Does a lawyer have to keep an open client trust account if his practice rarely holds client money?

Plain-English summary

A lawyer reported that his "attorney's" account (presumably his trust account) had seen no transaction in five years because his practice was confined to estate work, and he held client money only when serving as a fiduciary in an estate, in which case he opened a separate account for those funds. He asked whether he needed to maintain an open trust account at all.

The controlling rule was DR 9-102(A), requiring that all client funds (other than advances for costs and expenses) be deposited in identifiable accounts, with no lawyer funds deposited except as the rule allows. The committee relied on LE Op. 585, which held it not improper for a lawyer to deposit directly into his operating or personal account funds that are earned, undisputed fees and do not belong in part to a client; it found that opinion dispositive.

The committee concluded that, assuming the lawyer's practice was such that he did not receive any client proceeds (such as personal injury or real estate settlement funds) and received no advance fees (part of which would obviously be unearned when received), it would not be necessary for him to maintain an open trust account (also citing LE Op. 510). It cautioned, however, that should an occasion arise when he came into possession of client funds or advance fees, it would then be necessary to open a trust account immediately to hold those monies.

Currency note

This opinion was issued in 1990, under Virginia's former Code of Professional Responsibility (the disciplinary rule it cites), before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. As the committee note observes, current Rule 1.15 applies whenever a lawyer holds money as a fiduciary. 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 Treat this page as historical context, not current guidance.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: Must every lawyer keep an open trust account at all times?

A: Under this 1990 opinion, no. The committee concluded that a lawyer who does not receive client proceeds and takes no advance fees need not maintain an open trust account.

Q: What if the lawyer later receives client funds?

A: The committee cautioned that should he ever come into possession of client funds or advance fees, it would then be necessary to open a trust account immediately to hold those monies.

Q: Why do advance fees require a trust account?

A: The committee treated advance fees as funds "part of which would obviously be unearned at the time of receipt," meaning they belong in part to the client until earned, so they cannot simply go into the lawyer's own account.

Background and rules framework

The opinion interpreted former Virginia DR 9-102(A) (deposit and safekeeping of client funds). The safekeeping-of-property rule is now Virginia Rule 1.15, which, as the committee note states, applies whenever a lawyer holds money as a fiduciary.

Citations and references

Rules of Professional Conduct:

• Former Virginia DR 9-102(A) (Code of Professional Responsibility)
• ABA Model Rule 1.15 (safekeeping property)

Other opinions cited:

• Virginia LE Op. 585: a lawyer may deposit earned, undisputed fees directly into an operating or personal account.
• Virginia LE Op. 510.

See also

• VA LEO 1606: Fees Compendium (Retainers, Trust)
• VA LEO 1835: Disbursing Uncollected Trust Funds
• VA LEO 1466: Wet Settlement Act, Separate Counsel
• VA LEO 1848: Credit Card Fees and Trust Accounts

Source

• Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
• Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/1372.pdf

Original opinion text

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

Committee Opinion
July 24, 1990
LEGAL ETHICS OPINION 1372

TRUST ACCOUNT – COMINGLING:
CIRCUMSTANCES UNDER WHICH
ATTORNEY WOULD NOT BE
REQUIRED TO MAINTAIN OPEN
CLIENT TRUST ACCOUNT.

You have advised that there has been no transaction in your "attorney's" account, presumably your trust account, for the past five years. You further indicate that your practice is confined to estate work and you only have client's money in your possession when you are the fiduciary in an estate. In those cases, you open a separate account to accommodate those funds. You have asked the Committee to consider whether it is necessary for you to maintain an open trust account in view of the circumstances in which you operate. The appropriate and controlling disciplinary rule is DR:9-102(A), which requires in pertinent part that: All funds of clients paid to a lawyer ..., other than advances for costs and expenses, shall be deposited in one or more identifiable bank accounts ... and no funds belonging to the lawyer ... shall be deposited therein except as follows: (2) Funds belonging in part to a client and in part presently or potentially to the lawyer ... must be deposited therein, but the portion belonging to the lawyer ... may be withdrawn when due unless disputed portion shall not be withdrawn until the dispute is finally resolved. The Committee has earlier opined that it is not improper for an attorney to deposit directly into the attorney's general operating account or the attorney's personal bank account all funds received from clients which are earned undisputed attorney's fees and which do not constitute funds belonging in part to a client and in part, present or potentially, to the lawyer or law firm. (See LE Op. 585.) The Committee believes that the cited Legal Ethics Opinion is dispositive of the question you raise. Therefore, the Committee is of the opinion that, assuming your practice is such that you do not receive any proceeds related to clients' actions, such as personal injury or real estate settlement funds, and assuming further that you do not receive any advance fees, part of which would obviously be unearned at the time of receipt, it would not be necessary for you to maintain an open trust account. (See also LE Op. 510) The Committee cautions, however, that, should an occasion arise when you do come into possession of client funds or advance fees, it would then be necessary that a trust account be opened immediately to accommodate such monies. Committee Opinion July 24, 1990

Committee Opinion
July 24, 1990
Legal Ethics Committee Notes. – Rule 1.15 applies whenever a lawyer holds money as a fiduciary.