Informal Opinion Number: 970075
Reference Note: Effective July 1, 2016, subdivision 4-1.15(f) of Rule 4 was repealed and a new subdivision 4-1.15(f) adopted in lieu thereof. This opinion is based on Rule 4-1.15 in effect prior to that date.
Reference Note: Rule 4-1.15 was amended, effective July 1, 2013. This opinion is based on the rule in effect prior to that date. Please see the July 1, 2013 version of Rule 4-1.15.
QUESTION: Attorney is holding settlement funds that are disputed between the client and a third party asserting a lien. The non-disputed funds have been distributed. May Attorney hold these funds in an interest bearing account.
ANSWER: Attorney may hold the funds for a reasonable period of time. While Attorney holds the funds, they may be in a non-IOLTA interest bearing account as long as the interest goes to the person to whom the funds belong. However, Attorney should not continue to hold the funds if progress toward settlement is not being made. Under those circumstances, it will be necessary for Attorney to file an interpleader action. Attorney should advise both parties of Attorney´s intent to file such an action far enough in advance that they will still be able to settle and avoid the expenses of that action.
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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