Rule 1.15B - Account Requirements for LLPs Practicing in Firms Without Lawyers(a) Every LLP in private practice in a firm without lawyers in this state shall maintain in the LLP's own name, or in the name of the LLP's firm:(1) A trust account or accounts, separate from any business and personal accounts and from any other fiduciary accounts that the LLP or the firm may maintain, into which the LLP shall deposit, or shall cause the firm to deposit, all funds entrusted to the LLP's care and any advance payment of fees that have not been earned or advance payment of expenses that have not been incurred. An LLP shall not be required to maintain a trust account when the LLP is not holding such funds or payments.(2) A business account or accounts into which the LLP shall deposit, or cause the firm to deposit, all funds received for legal services. Each business account, as well as all deposit slips and all checks drawn thereon, shall be prominently designated as a "business account," an "office account," an "operating account," or a "professional account," or with a similarly descriptive term that distinguishes the account from a trust account and a personal account.(b) One or more of the trust accounts may be a Colorado Lawyer Trust Account Foundation ("COLTAF") account. A "COLTAF account" is a pooled trust account for funds of clients or third persons that are nominal in amount or are expected to be held for a short period of time, and as such would not be expected to earn interest or pay dividends for such clients or third persons in excess of the reasonably estimated cost of establishing, maintaining, and accounting for trust accounts for the benefit of such clients or third persons. Interest or dividends paid on a COLTAF account shall be paid to COLTAF, and the LLP and the firm shall have no right or claim to such interest or dividends.(c) Each trust account, as well as all deposits slips and checks drawn thereon, shall be prominently designated as a "trust account," provided that each COLTAF account shall be designated as a "COLTAF Trust Account." A trust account may bear any additional descriptive designation that is not misleading.(d) Except as provided in this paragraph (d), each trust account, including each COLTAF account, shall be maintained in a financial institution that is approved by the Attorney Regulation Counsel pursuant to Rule 1.15E. If each client and third person whose funds are in the account is informed in writing by the LLP that Regulation Counsel will not be notified of any overdraft on the account, and with the informed consent of each such client and third person, a trust account in which interest or dividends are paid to the clients or third persons need not be in an approved institution.(e) Each trust account, including each COLTAF account, shall be an interest-bearing, or dividendpaying, insured depository account; provided that, with the informed consent of each client or third person whose funds are in the account, an account in which interest or dividends are paid to clients or third persons need not be an insured depository account. For the purpose of this provision, an "insured depository account" shall mean a government insured account at a regulated financial institution, on which withdrawals or transfers can be made on demand, subject only to any notice period which the financial institution is required to reserve by law or regulation.(f) The LLP may deposit, or may cause the firm to deposit, into a trust account funds reasonably sufficient to pay anticipated service charges or other fees for maintenance or operation of the account. Such funds shall be clearly identified in the LLP's or firm's records of the account.(g) All funds entrusted to the LLP shall be deposited in a COLTAF account unless the funds are deposited in a trust account described in paragraph (h) of this Rule. The foregoing requirement that funds be deposited in a COLTAF account does not apply in those instances where it is not feasible for the LLP or the firm to establish a COLTAF account for reasons beyond the control of the LLP or firm, such as the unavailability in the community of a financial institution that offers such an account; but in such case the funds shall be deposited in a trust account described in paragraph (h) of this Rule.(h) If funds entrusted to the LLP are not held in a COLTAF account, the LLP shall deposit, or shall cause the firm to deposit, the funds in a trust account that complies with all requirements of paragraphs (c), (d), and (e) of this Rule and for which all interest earned or dividends paid (less deductions for service charges or fees of the depository institution) shall belong to the clients or third persons whose funds have been so deposited. The LLP and the firm shall have no right or claim to such interest or dividends.(i) If the LLP or firm discovers that funds of a client or third person have mistakenly been held in a COLTAF account in a sufficient amount or for a sufficiently long time so that interest or dividends on the funds being held in such account exceeds the reasonably estimated cost of establishing, maintaining, and accounting for a trust account for the benefit of such client or third person (including without limitation administrative costs of the LLP or firm, bank service charges, and costs of preparing tax reports of such income to the client or third person), the LLP shall request, or shall cause the firm to request, a refund from COLTAF, for the benefit of such client or third persons, of the interest or dividends in accordance with written procedures that COLTAF shall publish and make available through its website and shall provide to any LLP or firm upon request.(j) Every LLP or firm maintaining a trust account in this state shall, as a condition thereof, be conclusively deemed to have consented to the reporting and production requirements by financial institutions mandated by Rule 1.15E and shall indemnify and hold harmless the financial institution for its compliance with such reporting and production requirement.(k) If an LLP discovers that the LLP does not know the identity or the location of the owner of funds held in the LLP's COLTAF account, or the LLP discovers that the owner of the funds is deceased, the LLP must make reasonable efforts to identify and locate the owner or the owner's heirs or personal representative. If, after making such efforts, the LLP cannot determine the identity or the location of the owner, or the owner's heirs or personal representative, the LLP must either (1) continue to hold the unclaimed funds in a COLTAF or other trust account or (2) remit the unclaimed funds to COLTAF in accordance with written procedures published by COLTAF and available through its website or upon request. An LLP remitting unclaimed funds to COLTAF must keep a record of the remittance pursuant to Rule 1.15D(a)(1)(C). If, after remitting unclaimed funds to COLTAF, the LLP determines both the identity and the location of the owner or the owner's heirs or personal representative, the LLP shall request a refund for the benefit of the owner or the owner's estate, in accordance with written procedures that COLTAF shall publish and make available through its website and shall provide upon request.Colo. Lic. Paraprofe. R. Profe. Cond. 1.15B
Amended and Adopted by the Court, En Banc, April 13, 2023, effective 7/1/2023.