In 2008, the Florida Supreme Court said lawyers could have their trust accounts garnished if they owe debts. This means the lawyer’s bank account could be used to pay off their debts. The law requires the lawyer to give a full report of the money in their trust account and to hold onto it to pay off the debts. If the lawyer doesn’t follow the law, they could get in trouble. In simple terms, a lawyer who owes money to someone and gets a notice to hold the money for them has to tell the court and the person who wants the money if they have the money or any other property that belongs to the person who is owed. If they don’t do this on time, they can get in trouble and have to pay the money to the person who wants it. In a specific case, the lawyer didn’t stop a payment for a check in time and had to pay the money to the person who wanted it. There were other things the lawyer could have done to avoid this situation. When Arnold Matheny quickly answered the garnishment papers, he had to tell everything he knew about the situation. This helped Dixie National Bank because they didn’t have to keep reporting their money and assets after the answer was filed. So, it’s good for the bank to respond fast and tell everything they know. A lawyer broke the rules by taking money from a client’s account that was supposed to be kept separate. The lawyer also didn’t follow the rules when the client’s money was taken by someone else. The lawyer should have held onto the money until a court decided what to do with it. The lawyer also didn’t tell the court and the client’s creditors about the money. Other lawyers in the law firm have to report when something like this happens. The lawyer can only have a legal right to a portion of the settlement money for their fees. They can’t have any other ownership of the money. Also, they can’t mix their own money with the settlement money in their account. If a lawyer’s trust account is garnished by a judgment creditor of their client, the lawyer should quickly figure out how much money is in the account for the client, stop any checks for that amount, and keep any property they have (like settlement checks). They should also tell the court all the info about the account and property within 20 days. If the lawyer is owed money by the client, they should ask the court to decide who gets paid first. The lawyer shouldn’t cash any settlement checks they have, and they shouldn’t use the client’s money that is in dispute without permission from the court. If a lawyer thinks they’ll get money from a settlement, they shouldn’t put that money in their trust account or take the check, because then it could get taken in a garnishment. The lawyer should also think about getting an official claim for the money. Because breaking the rules for trust funds can get a lawyer in big trouble, they should follow all the laws and rules carefully. Lawyers have to keep their clients’ money separate from their own. When a check is written, the money still belongs to the person who wrote the check until it’s cashed. If someone else claims they should get the money instead, a jury can decide who gets it. When a court orders a garnishment, the party who requested it has to pay $100 to the bank or employer holding the money. The bank can use this money to pay for their legal fees. After the court makes a final decision, the bank can ask the court to make the party who owed the money pay for the bank’s legal costs. If the bank’s legal costs are more than the $100 that was paid, the party who owed the money has to pay the difference. If the bank resisted the garnishment in order to use the money to pay off a debt owed to them, they may not be entitled to have their legal costs covered. A lawyer needs to be careful when trying to stop money from being taken from a trust account. If the settlement check was paid with a check from a different lawyer’s trust account, our lawyer could have accepted that check and given out new checks before the money was put into our trust account, as long as we believed the money would be good. Also, if we have done work for someone and they owe us money, we can put a lien on any money they get from a settlement, but only for the fees and costs related to the work we did for them. And we have to have a contract with them about paying us and let them know about the lien. In legal cases, there are rules about who gets paid first if there are different people who are owed money. In Michigan, a garnishment lien gets paid before a charging lien, but in Florida, a charging lien can go first.
In Florida, if a lawyer messes with their client’s money, it’s a really serious problem. They could get in big trouble, like getting kicked out of being a lawyer. Also, a lawyer can’t keep their client’s stuff as payment unless they already got the money from the case.
It’s also not okay for a lawyer to use money that they’re holding for someone else, if there’s a question about who it belongs to. That’s called stealing, and it’s against the rules for lawyers. The lawyer has to keep the client’s money separate from theirs, and if there’s a dispute over the money, they have to hold onto it until the dispute is resolved. They also have to let the client know when they receive the money and give it to the client when they ask for it. Lawyers cannot own a part of the case they are working on for a client, except for getting a lien to secure their fee or getting a reasonable contingency fee. They also have to keep their clients’ money separate from their own and follow rules about being honest and fair in their work. Thomas O. Wells is a lawyer and certified public accountant in Coral Gables, Florida. He specializes in tax, estate, and wealth preservation law. He has received recognition for his work in the industry. The article was researched with the help of Diane Wells. It is submitted on behalf of a legal section in Florida.
Source: https://www.floridabar.org/the-florida-bar-journal/garnishing-a-lawyers-trust-account-actions-to-be-taken-by-lawyer-garnishee/
Leave a Reply