Can a New York lawyer who serves as co-executor of an estate use the lawyer's attorney trust account to hold and pay out estate funds that come to the lawyer only as executor, not as the estate's attorney?
NYSBA Ethics Opinion 1188: Depositing Estate Funds Held Solely as Co-Executor in an Attorney Trust Account
Short answer: The opinion concludes that a lawyer who receives estate funds solely as a co-executor, and not as the estate's lawyer, may not use an attorney trust account to hold or disburse those funds, because that account is reserved for funds received incident to the practice of law.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's view of New York's Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
A New York lawyer was named co-executor of an estate alongside a family relative. After the lawyer found unauthorized transactions and the estate account was frozen, the lawyer sought removal of the co-executor in Surrogate's Court. With time-sensitive expenses pending and the co-executor refusing to open a new dual-signature estate account, the lawyer proposed to run estate funds through a sub-account of the lawyer's attorney trust account (with the co-executor's consent) and asked whether that complies with the Rules. The lawyer is not counsel to the estate, which has its own lawyer.
The opinion concludes the answer is no. Rule 1.15(b)(1) distinguishes two kinds of accounts a lawyer may maintain for funds belonging to another: an account for funds held "incident to the practice of law," and accounts held in other fiduciary capacities such as executor, guardian, trustee, or receiver. An attorney trust account is solely for funds received incident to the practice of law and should not hold funds received in another capacity. The committee notes that Comment [1] to Rule 1.15 recognizes that separate trust accounts may be warranted when administering estate monies in a fiduciary capacity.
On these facts, the lawyer's receipt of estate funds would not be incident to the practice of law: the estate has its own lawyer, and the lawyer appears to have been named co-executor for reasons unrelated to lawyer status, perhaps a familial one. The committee contrasts situations it found were incident to legal practice, such as a court-appointed foreclosure referee depositing sale proceeds in the firm's IOLA account (N.Y. State 1143 (2018)) and a lawyer making an anonymous charitable donation for a client (N.Y. State 907 (2012)). It adds that questions of law are beyond its purview and that controlling statutes (citing EPTL § 11-1.6(a) and SCPA § 719(7)) may independently govern the conduct.
In practice
Under this opinion, a New York lawyer who holds funds purely in a non-lawyer fiduciary role, here as a co-executor of an estate represented by separate counsel, may not place those funds in the attorney trust account. The opinion holds that the attorney trust account under Rule 1.15(b)(1) is reserved for funds received incident to the practice of law, and that estate funds the lawyer holds solely as executor belong in a separate fiduciary account, not the trust account, even with the co-executor's consent.
Common questions
Q: Can a lawyer-executor park estate funds in the attorney trust account for convenience?
A: No. Per the opinion, the attorney trust account under Rule 1.15(b)(1) holds only funds received incident to the practice of law; funds held solely as executor belong in a separate fiduciary account.
Q: What makes funds "incident to the practice of law"?
A: The opinion distinguishes its prior cases: a court-appointed foreclosure referee's sale proceeds (N.Y. State 1143) and an anonymous charitable donation made for a client (N.Y. State 907) were incident to legal practice, while funds the lawyer holds because of a non-lawyer role (here, a familial co-executor appointment for an estate with its own counsel) are not.
Q: Does the co-executor's consent cure the problem?
A: No. Per the opinion, the character of the funds, not the parties' consent, controls; because the funds are not received incident to the practice of law, they may not go in the attorney trust account.
Background and rules framework
The opinion interprets New York Rule 1.15(b)(1), which requires a lawyer holding another's funds incident to the practice of law to maintain them in a special account separate from business, personal, and other-fiduciary accounts (including accounts the lawyer maintains as executor, guardian, trustee, or receiver). It draws on Comments [1] and [5] to Rule 1.15. This corresponds to ABA Model Rule 1.15. The committee notes that statutes outside its jurisdiction (EPTL § 11-1.6(a); SCPA § 719(7)) may also govern.
Citations and references
Rules of Professional Conduct:
- New York Rules of Professional Conduct 1.15(b)(1); Comments [1] and [5] to Rule 1.15
- ABA Model Rule 1.15 (analogue)
Statutes (referenced, not decided by the committee):
- New York EPTL § 11-1.6(a); SCPA § 719(7)
Other opinions cited:
- N.Y. State 1143 (2018): foreclosure-referee sale proceeds as incident to the practice of law
- N.Y. State 907 (2012): anonymous charitable donation made for a client
See also
- NY State Bar Op. 1192: Retention and Disposition of a Lawyer's Closed Files
- NY State Bar Op. 1194: Estate Lawyer's Duties to Beneficiaries, Withdrawal, and Fraud Disclosure
Source
- Landing page: https://nysba.org/ethics-opinion-1188/