What should a Mississippi lawyer do with excess funds in a client trust account when the proper owner cannot be determined?

Plain-English summary

The Committee addressed an attorney whose trust account had accumulated a balance of about $500 over several years of practice. The attorney could not determine where the excess funds came from or to whom they belonged. All money that could be identified as belonging to clients had already been refunded, and the roughly $500 balance represented funds whose ownership could not be traced. The question was what the attorney should do with the excess balance.

The opinion analyzed the question under Mississippi Rule of Professional Conduct 1.15, which sets the standard of care for property of clients in a lawyer's possession, requiring such funds to be held separate, kept in a separate account, and recorded with complete records preserved for seven years after the representation ends. The opinion drew on Mississippi Opinion No. 104 (rendered June 6, 1985), which addressed similar circumstances, and reasoned that because the attorney could not determine how or why the excess funds were deposited, it had to be presumed that the funds were client funds rather than funds to which the attorney was personally entitled. If that presumption could not be rebutted, the excess funds never became the lawyer's property.

The opinion concluded that, taking Rule 1.15 and Opinion No. 104 together with the attorney's inability to determine proper ownership, the attorney was bound as a matter of law and ethics to dispose of the funds under the Mississippi Uniform Disposition of Unclaimed Property Act, Mississippi Code of 1972, Annotated and Amended, Section 89-12-1, et seq.

Currency note

This opinion was issued in 1990, before the adoption of the Mississippi Rules of Professional Conduct effective June 22, 1994 (amended February 5, 1999). Mississippi did not adopt the ABA's 2002 Ethics 2000 revisions wholesale, but subsequent rule amendments, statutory changes to the unclaimed-property law, or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules and the current unclaimed-property statute before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: What should a lawyer do with leftover trust money that cannot be traced to any client?

A: The opinion concluded the funds are presumed to be client funds and must be disposed of under the Mississippi Uniform Disposition of Unclaimed Property Act.

Q: Can the lawyer keep unidentified excess funds in the trust account?

A: Per the opinion, no. Because the source could not be determined, the funds were presumed to be client funds, and if that presumption could not be rebutted the excess never became the lawyer's property.

Q: What rule governs unidentified trust-account funds?

A: The opinion applied Mississippi Rule 1.15 (safekeeping property) together with Mississippi Opinion No. 104 (1985), which had addressed similar facts.

Background and rules framework

The opinion interpreted Mississippi Rule of Professional Conduct 1.15 (cf. Model Rule 1.15), which governs the safekeeping of client and third-party property. At the time of the opinion, Rule 1.15 required a lawyer to hold such property separate from the lawyer's own, keep funds in a separate account, maintain complete records, and preserve those records for seven years after the representation ended. The opinion paired that rule with the Mississippi Uniform Disposition of Unclaimed Property Act (Miss. Code Ann. Section 89-12-1, et seq.) as the mechanism for funds whose owner could not be found.

Citations and references

Rules of Professional Conduct (Mississippi; cf. Model Rules):

• MRPC 1.15 (safekeeping property) (cf. Model Rule 1.15).

Statutes:

• Mississippi Uniform Disposition of Unclaimed Property Act, Miss. Code Ann. Section 89-12-1, et seq.

Other opinions cited:

• Mississippi Opinion No. 104 (June 6, 1985): treatment of untraceable trust-account funds.

See also

• MS Bar Ethics Op. 243: Safekeeping and Disposition of Unclaimed Funds
• MS Bar Ethics Op. 184: Paying a Third Party From Settlement Funds
• Ala. Bar Ethics Op. 1988-92: Unclaimed Client Trust Funds Escheat to State

Source

• Landing page: https://www.msbar.org/ethics-discipline/ethics-opinions/formal-opinions/178/
• Original PDF: https://www.msbar.org/media/1446/35a_et_op_178.pdf

Original opinion text

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

ETHICS OPINION NO. 178

OF THE MISSISSIPPI BAR

RENDERED December 07, 1990

TRUST ACCOUNTS- Funds held in an attorney's trust account of which proper ownership cannot be determined should be disposed of pursuant to the Mississippi Uniform Disposition of Unclaimed Property Act.

The Ethics Committee of the Mississippi State Bar has been requested to render an opinion on the following facts:

An attorney's trust account has accumulated a balance of approximately $500.00 over several years of law practice. The attorney has been unable to determine where the excess funds came from and to whom such monies may properly belong. All monies determined to belong to clients have previously been refunded. The approximate $500.00 balance represents funds of which ownership cannot be traced.

The question presented to the Ethics Committee is what the attorney should do with the excess trust account balance.

M.R.P.C. Rule 1.15 Safe Keeping Property, sets forth the standard of care to be followed by attorneys in regard to property (monies) of clients that is in the attorney's possession in connection with representation. Rule 1.15(a) provides that:

A lawyer shall hold property of clients or third persons that is in the lawyer's possession in connection with representation separate from the lawyer's own property. Funds shall be kept in a separate account. . Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of seven years after termination of representation."

Rule 1.15(a and b) requires that a lawyer maintain complete records of all funds, securities and other properties of a client coming into possession of the lawyer and render appropriate accounts to his client regarding them.

Opinion No. 104 of the Mississippi State Bar rendered June 6, 1985, addressed similar circumstances as to those presented hereinabove. Since the attorney requesting the opinion cannot make an accurate determination as to how or why the excess funds were deposited in his trust account, it must be presumed that the funds deposited in

his trust account were "funds of clients and not funds to which the attorney would be entitled personally." If this presumption cannot be rebutted, the excess funds never become the property of the lawyer.

Taking into consideration M.R.P.C. Rule 1.15 and Opinion No. 104, as well as the attorney's inability to determine proper ownership of the excess funds in his trust account, the attorney is bound as a matter of law and ethics to dispose of such funds under the provisions of the Mississippi Uniform Disposition of Unclaimed Property Act, Mississippi Code of 1972, Annotated and Amended, Section 89-12-1, et seq.