Ethics Opinion 90

Ethics Opinion 90

10.7.1968

By Committee on Professional Ethics

NEW YORK STATE BAR ASSOCIATION

Professional Ethics Committee Opinion

Opinion #90 – 10/07/1968 (17-68)

Topic:  Escrow Funds
Digest:  Deposit of client’s funds in interest-bearing savings account
Canon:  Former Canon 11

QUESTION

May an attorney who is holding client’s funds in escrow deposit those funds in an interest bearing savings account?

OPINION

This is largely a question of law rather than ethics, and this Committee does not answer questions of law.  The lawyer’s professional duty is to treat the funds in all respects as the client’s property and if any income is realized on the funds, it would, of course, belong to the client. (N.Y. City 181 and 590; ABA Inf. 859.)Whether it is proper to deposit the funds in an interest bearing savings account will depend upon the circumstances. In some cases the client may believe he has the right of immediate withdrawal not subject to the notice and waiting period which sometimes applies to savings accounts.  In some cases, the right of immediate withdrawal may be immaterial and it would be to the client’s advantage to have the funds draw interest.  Basically, it is a matter of the attorney’s authority. The safest procedure would be to have the client’s specific instructions whenever possible.