On October 30, 2012, the Missouri Supreme Court amended Rule 4-1.15 regarding duties related to the safekeeping of property. In addition to presenting the previous rules in a more organized manner, the amended rules, which are effective July 1, 2013, also pose new duties and responsibilities to attorneys that are charged with maintaining client and third-party funds within trust accounts.
Rule 4-1.15 is now conveyed within the four following categories, each of which gives detail on the responsibilities and requirements of the law:
- Rule 4-145 explains definitions for the safekeeping of property, IOLTA accounts and non-IOLTA accounts
- Rule 4-1.15 outlines the duty provisions for the safekeeping of property
- Rule 4-1.155 explains the provisions for maintaining IOLTA accounts
- Rule 4-1.22 reinforces the duties for the retention of client files
Key Modifications To The Rules:
- Provides a more detailed definition of client trust accounts that addresses IOLTA accounts and non-IOLTA accounts.
- Signing authority related to client accounts must be carried out directly by the responsible attorney or directly under the responsible attorney's supervision.
- States that, "withdrawal (from a trust account) shall be made only by check and made payable to a named payee, and not to cash, or by authorized electronic transfer."
- There should be no split deposits, and the records of such deposits shall be detailed and identifiable.
- Attorneys are required to delay disbursement until funds are cleared and collected by a financial institution.
- A prompt reconciliation must be performed among the following items: 1) receipts and disbursements journals, 2.) ledgers, 3.) bank statements to clients, and 4.) other documentation considered to be "necessary for a complete understanding of the trust account transactions." The definition of "other documentation" should be considered within context of each client situation. See the links at the conclusion of this article for additional information.
- The provisions related to the minimum documentation requirements for trust accounts were also revisited. For a complete text of these provisions, see the links at the conclusion of this article.
- Rules for file retention contain the same provisions, as attorneys are required to securely store client files for 10 years after completion or termination of the representation. Trust account documentation also falls under this requirement.
- Attorneys are required to make "reasonable arrangements for the maintenance of client trust account records" in the event a firm dissolves.
For further information on Rule 4-1.14, the previous rule, click here.
For further information on the new rules, Rule 4-1.145, 4-1.15, 4-1.155, and 4-1.22, click here.
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