Can a Washington lawyer keep a client trust account at a brokerage house instead of an insured bank?

Plain-English summary

The committee had learned that some lawyers maintained client trust accounts with brokerage houses or other institutions that were not "qualified public depositories" as that term is used in RPC 1.14(c). That rule required a trust account to be an interest-bearing account in a bank, credit union, or savings and loan association, selected with ordinary prudence, authorized to do business in Washington and insured by one of the listed federal or state funds, or else an institution that is a "qualified public depository" as defined in RCW 39.58.010(2).

The committee concluded that the requirements of RPC 1.14(c) are mandatory and may not be waived by a client. If a lawyer elected to maintain an account at something other than an insured bank, credit union, or savings and loan association, the lawyer had to have ascertained that the institution is a "qualified public depository" as defined in RCW 39.58.010(2).

Currency note

This opinion (formerly Published Informal Opinion 86-3) was issued in 1986, before the 2006 revisions to the Washington Rules of Professional Conduct. The trust-account rule was renumbered (the current Washington safekeeping rule corresponds to Model Rule 1.15), and the list of permissible depositories and the statutory cross-reference may have changed. Treat this page as historical context, not current guidance.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 hold client trust funds at a brokerage house?

A: Only if it qualifies. The committee said a lawyer using anything other than an insured bank, credit union, or savings and loan association had to ascertain that the institution is a "qualified public depository" as defined in RCW 39.58.010(2).

Q: Can a client agree to waive the trust-account rule's requirements?

A: No. The committee concluded that the requirements of RPC 1.14(c) are mandatory and may not be waived by a client.

Q: What does RPC 1.14(c) require for the depository?

A: Per the rule quoted in the opinion, an interest-bearing trust account in a bank, credit union, or savings and loan association authorized to do business in Washington and insured by one of the listed funds, or an institution that is a "qualified public depository" under RCW 39.58.010(2).

Background and rules framework

The opinion interprets the rule then numbered Washington RPC 1.14(c), the client trust-account and safekeeping rule (corresponding to Model Rule 1.15). The committee read the rule's depository requirements as mandatory and not subject to client waiver, and tied any non-bank depository to the "qualified public depository" definition in RCW 39.58.010(2).

Citations and references

Rules of Professional Conduct:

• Washington RPC 1.14(c) (client trust accounts; permissible depositories), corresponding to Model Rule 1.15.

Statutes:

• RCW 39.58.010(2) (definition of "qualified public depository"), as quoted in the opinion.

See also

• WSBA Ethics Op. 949: no commingling of personal funds in a client trust account
• WSBA Ethics Op. 959: trust funds in a multi-state practice
• WSBA Ethics Op. 1010: trust-account interest earned before the IOLTA rule

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=80

Original opinion text

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

Advisory Opinion: 969
Year Issued: 1986
RPC(s): RPC 1.14(c), 86-3
Subject: Maintaining a trust account at a brokerage house [Informal Published Opinion 86-3]

[Formerly published as Published Informal Opinion 86-3. All Informal Opinions are consolidated in this database.]

It has come to the attention of the Rules of Professional Conduct Committee that some lawyers maintain client trust accounts with brokerage houses or other such institutions that are not "qualified public depositories" as that term is used in Rule 1.14(c) of the Rules of Professional Conduct. That rule requires that a trust account " ... shall be an interest-bearing trust account in any bank, credit union or savings and loan association, selected by a lawyer in the exercise of ordinary prudence, authorized by federal or state law to do business in Washington and insured by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, the Washington Credit Union Share Guaranty Association, or the Federal Savings and Loan Insurance Corporation, or which is a "qualified public depository" as defined in RCW 39.58.010 (2)." It is the opinion of the Committee that the requirements of RPC 1.14(c) are mandatory and may not be waived by a client. If a lawyer elects to maintain an account at something other than an insured bank, credit union or savings and loan association, the lawyer must have ascertained that the institution is a "qualified public depository" as defined in RCW 39.58.010 (2).