What is considered a misappropriation of trust accounting funds?

CosmoLex Team

Every state has their own rules regarding trust accounts, but they all prohibit the misappropriation of client funds. In order to avoid actions that can be interpreted as misappropriation and land you in an ethics violation, and even possibly result in being disbarred, you should be aware of what it constitutes. As an example of how serious the consequences can … Read More

Does a client trust account need to generate interest?

CosmoLex Team

Certain states require that client funds only be placed in accounts that generate interest[1]. Typically trust accounts, whether IOLTA or individual trust accounts generate interest.  The primary difference lies in where the interest goes. With IOLTA accounts, interest goes to a state foundation for the purposes of providing legal aid to those who would not be able to otherwise afford … Read More

What do I do with unclaimed trust accounting funds if I can’t locate my client?

CosmoLex Team

Lawyers are supposed to act as fiduciaries of client funds, acting in their best interests and protecting their assets. If you are seeing uncleared checks on reconciliations for more than a month or two, you have a duty to look into the funds and try to get them to your client. Additionally, funds may be lingering in trust accounts are … Read More