New Trust Account Overdraft Notice Rule takes effect Sept. 15

New Rule 1.15A of the Michigan Rules of Professional Conduct, also known as the Trust Account Overdraft Notice Rule (TAON), takes effect on September 15, 2010. To review Rule 1.15A in its entirety, visit MRPC 1.15A PDF. A brief summary of the requirements of the TAON Rule is provided below: * Before the effective date of the TAON Rule, financial institutions doing business in Michigan must submit a signed agreement to the State Bar of Michigan to obtain approval to maintain lawyer trust accounts as defined by MRPC 1.15(a). * Lawyers must confirm that their financial institutions are on the list of approved financial institutions posted on the State Bar's website. * No further action is required by lawyers for their preexisting IOLTA accounts; these accounts have already been identified as lawyer trust accounts by financial institutions when opened by lawyers. * After confirming that their financial institution is on the State Bar's list, lawyers must contact their financial institutions to change the name on their non-IOLTA accounts to include the term "trust" or "escrow" if not already included in the account name. * After confirming that their financial institution is on the State Bar's list, lawyers may download a form (Non-IOLTA Lawyer Trust Account Notice to Financial Institution) from the State Bar's website and submit the completed form to their approved financial institutions for each non-IOLTA trust account and must send a copy to the State Bar. * Lawyers must continue to safeguard client and third-party funds held in trust to avoid all overdrafts to their IOLTA and non-IOLTA accounts. * Approved financial institutions maintaining lawyer trust accounts must submit overdraft reports within five banking days of any overdrafts to the grievance administrator of the Attorney Grievance Commission. The State Bar is in the process of communicating with financial institutions to invite their participation in the TAON program. The State Bar expects to begin receiving signed TAON agreements from financial institutions in May and will begin posting its list of approved financial institutions at that time. The State Bar will update the list of approved financial institutions as signed TAON agreements are received from financial institutions. Lawyers should wait until the name of their financial institution appears on the State Bar's list of approved financial institutions before submitting a completed non-IOLTA notice form. Published: Thu, Jun 3, 2010

––––––––––––––––––––
 Subscribe to the Legal News!
 https://test.legalnews.com/Home/Subscription
Full access to public notices, articles, columns, archives, statistics, calendar and more
Day Pass Only $4.95!
One-County $80/year
Three-County & Full Pass also available