When it comes to handling child custody cases, they can be incredibly challenging for all involved. Deciding which parent to place a child with or determining the amount of time a child will spend with both parents can be complicated matters. Often, these cases are stressful and so financial matters are not on the minds of all the parties involved. While making the right decision is most important, clients and attorneys alike must consider maintaining financial integrity. Adhering to attorney escrow account rules is necessary from avoiding conflicts of interest to preserving the client-attorney relationship.
In peoples’ minds, an attorney escrow account is something that sounds exclusive and not for anyone but lawyers. However, these accounts come into play whenever an attorney is handling any client matter. It is required that attorneys handle client payments and other funds properly and with care. Upon receiving any funds, attorneys may be required to place them in a separate bank account. This will hold the money for the benefit of that client only.
Specifically, clients with child custody cases have funds at their disposal. In most cases, parents do not want to pay their ex-spouses much money for a variety of reasons. Nevertheless, funds for guardianship, child support, and child’s healthcare must be properly handled. Indeed, there are many rules governing such funds that attorneys must be aware of when handling custody procedures for their clients.
How can withholding client funds result in severe consequences? As a lawyer, it is your responsibility to hold onto client funds until they are officially needed for the specified purpose. For example, parents in child custody procedures often have to hire forensic accountants, mental health professionals, and other experts to assist with their cases. If your client must pay for a family report, your escrow account can help streamline the process. Nevertheless, failing to protect funds for the intended use can lead to a breach of fiduciary duty.
Your plans for the funds must be fully transparent. For example, parents in a custody matter may wish to pay for their attorney’s fees out of their escrow funds, but may not want to use them for the purpose of an expert’s report to take place. Instead, parents may choose to use the escrow funds for a report. It will be your responsibility as attorney to draw on those funds for the report.
Ultimately, attorney escrow account rules can be complex, and may be misunderstood by clients and even lawyers who handle such funds infrequently. Nevertheless, they are truly vital to any case and handling client’s funds with care can help your law firm avoid serious trouble. Whether you are managing funds for child custody cases or other matters, handling matters with transparency is key.
For more information on fiduciary duties and financial management in legal practices, you can visit this Wikipedia page.