Can a bank prepare a land trust agreement and a deed into trust for a customer without using a lawyer?

Plain-English summary

A bank wished to prepare Illinois land trust agreements and deeds into trust for its customers using a trust officer who is not an attorney, taking the customer's information about the property and intentions (beneficiaries, the form in which the beneficial interest would be held, and similar matters) and then drafting and executing the documents.

The opinion concluded that this would involve the bank in the unauthorized practice of law in violation of Illinois Revised Statutes, Chapter 13, Section 1. To draft a land trust agreement the bank would need to advise the customer on matters such as how beneficiaries hold the beneficial interest, the effect of different percentage interests, terminability, and how the trust property is treated at death; advising on any of these, or on the effect of the trust, would inevitably amount to giving legal advice. The committee reached the same conclusion about preparing the deed into trust, citing Chicago Bar Association v. Quinlan & Tyson and Lozoff v. Shore Heights, Ltd.

The opinion concluded that having a trust officer who was also an attorney would not avoid the bank's practicing law without a license and would place that attorney in a conflict of interest (Rule 5.5(b)). It drew a line for blank forms: merely giving a customer an uncompleted land trust form without advising on how to fill it out would not, by itself, involve the bank in the unauthorized practice of law. The committee distinguished a land trust, prepared principally to benefit someone other than the bank, from a checking or savings account agreement the bank prepares for its own benefit, where there is far less temptation to give the customer legal advice.

Currency note

This opinion was issued in 1991, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in May 2010 as generally consistent with the 2010 Rules (Rule 5.5(a)), while cautioning that the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can a bank's nonlawyer trust officer draft a land trust agreement and deed for a customer?

A: No. The opinion concluded that preparing the land trust agreement and the deed into trust requires advising the customer on the trust's terms and effect, which is legal advice and the unauthorized practice of law.

Q: Is handing a customer a blank land trust form also the unauthorized practice of law?

A: No. The opinion concluded that merely giving a customer an uncompleted form, without advising on how it is to be filled out, does not by itself involve the bank in the unauthorized practice of law.

Q: Would it help if the bank's trust officer were also a licensed attorney?

A: The opinion concluded it would not; the bank would still be practicing law without a license, and the attorney trying to effect the bank's purposes would be in a conflict of interest under Rule 5.5(b).

Background and rules framework

The opinion interpreted Rule 5.5 (unauthorized practice of law; assisting a nonlawyer in the unauthorized practice) together with the Illinois statute prohibiting the unauthorized practice of law (Ill. Rev. Stat. Ch. 13, Sec. 1) and the Quinlan & Tyson and Lozoff decisions defining the practice of law to include drafting instruments and giving legal advice (Model Rule 5.5).

Citations and references

Rules of Professional Conduct:

• Model Rule 5.5 (unauthorized practice of law) / Illinois Rule 5.5(a), 5.5(b)

Statutes:

• Illinois Revised Statutes, Ch. 13, Sec. 1 (unauthorized practice of law)

Cases:

• Chicago Bar Association v. Quinlan & Tyson, 34 Ill.2d 116, 214 N.E.2d 771 (Ill. 1966), filling in deeds and mortgages requires a lawyer's skill
• Lozoff v. Shore Heights, Ltd., 35 Ill.App.3d 697, 342 N.E.2d 475, aff'd 66 Ill.2d 398, 362 N.E.2d 1047 (Ill. 1977), practice of law includes giving advice requiring legal knowledge

See also

• ISBA Ethics Op. 13-03: Nonlawyers in FINRA Arbitration
• ISBA Ethics Op. 02-04: Out-of-State Claim Negotiation

Source

• Landing page: https://www.isba.org/ethics/opinions/9013