Multistate Professional Responsibility Exam Practice Question
An attorney starts a new practice and plans to hold advance payments from clients for upcoming services. The attorney wonders how to maintain these payments. Which approach is best?
Open a dedicated trust account, separate from any personal and business funds, and record each client’s payments in detailed ledgers
Maintain the advance payments in a personal account and track deposits with a separate ledger
Place the advance payments in a business account or trust account
Place the client payments in the lawyer’s general business account, keeping track of amounts through individual entries
The approach that sets up a dedicated account, separate from personal and business funds, satisfies professional requirements because it prevents commingling client resources with the lawyer’s own. A personal or operating account both create risks, including inadvertent use of client funds. Proper recordkeeping in a dedicated account ensures clear identification of each client’s share and aligns with the duty to safeguard property.
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Why is it important to have a dedicated trust account for client payments?
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What constitutes proper recordkeeping in a trust account?