In Kentucky, may a Master Commissioner hold funds received in the course of Master Commissioner duties in an IOLTA account?

Plain-English summary

The Committee received a query about Master Commissioners, the court officers who come into possession of funds (for example, proceeds of judicial sales) in the course of their duties and must hold those funds in a trust account. The question was whether such an account could be an interest-bearing IOLTA account rather than a non-interest-bearing bank account.

The Committee answered yes. It concluded that no provision of the Kentucky Rules of Professional Conduct would be violated by a Master Commissioner using an IOLTA account for transactions related to the Master Commissioner duties.

Currency note

This opinion was issued in 2000 and predates the Kentucky Supreme Court's substantial 2009 revisions to the Rules of Professional Conduct (SCR 3.130). The Kentucky Bar Association notes that the rules are amended periodically and that lawyers should consult the current version before relying on this opinion. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could a Master Commissioner use an IOLTA account for duty-related funds?

A: Per the opinion, yes. The Committee concluded that no provision of the Kentucky Rules of Professional Conduct would be violated by doing so.

Q: Did the opinion require the account to be non-interest-bearing instead?

A: No. The question was prompted by Master Commissioners using a non-interest-bearing account, and the Committee concluded an IOLTA account was permissible for these funds.

Background and rules framework

The question concerns the rules governing the safekeeping of client and third-party property held in a lawyer's trust account (Model Rule 1.15; SCR 3.130(1.15)) and Kentucky's IOLTA program. The Committee did not identify any rule that would be violated; it concluded the Rules of Professional Conduct do not bar a Master Commissioner's use of an IOLTA account.

Citations and references

Rules of Professional Conduct:

• The opinion cites no specific rule. It concludes that no provision of the Kentucky Rules of Professional Conduct (SCR 3.130) prohibits the practice.

See also

• KBA Ethics Op. E-420: Borrowing Litigation Costs and a Security Interest in a Contingent Fee
• KBA Ethics Op. E-417: Sharing Office Space With Nonlawyers

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-413.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-413
Issued: May 2000

The Rules of Professional Conduct are amended periodically. Lawyers should consult the current version of the rules and comments, SCR 3.130 (available at http://www.kybar.org), before relying on this opinion.

Question:

May Master Commissioners maintain IOLTA accounts for all transactions related to the Master Commissioner duties?

Answer:

Yes.
OPINION

Master Commissioners often find it necessary to maintain a trust account for funds they come into the possession of in the course of their Master Commissioner duties. The Committee has received a query as to whether a Master Commissioner may maintain an IOLTA account for transactions related to the Master Commissioner duties rather than simply using a bank account that earns no interest. No provision of the Kentucky Rules of Professional Conduct would be violated by a Master Commissioner using an IOLTA account.
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Note to Reader
This ethics opinion has been formally adopted by the Board of Governors of the Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor rule). The Rule provides that formal opinions are advisory only.