[WSBAPT] Accessing Deceased Attorney's IOLTA

[Mark Anderson]

Practice tip: send your spouse to law school.

Mark B. Anderson
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Carmen Rowe
Sent: 09/15/2023 2:40 PM
To: wsbapt at lists.wsbarppt.com
Subject: Re: [WSBAPT] Accessing Deceased Attorney's IOLTA

To back up what Amy shared:

It was some years ago, but a case I had been involved with faced a similar dilemma. We had settled and I was waiting for the signed agreement with a rapidly approaching trial date, when a paralegal from a neighboring office called at 9 pm responding to my multiple messages. Her & her boss, who had a neighboring office, found out and were desperately going through boxes and trying to catch up with things and at least contact people involved in impending actions.

Problem with resolution, as for many of the cases, was that the clients' monies were in the IOLTA account - which kept both settlements from being executed as well as clients being able to transfer the monies to a new attorney as a deposit for their services, leaving clients with urgent time-sensitive matters in highly vulnerable predicaments.

In that case the attorney petitioned the court, who then appointed an attorney to handle the accounting, funds and distributions. So while my info is third-hand, the answer I understood about non-attorneys handling IOLTA funds was not just no, but he** no.  The court would not even allow for the wife, who was the office manager, to sign an assignment of the account over to the attorney willing to help handle things, as - technically  she had no rights to handle the monies, so any "permission" was void.

And, incidentally, the court and bar both had conveyed that the wife's name (or anyone else who was not an attorney) even being on the account was an ethical breach.

Important lesson for the rest of us. As with potential liability of the business to clients for any damages flowing from lack of a plan.

Carmen Rowe

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Date: Fri, 15 Sep 2023 17:58:43 +0000
From: "Lewis, Amy C." <ALewis at Eisenhowerlaw.com<mailto:ALewis at Eisenhowerlaw.com>>
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Accessing  Deceased Attorney's IOLTA
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One of my colleagues is currently handling a probate of a deceased attorney.  This attorney's practice area was immigration, and he had taken deposits/retainers from many clients.  We felt it was necessary to find another immigration attorney to assist with winding up the practice.  Here are my colleague's comments regarding our matter:

In response to the questions of whether or not a non-attorney PR can disburse funds from the IOLTA, the answer is no. The bank will not likely allow access to the IOLTA account. Even if the bank were to, I would be concerned with the PR having legal exposure, as a licensed attorney must access those funds.

The guidance that I have gotten from the WSBA (and from the court) on this issue is that a licensed attorney must "wind down" the law firm, which includes handling the IOLTA (settling the accounts, issuing refunds, etc.), as well as the operating (non-IOLTA account). What seems to be the preferred/agreed upon path in these types of situations is for the PR to retain an attorney, preferably someone with experience in the same practice area(s) as the firm, and that attorney is hired to wind down the firm. The attorney can retain non-attorney professionals to assist with things like accounting, but the actual disbursements and refunds and assessment of cases and fees earned should be handled by an attorney that the PR hires.

Some probate attorneys will do this as part of the representation of the PR in the estate, but our analysis was that there is too much risk in doing so and such work should be outsourced to a firm that has greater experience in the practice area.


Amy Lewis, Attorney
Pronouns she/her/hers
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