Can a settlement attorney disburse loan funds from trust based on deposited financial instruments under the Wet Settlement Act?
Apply this to your situation
This page answers the general question as of 1986. Ask about yours and see what the current Virginia Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
The committee addressed whether an attorney may make disbursements from a trust account in accordance with the Virginia Wet Settlement Act, Va. Code § 6.1-2.10. It concluded it is not improper to do so when the disbursements are based on deposits of financial instruments in the forms, or issued by the entities, listed in the 1984 amendment to the Wet Settlement Act, citing Canon 9, Va. Code § 6.1-2.10 as amended, and its prior LE Op. 183.
Currency note
This opinion was issued in 1986, under Virginia's former Code of Professional Responsibility, before the Virginia State Bar's adoption of the Rules of Professional Conduct effective January 1, 2000. The opinion turns on the Virginia Wet Settlement Act as it stood after the 1984 amendment; that statute has since been recodified and amended. 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 Treat this page as historical context, not current guidance.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: Could a lawyer disburse settlement loan funds from trust before the deposited instruments cleared?
A: Under this 1986 opinion, it was not improper to disburse under the Wet Settlement Act where the disbursements rested on deposits of the financial instruments, or entities' instruments, listed in the statute's 1984 amendment.
Q: What did the committee tie the conclusion to?
A: It tied the conclusion to compliance with Va. Code § 6.1-2.10 as amended in 1984, and cited Canon 9 and its prior LE Op. 183.
Background and rules framework
The opinion applies Canon 9 of the former Code together with the Virginia Wet Settlement Act, Va. Code § 6.1-2.10 as amended in 1984, the statute governing the timing of disbursement of settlement proceeds. The handling of client and third-party funds in trust is now addressed by Virginia Rule 1.15, corresponding to ABA Model Rule 1.15.
Citations and references
Statutes:
- Va. Code § 6.1-2.10, as amended (Virginia Wet Settlement Act, 1984 amendment)
Other opinions cited:
- LE Op. 183 (relied on by the committee)
See also
- VA LEO 900: Disbursing Settlement Funds After Delivery of the Deed
- VA LEO 898: Disbursing Against a Cashier's Check After the Bank Closed
- VA LEO 783: A Settlement Lawyer Buying the Property
Source
- Landing page: https://vsb.org/Site/about/rules-regulations/leo-opinions.aspx
- Original PDF: https://www.vsb.org/common/Uploaded%20files/LEOs/0753.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
LEGAL ETHICS OPINION 753
DISBURSEMENT OF LOAN FUNDS.
It is not improper for an attorney to make disbursements from a trust account in accordance with § 6.1-2.10 of the Virginia Code (the Wet Settlement Act) when said disbursements are based upon deposits of financial instruments in the forms, and/or issued by entities, listed in the 1984 amendment to the Wet Settlement Act. [Canon 9; Va. Code § 6.1- 2.10, as amended; LE Op. 183]
Committee Opinion
February 13, 1986
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