OHBPC December 2, 2005

Can a lawyer turn over a client's unclaimed trust funds to the state as unclaimed funds?

Short answer: The opinion concluded that an attorney does not violate the duty to preserve client funds (DR 9-102(A)) or to promptly deliver them (DR 9-102(B)(4)) by reporting 'unclaimed funds' under R.C. Chapter 169, so long as the attorney has diligently tried to contact the client at the last known address and the client's whereabouts are unknown. Decided under the former Ohio Code of Professional Responsibility.

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This page answers the general question as of 2005. Ezel answers yours: whether it's allowed on your facts, under the current Ohio Rules of Professional Conduct, with citations.

Disclaimer: Advisory only. Not binding precedent.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page as a PDF) is the authoritative source for any reliance.

View original ethics opinion (PDF)

Currency note

This opinion was issued in 2005, before Ohio's adoption of the Ohio Rules of Professional Conduct (effective February 1, 2007). The Board flagged it as a "CPR Opinion" because it interprets the former Ohio Code of Professional Responsibility, since superseded. The duties to safeguard and deliver client property formerly in DR 9-102 are now addressed by Ohio Prof. Cond. R. 1.15. Treat this page as historical context, not current guidance. Verify against current rules and R.C. Chapter 169 before relying on any specific requirement mentioned here.

Plain-English summary

The Board addressed a recurring trust-account problem: an attorney holds client funds, but the client cannot be found. The question was whether reporting those funds to the state as "unclaimed funds" under R.C. Chapter 169 would violate the lawyer's ethical duties to preserve client funds (DR 9-102(A)) and to promptly deliver funds to the client (DR 9-102(B)(4)).

The Board concluded that it would not, subject to a diligence condition. An attorney does not violate DR 9-102(A) or DR 9-102(B)(4) by reporting the funds as unclaimed under R.C. Chapter 169, so long as the attorney has diligently tried to contact the client at the last known address and the client's whereabouts are unknown. The unclaimed-funds process, properly used after diligent efforts, is consistent with the lawyer's obligations as to the missing client's money.

Common questions

Q: What does a lawyer do with trust money for a client who has vanished?

A: Per the opinion, after diligent efforts to locate the client fail, the lawyer may report the funds as unclaimed under R.C. Chapter 169 without violating DR 9-102(A) or DR 9-102(B)(4).

Q: What does the lawyer have to do before reporting the funds?

A: The opinion conditioned its conclusion on the attorney having diligently tried to contact the client at the last known address, with the client's whereabouts unknown.

Background and rules framework

The opinion interprets former Ohio Code of Professional Responsibility DR 9-102(A) (preserving the identity of client funds) and DR 9-102(B)(4) (promptly paying or delivering funds the client is entitled to receive), read with R.C. Chapter 169 (Ohio's unclaimed-funds law). The current analogue is Ohio Prof. Cond. R. 1.15 (Model Rule 1.15), safekeeping property.

Citations and references

Rules of Professional Conduct:

Former Ohio Code of Professional Responsibility DR 9-102(A), DR 9-102(B)(4)
Current analogue: Ohio Prof. Cond. R. 1.15 (Model Rule 1.15)

Statutes:

Ohio Rev. Code Chapter 169 (unclaimed funds)

Source

Landing page: https://ohioadvop.org/advisory-opinion-index/
Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/04/Op-05-010.pdf

Original opinion text

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

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
65 SOUTH FRONT STREET, 5TH FLOOR, COLUMBUS, OH 43215-3431
(614) 387-9370 (888) 664-8345 FAX: (614) 387-9379
www.sconet.state.oh.us

                                    OFFICE OF SECRETARY




                             OPINION 2005-10
                           Issued December 2, 2005

[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility
which is superseded by the Ohio Rules of Professional Conduct, eff. 2/1/2007.]

SYLLABUS: An attorney does not violate the ethical duty to preserve a client’s
funds under DR 9-102(A) and the ethical duty to promptly deliver funds to a
client under DR 9-102(B)(4) by reporting “unclaimed funds” pursuant to R.C.
Chapter 169, so long as the attorney has diligently tried to contact the client at the
last known address and the client’s whereabouts are unknown.

OPINION: This opinion addresses a question regarding the ethical duty of
preserving client funds and the reporting of unclaimed funds to the state when an
attorney holds client funds in a trust account and the client’s whereabouts are
unknown.

   Does an attorney violate the ethical duty to maintain a client’s funds
   under DR 9-102 by reporting “unclaimed funds” pursuant to R.C.
   Chapter 169?

Ohio attorneys have an affirmative duty to preserve the identity of funds and
property of a client.

   DR 9-102(A) All funds of clients paid to a lawyer or law firm, other
   than advances for costs and expenses, shall be deposited in one or
   more identifiable bank accounts maintained in the state in which
   the law office is situated and no funds belonging to the lawyer or
   law firm shall be deposited therein except as follows:

          (1) Funds reasonably sufficient to pay bank charges may be
              deposited therein.

          (2) Funds belonging in part to a client and in part presently
              or potentially to the lawyer or law firm must be
              deposited therein, but the portion belonging to the
              lawyer or law firm may be withdrawn when due unless
              the right of the lawyer or law firm to receive it is disputed
              by the client, in which event the disputed portion shall
              not be withdrawn until the dispute is finally resolved.

Op. 2005-10 2

To fulfill the duty of preserving client funds, a lawyer must deposit clients’ funds
that are nominal in amount or funds that are to be held for a short period of time
in an interest-bearing trust account identified as an IOLTA (Interest on Lawyer’s
Trust Account). Funds that are more than nominal in amount or funds to be held
for a long period of time are deposited into a regular trust account on behalf of
the individual client. Laws related to the establishment of an IOLTA are set forth
in Section 4705.09 and 4705.10 of the Ohio Revised Code. Rules related to
IOLTA, adopted by the Ohio Legal Assistance Foundation pursuant to R.C.
120.52, are available at www.olaf.org.

Ohio attorneys also have an affirmative duty to promptly pay or deliver to a client
the funds that the client is entitled to receive.

  DR 9-102(B) A lawyer shall:

          (4) Promptly pay or deliver to the client as requested by a
          client the funds, securities, or other properties in the
          possession of the lawyer which the client is entitled to
          receive.

In the normal course of a representation, an attorney will release to the client any
funds held in a trust account that become due to the client. But, if a client’s
whereabouts become unknown during or after the representation, an attorney
will be unable to release the money to the client.

Ohio attorneys are subject to Ohio law regarding the disposition of unclaimed
funds. Chapter 169 of the Ohio Revised Code governs the disposition of
unclaimed funds.

Pursuant to R.C. Section 169.03 (A)(1), all “holders” of unclaimed funds must
report to the director of commerce, funds that have reached the statutory
dormancy period.

  R.C. 169.01 (D)(1) “Holder” means any person that has possession,
  custody, or control of moneys, rights to moneys, or other intangible
  property, or that is indebted to another, if any of the following
  applies:

      (a) Such person resides in this state;

      (b) Such person is formed under the laws of this state;

      (c) Such person is formed under the laws of the United States
          and has an office or principal place of business in this state;

      (d) The records of such person indicate that the last known
          address of the owner of such moneys, rights to moneys, or
          other intangible property is in this state;

Op. 2005-10 3

      (e) The records of such person do not indicate the last known
          address of the owner of the moneys, rights to moneys, or
          other intangible property and the entity originating or
          issuing the moneys, rights to moneys, or other intangible
          property is this state or any political subdivision of this state,
          or is incorporated, organized, created, or otherwise located
          in this state. Division (D)(1)(e) of this section applies to all
          moneys, rights to moneys, or other intangible property that
          is in the possession, custody, or control of such person on or
          after July 22, 1994, whether the moneys, rights to moneys, or
          other intangible property becomes unclaimed funds prior to
          or on or after that date.

Ohio Rev. Code Ann. §169.01(D)(1) (West 2002).

Ohio attorneys who meet the statutory definition of “holders,” would fall under a
statutory duty to report “unclaimed funds.”

“Unclaimed funds” are defined in Sections 169.01 (B)(1) and 169.02 of the Ohio
Revised Code.

  R.C. 160.01(B)(1) “Unclaimed funds” means any moneys, rights to
  moneys, or intangible property, described in section 169.02 of the
  Revised Code, when as shown by the records of the holder, the
  owner has not, within the times provided in section 169.02 of the
  Revised Code, done any of the following:

      (a) Increased, decreased, or adjusted the amount of such funds;

      (b) Assigned, paid premiums, or encumbered such funds;

      (c) Presented an appropriate record for the crediting of such
          funds or received payment of such funds by check, draft, or
          otherwise;

      (d) Corresponded with the holder concerning such funds;

      (e) Otherwise indicated an interest in or knowledge of such
          funds;

      (f) Transacted business with the holder.

Ohio Rev. Code Ann. §169.01(B)(1) (West 2002).

Pursuant to R.C. 169.02(J) funds held by a “holder” as a fiduciary for benefit of
another are considered unclaimed funds.

  R.C. 169.02 Subject to division (B) of section 169.01 of the Revised
  Code, the following constitute unclaimed funds:

Op. 2005-10 4

          (J) Subject to division (M)(2) of this section, all moneys,
          rights to moneys, or other intangible property, and any
          income or increment on them, held or owed by a holder
          which is a fiduciary for the benefit of another, or a fiduciary
          or custodian of a qualified retirement plan or individual
          retirement arrangement under section 401 or 408 of the
          Internal Revenue Code, unclaimed for three years after the
          final date for distribution.

Ohio Rev. Code Ann. §169.02(J) (West Supp. 2005).

Legal questions regarding an attorney’s statutory duty to report unclaimed funds
should be directed to legal counsel in the Department of Commerce, Unclaimed
Funds Division.

As to the question of an attorney’s ethical duty, it is the Board’s view that when an
attorney uses diligent efforts to locate a client at the client’s last known address,
but the client’s whereabouts are unknown the reporting of unclaimed funds,
pursuant to Ohio law upon reaching the statutory dormancy period, does not
violate an attorney’s ethical duty to preserve client funds.

In conclusion, the Board advises that an attorney does not violate the ethical duty
to preserve a client’s funds under DR 9-102(A) and the ethical duty to promptly
deliver funds to a client under DR 9-102(B)(4) by reporting “unclaimed funds”
pursuant to R.C. Chapter 169, so long as the attorney has diligently tried to
contact the client at the last known address and the client’s whereabouts are
unknown.

Advisory Opinions of the Board of Commissioners on Grievances and
Discipline are informal, nonbinding opinions in response to
prospective or hypothetical questions regarding the application of the
Supreme Court Rules for the Government of the Bar of Ohio, the
Supreme Court Rules for the Government of the Judiciary, the Code
of Professional Responsibility, the Code of Judicial Conduct, and the
Attorney’s Oath of Office.

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