other form of safekeeping is warranted by special circumstances. |
| What must a lawyer do with funds held for legal fees if there is a disputed claim? | If there is a dispute, the lawyer must keep the disputed portion in the client trust account until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute. |
| What steps must a lawyer take when a third person has an interest in a client’s property? | Notification: upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Deliver property to client: a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive. Render an accounting: upon request by the client or third person, lawyer shall promptly render a full accounting regarding such property. |
| When may a lawyer deposit funds received from a third-party in the lawyer’s operating account? | The rules only address a lawyer's obligations to avoid commingling third-person funds with the lawyer's own funds when the lawyer holds those third-person funds “in connection with a representation.” Therefore, a lawyer may deposit third-party funds into the lawyer’s business account if they funds are not related to a client’s representation. |
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