Unclaimed Client Funds Appropriated to OSB for Legal Services to the Poor

Mystery Money: The Ethics of Unclaimed Lawyer Trust Account Funds

Prior to 2010, abandoned client funds in a lawyer's trust account were turned over to the Department of State Lands (DSL). But amendments to the Uniform Disposition of Unclaimed Property Act (ORS 98.302 to 98.436) enacted by the 2009 Legislature changed how this money is appropriated and disbursed.

Effective January 1, 2010, unclaimed funds held in lawyer trust accounts must be reported to the DSL, but paid over to the Oregon State Bar with a copy of the DSL reports. The reporting forms can be found on the DSL website at http://www.oregon.gov/DSL/Money/Pages/OLTA.aspx. Forms 1a and 2a must be completed and sent to the DSL with copies of the reports and the unclaimed funds forwarded to the OSB.

Pursuant to ORS 98.332, funds held by a fiduciary (including a lawyer) are deemed abandoned if the owner has not accepted payment of the funds, corresponded in writing about the funds or otherwise indicated interest in the funds within two years after the funds are payable or distributable to the owner. Funds deemed abandoned as of June 30 of each year are to be reported to the DSL during the month of October of that same year. Keep in mind if the owner's last known address is in a different state those funds must be reported and sent to that state.

After funds are deemed abandoned, but before reporting to DSL or paying over funds to the OSB, lawyers must exercise due diligence to ascertain the whereabouts of the owner of the funds and to communicate with the owner. Lawyers must retain records of the name and last-known address of the owner of the funds as well as any other evidence which would assist in the identification of the owner for three years after the funds have been remitted.

The money paid to the bar under the act will be appropriated to the Legal Services program, which funds legal aid organizations that provide civil legal services to the poor statewide. Questions about forwarding abandoned funds can be addressed to Jerri Shay at (503) 431-6334 or jshay@osbar.org.

See OSB Formal Ethics Op No 2005-48.