Who is entitled to the interest earned on money a lawyer holds in a trust account, the lawyer or the client?
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This page answers the general question as of 1985. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The committee reviewed an inquiry under DR 9-102 about who is entitled to interest earned in IOLTA accounts where the lawyer has an ownership interest in a portion of the funds. The committee said the only advice it could give was that interest on a trust account goes to the individual who owns the funds.
The committee added that the underlying legal question, when ownership of the funds vests in the lawyer, was one it could not answer.
Currency note
This opinion was issued under Washington's former Code of Professional Responsibility, which the Rules of Professional Conduct later replaced. It was issued in 1985, before the 2006 revisions to the Washington 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 Treat this page as historical context, not current guidance.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: Who gets the interest earned on funds held in a lawyer's trust account?
A: The committee said interest on a trust account goes to the individual who owns the funds.
Q: What happens when the lawyer owns part of the money in the account?
A: The committee framed the question as one of who owns the funds; interest follows ownership. It said it could not decide when ownership of the funds vests in the lawyer, calling that an underlying legal question outside its role.
Q: Did the committee resolve when a lawyer becomes the owner of disputed funds?
A: No. It stated that the underlying legal issue of when ownership in the fund vests in the lawyer could not be answered by the committee.
Background and rules framework
The opinion arises under DR 9-102 of the Washington Code of Professional Responsibility then in force, the rule governing safekeeping of client and third-party funds. The trust-account duties DR 9-102 addressed are now found in Washington RPC 1.15A and 1.15B and in Model Rule 1.15. The committee treated the entitlement to interest as following ownership of the funds and declined to decide the underlying ownership question as a matter of law.
Citations and references
Rules of Professional Conduct:
- DR 9-102 (former Washington Code of Professional Responsibility): safekeeping of funds (trust-account duties now addressed by RPC 1.15A / RPC 1.15B / Model Rule 1.15).
See also
- WSBA Ethics Op. 1010: who is entitled to interest on a lawyer's trust account
- ABA Formal Op. 475: safeguarding fees subject to division
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=6
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Advisory Opinion: 845
Year Issued: 1985
RPC(s): DR 9-102
Subject: Ownership of interest on trust account
The Committee reviewed an inquiry regarding DR 9-102 and entitlement to interest earned in IOLTA accounts in which the lawyer has an ownership interest in a portion of the funds. The only advice the Committee could give was that the interest on a trust account goes to the individual who owns the funds. The underlying legal issue of when ownership in the fund vests in the lawyer can not be answered by the Committee.
[Editor's Note: The Code of Professional Responsibility was superseded by the Rules of Professional Conduct after this opinion was issued.]
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