Safekeeping Property · 2-8% of the exam
20.2.1Safekeeping other property and records (Rule 1.15(a))
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- Rule 1.15(a) — Other property and records
Why
The fiduciary duty extends beyond cash. Securities, deeds, and other valuables can be lost, confused with the lawyer's property, or converted inadvertently unless they are labeled and physically separated. Records serve the same end after the fact. Without them, no one can reconstruct what the lawyer held or handed back once the file is closed and memories have faded.
Plain English
Any non-cash property received in a representation must be identified as the client's and kept physically separate from the lawyer's own belongings. Securities belong in a safe deposit box.
Records must be maintained from the termination of the representation, not from receipt; on the period, the Model Rule suggests five years, each state sets its own period, and Comment [1] tells the lawyer to comply with recordkeeping rules established by law or court order. Safeguarding is measured at the standard of a professional fiduciary, and securities take a different form of safekeeping where particular circumstances make that appropriate.
Rule
Rule 1.15(a) — Other property and records
Any property of a client or third person received in connection with a representation must be:
- Identified as belonging to that person: labeled, inventoried, and segregated from the lawyer's own property.
- Appropriately safeguarded at the standard of a professional fiduciary.
Comment [1] — Securities: Belong in a safe deposit box unless particular circumstances make a different form of safekeeping appropriate.
- Record-keeping
Full, current, and accurate books covering every dollar and item held for a client or third party must be maintained, and those books must be preserved for [five years] after the representation ends. The brackets are the ABA's own: the Model Rule suggests five years; each state sets its own period.
Comment [1] — Records generally: The lawyer should maintain books and records on a current basis in accordance with generally accepted accounting practice and comply with any recordkeeping rules established by law or court order — which is what the bracketed figure defers to.
Example 1
Ex. 1
Gina handles an estate administration. The executor delivers original stock certificates to Gina for safekeeping during probate. She places them in a desk drawer, unlabeled, alongside her own investment statements. Probate closes and the representation ends; two years later she shreds the estate's account records, and a year after that she mails the certificates to the new owner, who had been entitled to them since the estate closed.
Gina fails at receipt and again afterward. She did not identify or segregate the certificates at receipt, so they sat unlabeled among her own papers. Shredding the estate's records two years after termination falls short of the [five years] the Model Rule suggests. Her delivery is a separate problem: Rule 1.15(d) required prompt delivery once the new owner was entitled to the certificates, not three years later. Comment [1] speaks to Gina's setting directly — client and third-person property must be kept separate from the lawyer's own and, if monies, in one or more trust accounts, and separate trust accounts may be warranted when administering estate monies or acting in similar fiduciary capacities. Eventual delivery doesn't cure any of it. Open Gina's drawer on the day the certificates arrive, not on the day she mails them.
Trap
Tip
Questions · 1
Q 01ch20-e04
Question 1 of 1 · Rule 1.15(a)
Attorney represented Client in the sale of a small courier business. At closing the Buyer's agent handed Attorney the original title certificates for two delivery vans, together with a signed transfer form belonging to Client. Attorney put the certificates and the form in a plain folder in a drawer of her own desk, alongside her personal tax papers, and made no note of what the folder held. The documents stayed there untouched for eleven months. When Client finally asked for them, Attorney found the folder and handed everything back undamaged. Was Attorney's handling of the certificates and the transfer form proper?
Keys 1 to 4 choose.