Opinion #90 – 10/07/1968 (17-68)
bank, existing clients, escrow funds, legal fees, client funds, interest
Topic: Escrow Funds
Digest: Deposit of client’s funds in interest-bearing savings account
Canon: Former Canon 11
May an attorney who is holding client’s funds in escrow deposit those funds in an interest bearing savings account?
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.