Multistate Professional Responsibility Exam Practice Question
An attorney represented a client in a claim and received settlement proceeds in trust. A healthcare provider states there is an outstanding balance and claims a portion of the remaining funds. The client requests a release of the remaining amount to cover personal needs. The provider insists that the disputed sum belongs to its facility. Which approach best meets professional responsibilities regarding these funds?
Place that portion in the lawyer’s operating account to keep it separate from the client
Distribute the relevant funds to the client and hold the portion in question in a trust account
Pay the provider the outstanding balance and forward the remainder to the client
Offer the proceeds to the client and have the provider negotiate directly with the client
The correct solution is that the lawyer must keep the portion that multiple parties claim in a trust account until the parties come to an agreement while disbursing the rest to the rightful client. This approach follows the rules on safekeeping of property and ensures that the potential interest of the healthcare provider is protected. Moving that portion into a personal or operating account would not safeguard the provider’s claim. Likewise, releasing that portion to the client could violate professional obligations when more than one party is claiming the same funds.
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What is a trust account, and why is it required in this scenario?
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Multistate Professional Responsibility Exam
Safekeeping funds and other property
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