Lawyers Mutual Insurance of Kentucky
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    • …And Here’s the Top Ten! Ethics and Malpractice Avoidance Guide
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    • It’s Time for Your Annual Check-up!
    • Oyez! Oyez! An Overview of the New Kentucky Rules of Appellate Procedure
    • Planning for the Inevitable Protecting Your Law Firm In A Crisis
    • The Lawyer-Client Relationship Continuum: Determining Duties Owed After Casual Conversations
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We fight for the fighters.

How Safe is the Bank that Holds Your Client Trust Account?
Download 2008_newsletter_summer.pdf

The Risk Manager, Summer 2008

The current turmoil in the banking industry with predictions of numerous bank failures, especially among smaller regional banks, means it is now appropriate to review your client trust account banking arrangements. In Client Trust Account Principles & Management for Kentucky Lawyers we provided the following information on insured bank accounts:

Kentucky Rule of Professional Conduct 1.15 does not require that client trust accounts be insured, but good risk management does. Accounts should be opened only in banks that are covered by the Federal Deposit Insurance Corporation (FDIC) that provides insurance up to $100,000 for each account. If the funds in a trust account exceed the $100,000 FDIC coverage, be sure the bank has adequate other insurance. Confirm this in writing. In some cases it may be necessary for the lawyer to purchase firm insurance for the account or to open additional accounts in other banks to adequately protect client funds. It is always good practice to get client instructions on how large amounts are to be deposited and with what security.

You must follow the FDIC disclosure rules to acquire $100,000 FDIC insurance for the funds of each client held in a pooled client trust account. In addition, make sure that a client does not have an account in the same bank as your trust account that combined with the client’s funds in the trust account exceeds $100,000. Go to http://www.fdic.govand search for fiduciary accounts or lawyer fiduciary accounts for guidance on how to comply with FDIC rules.

 

Lawyers Mutual of Kentucky

10503 Timberwood Cir., Ste. 213
Louisville, Kentucky 40223

Phone: 502-568-6100
Fax: 502-568-6103

Who We Are
About Us
Staff
Board of Directors

What We Do
Risk Mitigation
Professional Liability Policy
Court Bonds
FAQs

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Application
New Bar Admit

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Forms
Bar Complaint
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Make a Payment
Add an Attorney
Remove an Attorney
Firm Name Change
Firm Address Change

Resources
Subjects A-Z
Schedule an Ethics CLE
Practice Management

Lawyers Mutual of Kentucky

10503 Timberwood Cir., Ste. 213
Louisville, Kentucky 40223

Phone: 502-568-6100
Fax: 502-568-6103

Who We Are
About Us
Staff
Board of Directors

What We Do
Risk Mitigation
Professional Liability Policy
Court Bonds
FAQs

Applications
Quick Quote
Application
New Bar Admit

Applications
Quick Quote
Application
New Bar Admit

Forms
Bar Complaint
Claims Reporting
Make a Payment
Add an Attorney
Remove an Attorney
Firm Name Change
Firm Address Change

Resources
Subjects A-Z
Schedule an Ethics CLE
Practice Management

Social
Facebook
LinkedIn
Instagram
Twitter

Social
Facebook
LinkedIn
Instagram
Twitter

Disclaimer: The contents of this Web site are intended for general information purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. It is not the intent of this Web site to establish an attorney’s standard of due care for a particular situation. Rather, it is our intent to advise our policyholders to act in a manner which may be well above the standard of due care in order to avoid claims having merit, as well as those without merit. In the event any statement on the Web site differs from a statement in an issued policy the policy will control.

  • Who We Are
    • About Us
    • Staff
    • Board of Directors
  • What We Do
    • Risk Mitigation
    • Professional Liability Policy
    • Court Bonds
    • FAQs
  • Applications
    • Quick Quote
    • Application
    • New Bar Admit
    • Apply by Postal Mail
  • Forms
    • Claims Reporting
    • Policy Changes
      • Adding an Attorney
      • Remove an Attorney
      • Firm Name Change
      • Firm Address Change
    • Make a Payment
    • Future Contact Request
    • Reporting a Bar Complaint
  • Media
    • Newsletter Archive
    • COVID-19
    • Disaster Response Information
  • Resources
    • Site Search
    • Subjects A–Z
    • Subjects by Year
    • Schedule an Ethics CLE
    • OnDemand CLE Courses
    • Practice Management
    • Financial Statements
  • Contact