The Trusted Adviser
May 2015 | Volume 8 · Number 4

Unclaimed Property, Unidentifiable Funds, and Revisions to Rule 1.15

Christine Sparks photo

Many attorneys are in a position where they have a trust account that has been open for a significant period of time; over .the years, there may be checks that do not clear and the funds remain in the account. When the attorney attempts to clean-up the escrow account, he or she may realize that the account contains funds where the owner of the funds is unknown, and the attorney may no longer have the documentation to determine who is entitled to the funds. For purposes of this article, these are referred to as "unidentifiable funds."

Last summer, based on consultation with the ARDC, ATG posted an article, Resolving Unclaimed Property in Illinois - What You Should Know about State Treasurer and ARDC Procedures, which provided you with information on resolving unclaimed property in Illinois escrow accounts. The article provides guidance regarding who falls under the purview of the Unclaimed Property Act and how funds could be remitted to the Illinois State Treasurer’s office (Treasurer) pursuant to a Voluntary Disclosure Agreement.

The Treasurer’s office indicated that it would accept funds even when it was unknown who was entitled to the money. Many attorneys have expressed concerns with how the process will work. Since we published the article, the Illinois Supreme Court amended (effective date July 1, 2015), Rule 1.15 of the Rules of Professional Conduct to provide a mechanism for attorneys to submit unidentifiable funds to the Lawyers Trust Fund of Illinois. See Unidentifiable Funds and Illinois Rule 1.15 for more information on the change to Rule 1.15.

Funds that can be identified should still be remitted to the Treasurer pursuant to the Unclaimed Property Act. The changes to Rule 1.15 apply to situations where attorneys are unable to identify the party that is entitled to funds.

ATG Member Agents: ATG is committed to ensuring that you comply with applicable law; by providing clear instruction and information, we believe we are offering the resources to do so. If you have any questions please Contact an Underwriter.

Christine Sparks
ATG Vice President and Managing Attorney, Claims and Audit

[Last update: 5-26-15]

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