May a lawyer place judgment funds held by a clerk during an appeal in an interest-bearing trust account?

Plain-English summary

After a favorable verdict, the lawyer learned that garnished judgment funds had been paid to the clerk and were held in a non-interest-bearing account during an appeal. The lawyer asked whether transferring them to an interest-bearing trust account would be ethical.

The answer says a separate, interest-bearing, non-IOLTA trust account would be appropriate under Rule 4-1.15. Interest would go to the client. For one client's significant funds held for an extended period, or substantial funds held for a shorter one, the opinion says this approach should be used. Expected income relative to account costs is a major factor in deciding whether a separate account is appropriate.

Currency note

This opinion was issued in 1998, before Missouri's 2007 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context and verify current rules before relying on it. The official page itself notes later 2013 and 2016 changes to the cited trust-account rules.

Common questions

Q: Who receives interest on the proposed account?

A: The opinion says the interest would go to the client.

Q: Would the proposed account be an IOLTA account?

A: No. The answer calls it a separate, interest-bearing, non-IOLTA trust account.

Q: What affects whether a separate account is appropriate?

A: The opinion identifies the amount and expected holding period, and says expected income compared with bank charges, legal fees, and other costs is a major factor.

Background and rules framework

The answer applies Rule 4-1.15 to client funds. The official page's reference notes say Rules 4-1.145 and 4-1.155 were adopted later and should also be consulted, and that the opinion rests on earlier versions of Rule 4-1.15.

Citations and references

Missouri Rules of Professional Conduct:

• Rule 4-1.15

See also

• Missouri Informal Op. 990008: Unclaimed Non-IOLTA Funds
• Missouri Informal Op. 2020-17: Missing Client Funds

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/980052/
• Rule revision reference: Missouri Informal Opinion 20030007

Original opinion text

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

Reference Note: Rule 4–1.145, Definitions – Safekeeping Property and IOLTA Accounts, was adopted effective July 1, 2013, and amended effective July 1, 2017. Rule 4–1.155, IOLTA Accounts, was adopted effective July 1, 2013. Rules 4–1.145 and 4–1.155 also would govern this Question and should be consulted in addition to Rule 4–1.15 cited in the opinion.

Reference Note: Effective July 1, 2016, subdivision 4–1.15(f) of Rule 4 was repealed and a new subdivision 4–1.15(f) adopted in lieu thereof. This opinion is based on Rule 4–1.15 in effect prior to that date.

Reference Note: Rule 4–1.15 was amended, effective July 1, 2013. This opinion is based on the rule in effect prior to that date. Please see the July 1, 2013 version of Rule 4–1.15.

QUESTION: Attorney obtained a verdict in favor of Attorney´s client and began collection efforts. Attorney has learned that a portion of the judgment has been paid to the Clerk´s office pursuant to garnishments. The money is being held in a non-interest bearing account pending an appeal. Attorney would like to have the money transferred into an interest bearing trust account. Is this ethical?
ANSWER: Under Rule 4–1.15 it would be appropriate for Attorney to place these funds in a separate, interest bearing trust account. Such an account would be a non-IOLTA trust account, and the interest would go to Attorney´s client. Any time Attorney will hold funds, belonging to one client, of any significant amount for an extended period or substantial funds for a shorter period, this approach should be used. The amount of income to be generated, in relation to the costs (bank charges, legal fees, etc.) of maintaining a separate account will be a major factor in determining whether a separate account is appropriate.