Ezel / Ethics Opinions / WSBA
WSBA 2009

Can a lawyer hold client trust funds in a CDARS certificate-of-deposit account that carries a withdrawal delay or early-withdrawal penalties?

Short answer: No. The committee concluded that client trust funds must be capable of withdrawal without delay unless law or regulation requires it, and a client cannot consent to such a delay, so a CDARS account with a two-day delay is not a permitted depository under RPC 1.15A.

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This page answers the general question as of 2009. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.

Currency note: this opinion is from 2009
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
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 Not binding precedent.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) is the authoritative source for any reliance.

Plain-English summary

The inquiry asked whether the RPCs allow client funds to be deposited in a CDARS (Certificate of Deposit Account Registry Service) certificate-of-deposit system when the funds are not immediately available or when early-withdrawal penalties apply. The committee concluded that an attorney is not required to, but may, take extra precautions to protect client trust funds held under RPC 1.15A. However, to comply with RPC 1.15A, all client trust funds must be capable of withdrawal without delay unless the delay is caused by regulation or law, and the RPCs do not allow a client to give informed consent to such delays. Because the CDARS account described carried a two-day delay period, the committee concluded it would not be permitted as a depository device for client trust funds under RPC 1.15A.

In practice

Under the Washington rules as they stood at the time of the opinion, the committee read RPC 1.15A to require that client trust funds remain available for withdrawal without delay, with an exception only for delays imposed by law or regulation. The opinion holds that a CDARS certificate-of-deposit account with a built-in two-day delay fails that standard and is not a permitted depository, and that a client cannot waive the requirement by consenting to the delay. The committee noted a lawyer may take additional, optional precautions to protect trust funds, but not at the cost of immediate availability.

Common questions

Q: Can a lawyer put client trust money in a CDARS certificate of deposit?

A: Not where it imposes a withdrawal delay. The committee concluded a CDARS account with a two-day delay is not a permitted depository under RPC 1.15A, because trust funds must be capable of withdrawal without delay.

Q: Can the client consent to the delay or early-withdrawal penalty?

A: No. The committee said the RPCs do not allow a client to give informed consent to such delays in access to trust funds.

Q: Are extra protective measures for trust funds allowed?

A: Yes, optionally. The committee said an attorney is not required to but may take extra precautions to protect client trust funds, so long as the funds remain capable of withdrawal without delay.

Background and rules framework

The opinion interpreted Washington RPC 1.15A (Model Rule 1.15, safekeeping client property), focusing on the requirement that client trust funds be capable of withdrawal without delay unless a delay is imposed by law or regulation. The committee read the rule to preclude a client waiver of that immediate-availability requirement.

Citations and references

Rules of Professional Conduct:

  • Model Rule 1.15 / Washington RPC 1.15A (safekeeping client property; immediate availability of trust funds)

See also

Source

Original opinion text

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

Advisory Opinion: 2196
Year Issued: 2009
RPC(s): 1.15A
Subject: Deposit of client funds into CDARS certificate of deposit system

I. QUESTION PRESENTED:

Do the RPC’s allow client funds to be deposited in a CDARS certificate of deposit system if funds are not immediately available or if early-withdrawal penalties apply?

II. CONCLUSION:

An attorney is not required to, but may take extra precautions to protect client trust funds held under RPC 1.15A. However, to comply with RPC 1.15A, all client trust funds must be capable of withdrawal without delay, unless the delay is caused by regulation or law. The RPC’s do not allow a client to give informed consent to those delays. The CDARS account described by inquirer which carries a two day delay period would, therefore, not be permitted as a depository device for client trust funds under RPC 1.15A.

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