MRPC Rule 1.15

(a) Definitions.

(1) “Allowable reasonable fees” for IOLTA accounts are per check charges, per deposit

charges, a fee in lieu of a minimum balance, federal deposit insurance fees, sweep fees,

and a reasonable IOLTA account administrative or maintenance fee. All other fees are

the responsibility of, and may be charged to, the lawyer maintaining the IOLTA

account. Fees or charges in excess of the interest or dividends earned on the account for

Michigan Rules of Professional Conduct 39 Updated with MSC order(s)

any month or quarter shall not be taken from interest or dividends earned on other

IOLTA accounts or from the principal of the account.

(2) An “eligible institution ” for IOLTA accounts is a bank, credit union, or savings and

loan association authorized by federal or state law to do business in Michigan, the

deposits of which are insured by an agency of the federal government, or is an open-end

investment company registered with the Securities and Exchange Commission

authorized by federal or state law to do business in Michigan. The eligible institution

must pay no less on an IOLTA account than the highest interest rate or dividend

generally available from the institution to its non-IOLTA customers when the IOLTA

account meets the same minimum balance or other eligibility qualifications. Interest or

dividends and fees shall be calculated in accordance with the eligible institution’s

standard practice, but institutions may elect to pay a higher interest or dividend rate and

may elect to waive any fees on IOLTA accounts.

(3) “IOLTA account” refers to an interest- or dividend-bearing account, as defined by the

Michigan State Bar Foundation, at an eligible institution from which funds may be

withdrawn upon request as soon as permitted by law. An IOLTA account shall include

only client or third person funds that cannot earn income for the client or third person in

excess of the costs incurred to secure such income while the funds are held.

(4) “Non-IOLTA account ” refers to an interest- or dividend- bearing account from which

funds may be withdrawn upon request as soon as permitted by law in banks, savings

and loan associations, and credit unions authorized by federal or state law to do

business in Michigan, the deposits of which are insured by an agency of the federal

government. Such an account shall be established as:

(A) a separate client trust account for the particular client or matter on which the

net interest or dividend will be paid to the client or third person, or

(B) a pooled client trust account with subaccounting by the bank or savings and

loan association or by the lawyer, which will provide for computation of net

interest or dividend earned by each client or third person’s funds and the

payment thereof to the client or third person.

(5) “Lawyer” includes a law firm or other organization with which a lawyer is

professionally associated.

(b) A lawyer shall:

(1) promptly notify the client or third person when funds or property in which a client or

third person has an interest is received;

(2) preserve complete records of such account funds and other property for a period of five

years after termination of the representation; and

(3) promptly pay or deliver any funds or other property that the client or third person is

entitled to receive, except as stated in this rule or otherwise permitted by law or by

agreement with the client or third person, and, upon request by the client or third

person, promptly render a full accounting regarding such property.

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(c) When two or more persons (one of whom may be the lawyer) claim interest in the property,

it shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall

promptly distribute all portions of the property as to which the interests are not in dispute.

(d) A lawyer shall hold property of clients or third persons in connection with a representation

separate from the lawyer’s own property. All client or third person funds shall be deposited

in an IOLTA or non- IOLTA account. Other property shall be identified as such and

appropriately safeguarded.

(e) In determining whether client or third person funds should be deposited in an IOLTA

account or a non-IOLTA account, a lawyer shall consider the following factors:

(1) the amount of interest or dividends the funds would earn during the period that they are

expected to be deposited in light of (a) the amount of the funds to be deposited; (b) the

expected duration of the deposit, including the likelihood of delay in the matter for

which the funds are held; and (c) the rates of interest or yield at financial institutions

where the funds are to be deposited;

(2) the cost of establishing and administering non-IOLTA accounts for the client or third

person’s benefit, including service charges or fees, the lawyer’s services, preparation of

tax reports, or other associated costs;

(3) the capability of financial institutions or lawyers to calculate and pay income to

individual clients or third persons; and

(4) any other circumstances that affect the ability of the funds to earn a net return for the

client or third person.

(f) A lawyer may deposit the lawyer’s own funds in a client trust account only in an amount

reasonably necessary to pay financial institution service charges or fees or to obtain a waiver

of service charges or fees.

(g) Legal fees and expenses that have been paid in advance shall be deposited in a client trust

account and may be withdrawn only as fees are earned or expenses incurred.

(h) No interest or dividends from the client trust account shall be available to the lawyer.

(i) The lawyer shall direct the eligible institution to:

(1) remit the interest and dividends from an IOLTA account, less allowable reasonable fees,

if any, to the Michigan State Bar Foundation at least quarterly;

(2) transmit with each remittance a report that shall identify each lawyer for whom the

remittance is sent, the amount of remittance attributable to each IOLTA account, the

rate and type of interest or dividends applied, the amount of interest or dividends

earned, the amount and type of fees deducted, if any, and the average account balance

for the period in which the report is made; and

(3) transmit to the depositing lawyer a report in accordance with normal procedures for

reporting to its depositors.

(j) A lawyer’s good-faith decision regarding the deposit or holding of such funds in an IOLTA

account is not reviewable by a disciplinary body. A lawyer shall review the IOLTA account

at reasonable intervals to determine whether changed circumstances require the funds to be

deposited prospectively in a non-IOLTA account.

A lawyer should hold property of others with the care required of a professional fiduciary.

Securities should be kept in a safe deposit box, except when some other form of safekeeping is

warranted by special circumstances. All property which is the property of a client or a third

person should be kept separate from the lawyer’s business and personal property and, if funds,

should be kept in one or more trust accounts. Separate trust accounts may be warranted when

administering estate funds or acting in similar fiduciary capacities.

Lawyers often receive from third persons funds from which the lawyer’s fee will be paid. If

there is risk that the client may divert the funds without paying the fee, the lawyer is not required

to remit the portion from which the fee is to be paid. However, a lawyer may not hold funds to

coerce a client into accepting the lawyer’s contention. The disputed portion of the funds should

be kept in trust and the lawyer should suggest means for prompt resolution of the dispute, such as

arbitration. The undisputed portion of the funds shall be promptly distributed.

A third person, such as a client’s creditors, may have a just claim against funds or other property

in a lawyer’s custody. A lawyer may have a duty under applicable law to protect such a third-party claim against wrongful interference by the client, and accordingly may refuse to surrender

the property to the client. However, a lawyer should not unilaterally assume to arbitrate a

dispute between the client and the third person.

The obligations of a lawyer under this rule are independent of those arising from activity other

than rendering legal services. For example, a lawyer who serves as an escrow agent is governed

by the applicable law relating to fiduciaries even though the lawyer does not render legal

services in the transaction.