Rule LLLT RPC 1.15A - SAFEGUARDING PROPERTY(a) This Rule applies to property of clients or third persons in an LLLT's possession in connection with a representation.(b) An LLLT must not use, convert, borrow, or pledge client or third person property for the LLLT's own use.(c) An LLLT must hold property of clients and third persons separate from the LLLT's own property.(1) An LLLT must deposit and hold in a trust account funds subject to this Rule pursuant to paragraph (h) of this Rule.(2) Except as provided in Rule 1.5(f), and subject to the requirements of paragraph (h) of this Rule, an LLLT shall deposit into a trust account legal fees and expenses that have been paid in advance, to be withdrawn by the LLLT only as fees are earned or expenses incurred.(3) An LLLT must identify, label, and appropriately safeguard any property of clients or third persons other than funds. The LLLT must keep records of such property that identify the property, the client or third person, the date of receipt, and the location of safekeeping. The LLLT must preserve the records for seven years after return of the property.(d) An LLLT must promptly notify a client or third person of receipt of the client or third person's property.(e) An LLLT must promptly provide a written accounting to a client or third person after distribution of property or upon request. An LLLT must provide at least annually a written accounting to a client or third person for whom the LLLT is holding funds.(f) Except as stated in this Rule, an LLLT must promptly pay or deliver to the client or third person the property which the client or third person is entitled to receive.(g) If an LLLT possesses property in which two or more persons (one of which may be the LLLT) claim interests, the LLLT must maintain the property in trust until the dispute is resolved. The LLLT must promptly distribute all undisputed portions of the property. The LLLT must take reasonable action to resolve the dispute.
(h) An LLLT must comply with the following for all trust accounts: (1) No funds belonging to the LLLT may be deposited or retained in a trust account except as follows: (i) funds to pay bank charges, but only in an amount reasonably sufficient for that purpose;(ii) funds belonging in part to a client or third person and in part presently or potentially to the LLLT must be deposited and retained in a trust account, but any portion belonging to the LLLT must be withdrawn at the earliest reasonable time; or(iii) funds necessary to restore appropriate balances.(2) An LLLT must keep complete records as required by Rule 1.15B.(3) An LLLT may withdraw funds when necessary to pay client costs. The LLLT may withdraw earned fees only after giving reasonable notice to the client of the intent to do so, through a billing statement or other document.(4) Receipts must be deposited intact.(5) All withdrawals must be made only to a named payee and not to cash. Withdrawals must be made by check or by electronic transfer.(6) Trust account records must be reconciled as often as bank statements are generated or at least quarterly. The LLLT must reconcile the check register balance to the bank statement balance and reconcile the check register balance to the combined total of all client ledger records required by Rule 1.15B(a)(2).(7) An LLLT must not disburse funds from a trust account until deposits have cleared the banking process and been collected, unless the LLLT and the bank have a written agreement by which the LLLT personally guarantees all disbursements from the account without recourse to the trust account.(8) Disbursements on behalf of a client or third person may not exceed the funds of that person on deposit. The funds of a client or third person must not be used on behalf of anyone else.(9) Only an LLLT or a lawyer admitted to practice law may be an authorized signatory on the account.(i) Trust accounts must be interest-bearing and allow withdrawals or transfers without any delay other than notice periods that are required by law or regulation and meet the requirements of ELC 15.7(d) and (e). In the exercise of ordinary prudence, an LLLT may select any financial institution authorized by the Legal Foundation of Washington (Legal Foundation) under ELC15.7(c). In selecting the type of trust account for the purpose of depositing and holding funds subject to this Rule, an LLLT shall apply the following criteria: (1) When client or third-person funds will not produce a positive net return to the client or third person because the funds are nominal in amount or expected to be held for a short period of time the funds must be placed in a pooled interest-bearing trust account known as an Interest on Limited License Legal Technician's Trust Account or IOLTA. The interest earned on IOLTA accounts shall be paid to, and the IOLTA program shall be administered by, the Legal Foundation of Washington in accordance with ELLLTC 15.4 and ELC 15.7(e).(2) Client or third-person funds that will produce a positive net return to the client or third person must be placed in one of the following two types of non-IOLTA trust accounts, unless the client or third person requests that the funds be deposited in an IOLTA account: (i) a separate interest-bearing trust account for the particular client or third person with earned interest paid to the client or third person; or(ii) a pooled interest-bearing trust account with sub-accounting that allows for computation of interest earned by each client or third person's funds with the interest paid to the appropriate client or third person.(3) In determining whether to use the account specified in paragraph (i)(1) or an account specified in paragraph (i)(2), an LLLT must consider only whether the funds will produce a positive net return to the client or third person, as determined by the following factors: (i) the amount of interest the funds would earn based on the current rate of interest and the expected period of deposit;(ii) the cost of establishing and administering the account, including the cost of the LLLT's services and the cost of preparing any tax reports required for interest accruing to a client or third person's benefit; and(iii) the capability of financial institutions to calculate and pay interest to individual clients or third persons if the account in paragraph (i)(2)(ii) is used.(4) The provisions of paragraph (i) do not relieve an LLLT or law firm from any obligation imposed by these Rules or the ELLLTC.Wash. R. Limi. Lic. Leg. Tech. Pro. Cond. LLLT RPC 1.15A
Adopted effective2/3/2015. Amended effective 6/4/2019; Amended effective 2/1/2021.Comment
[1] Rule 1.15A was adapted from Lawyer RPC 1.15A with no substantive changes except to reflect limitations on the authorized scope of an LLLT's practice. Otherwise, this Rule applies to LLLTs analogously. The Comments to Lawyer RPC 1.15A provide important guidance to the correct interpretation and application of this Rule.
[2] Lawyer RPC 1.15A(a) contemplates that lawyers may act as escrow agents for the closing of a purchase and sale of real estate or personal property, a practice area that is not contemplated by APR 28. Accordingly, there is no counterpart in this Rule to Lawyer RPC 1.15A(a)(2).