What is the name of the bank account used to hold money belonging to the client or a third party?

What is the name of the bank account used to hold money belonging to the client or a third party?

• A. Disbarment
• B. Client trust account
• C. Suspension
• D. Negligence

Answer: (B)

A client trust account is the dedicated bank account used to hold money that belongs to the client or a third party. This account is kept separate from the attorney’s own funds to maintain fiduciary responsibility and prevent commingling of funds. Funds such as advance fees, settlement proceeds, and costs are deposited here and disbursed only as authorized, with careful record-keeping and monthly reconciliations. In many jurisdictions, small client funds may earn interest that goes to IOLTA (the Interest on Lawyers’ Trust Accounts program) to fund legal aid. The other terms listed aren’t bank accounts; they refer to disciplinary actions or a concept related to professional liability, not where client money is held.

A client trust account is the dedicated bank account used to hold money that belongs to the client or a third party. This account is kept separate from the attorney’s own funds to maintain fiduciary responsibility and prevent commingling of funds. Funds such as advance fees, settlement proceeds, and costs are deposited here and disbursed only as authorized, with careful record-keeping and monthly reconciliations. In many jurisdictions, small client funds may earn interest that goes to IOLTA (the Interest on Lawyers’ Trust Accounts program) to fund legal aid. The other terms listed aren’t bank accounts; they refer to disciplinary actions or a concept related to professional liability, not where client money is held.