102919 NYEO, ETH 1176

• Case Date: October 29, 2019
• Court: New York

ETH 1176 Ethics Opinion 1176 New York Ethics Opinion New York State Bar Association Committee on Professional Ethics October 29, 2019          Topic: Escrow Account          Digest: A lawyer may make nominal deposits of the lawyer's own funds into a trust or escrow account to avoid the account being closed for inactivity or failure to maintain minimum balance.          Rules: 1.15(a), (b)(1), (b)(3)                    FACTS          1. The inquirer's trust or escrow account has had a zero balance of funds for a period of time. The inquirer apprehends that the bank may close the account for inactivity or failure to maintain the requisite minimum balance. The inquirer is concerned that, if the inquirer deposits lawyer funds into the account to avoid bank sanction and thereafter receives client funds for deposit into the trust or escrow account, the inquirer could be impermissible commingling funds.          QUESTION          2. May a lawyer make a nominal deposit of the lawyer's own funds to avoid having the lawyer's trust or escrow account closed for inactivity or failure to maintain a minimum balance?          OPINION          3. The N.Y. Rules of Professional Responsibility (the “Rules”) regulate lawyer trust or escrow accounts in Rule 1.15. For current purposes, three provisions of Rule 1.15 govern the conclusion of the inquiry. First, a lawyer who is in possession of funds belonging to another person incident to the lawyer's practice of law shall maintain such funds in a banking institution . . . in accordance with the provisions of 22 N.Y.C.R.R. Part 1300. . . . Such funds shall be maintained, . . . in a special account or accounts, separate from any business or personal accounts of the lawyer . . .” Rule 1.15(b)(1). Second, “A lawyer in possession of any funds or other property belonging to another person, where such possession is incident to his or her practice of law . . . must not . . . commingle such funds or property with his or her own.” Rule 1.15(a). See N.Y. State 1127 ¶ 3 (2017); N.Y. City 2014-3 (2014). As Comment [1] to Rule 1.15 provides, “All property that is...