Informal Opinion Number: 2020-15
Adoption Date: 2020
QUESTION: Attorney deposited a settlement check in the trust account. When should Attorney distribute the client’s portion and Attorney’s fees from the settlement?
ANSWER: Rule 4-1.15(a)(6) prohibits Attorney from disbursing funds deposited in the trust account if Attorney has reasonable cause to believe the funds have not actually been collected by the financial institution and until a reasonable period of time has passed for the financial institution to collect the funds. Comment  provides guidance that “good funds” should be distinguished from funds from a deposit that has “cleared.” What constitutes a reasonable period of time may vary depending, but ten days after the date the deposit is recorded is presumed to be reasonable, unless Attorney has notice of a reason to wait longer on a specific deposit. A shorter period of time may be reasonable in some circumstances. If Attorney has information that causes doubt about the collection of the deposit, Attorney should delay disbursement and take additional measures to ensure collection. Rule 4-1.15, Comment . Once Attorney has reason to believe the funds have been collected by the financial institution, Attorney should disburse the funds promptly to the client. Rule 4-1.15(d). As to disbursement of Attorney’s fees, Comment  provides it should occur “reasonably promptly” after the settlement funds in the trust account become “good funds,” the client has been billed, and the client has had an opportunity to dispute the disbursement or otherwise has agreed to the disbursement. See Rule 4-1.15, Comment . Disbursing Attorney’s portion of the funds within a period of one month shall be presumed to be reasonably promptly. Rule 4-1.15, Comment .
Informal Opinions are ethics advisory opinions issued by the Office of Legal Ethics Counsel to members of the Bar about Rule 4 (Rules of Professional Conduct), Rule 5 (Complaints and Proceedings Thereon), and Rule 6 (Fees to Practice Law) pursuant to Missouri Supreme Court Rule 5.30(c). Written summaries of select Informal Opinions are published for informational purposes as determined by the Advisory Committee of the Supreme Court of Missouri pursuant to Rule 5.30(c). Informal opinion summaries are advisory in nature and are not binding. These opinions are published as an educational service and do not constitute legal advice.
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