What can a South Carolina lawyer do with stale, never-cashed trust-account checks owed to medical providers?

Plain-English summary

A lawyer had maintained a trust account for over sixteen years, used mainly to disburse personal-injury settlement proceeds rather than to hold client money. After many disbursements, a $400 balance remained, representing checks written to medical care providers that were many years old and would never be cashed. All client checks had cleared, and no client's interest exceeded $25. The lawyer asked whether the money could be donated to the South Carolina Office of Appellate Defense and, if not, to whom.

The committee concluded the funds could not be donated to the Office of Appellate Defense or any other entity. The uncashed checks appear to fall within the requirements of S.C. Code § 27-18-60, and donating them would violate Rule 1.15(b)'s requirements for safekeeping funds belonging to a third party. Instead, the lawyer should follow the procedures in S.C. Code § 27-18-10 and turn the money over to the South Carolina Department of Revenue.

Currency note

This opinion was issued in 1995, before the South Carolina Bar's adoption of the 2005 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer donate abandoned trust-account funds to a charity or public defender?

A: The committee concluded no. The uncashed checks belong to third parties under Rule 1.15(b), so donating them would violate the safekeeping rule.

Q: Where should the leftover funds go?

A: The committee said the lawyer should follow the unclaimed-property procedures in the South Carolina Code and turn the money over to the Department of Revenue.

Background and rules framework

The opinion applied Rule 1.15(b), the South Carolina counterpart to Model Rule 1.15, governing a lawyer's duty to safeguard and deliver funds belonging to third parties, read together with the state's unclaimed-property statute (S.C. Code §§ 27-18-10, 27-18-60).

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 1.15(b) / Model Rule 1.15: safekeeping funds belonging to third parties.

Statutes:

• S.C. Code §§ 27-18-10, 27-18-60: Uniform Unclaimed Property Act procedures.

See also

• SC Bar Ethics Op. 95-29: Disputed Liens on Settlement Funds
• SC Bar Ethics Op. 96-06: Credit Card Pre-Authorization for Fees

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-95-03/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 95-03

Lawyer A maintained a trust account for over sixteen years with one bank. It was generally used for the purpose of distributing the proceeds of personal injury settlements, not for holding money for clients. In the course of disbursing funds, numerous checks were written to medical care providers. After sixteen years, Lawyer A has a balance of $400 and all recent checks have cleared. All client checks have cleared. The balance represents un-cashed checks to medical care providers. Assume these checks are many years old and will never be cashed. No client has more than $25 in interest each. This was not really money which was given to Lawyer A by clients for safekeeping; instead, it constitutes un-cashed checks for medical bills (usually copies, etc.)

Question:
Can Lawyer A donate this money to the Office of Appellate Defense? If not, to whom can it be donated?

Summary:
Lawyer A cannot donate the money to the SC Office of Appellate Defense. The lawyer can follow the procedures set forth in Section 27-18-10 of the SC Code and turn the money over to the SC Dept. of Revenue.

Opinion:
The checks described appear to fall within the requirements of SC Code Section 27-18-60 and consequently donating the funds to the SC Office of Appellate Defense or any other entity would violate the provisions of Rule 1.15(b) concerning the safekeeping of funds belonging to a third party.