There are several sources of law governing how attorneys must name their trust accounts that are used for closing real estate transactions. In addition, ATG has its own recommendation for how to name ATG agents' real estate closing accounts. For traditional ATG agents, or those with approved member closers, ATG recommends the following language:

Attorneys' Title Guaranty Fund, Inc.
Agency Escrow Disbursement Account
John Doe, Title Insurance Agent

It is ATG's opinion that this language will satisfy the requirements of other rules governing lawyers' trust accounts for closing real estate transactions. A discussion of those rules follows.

1. Rule 1.15

Rule 1.15, in comment [1], states that 'client trust account' or 'client funds account' or words of similar import be used to indicate the fiduciary nature of any trust account used to hold client funds. ATG's language, "agency escrow" account, indicates a fiduciary account, without any additional language required. For more on Rule 1.15, see The Impact of Amendments to IRPC Rule 1.15: A Lawyer's Obligation to Manage and Protect Client Funds.

2. Federal Deposit Insurance Corporation (FDIC)

Funds held in a fiduciary account on behalf of each person or entity will be insured by the FDIC up to its limit, for each person or entity with funds held in the account. If that person or entity has funds held in other accounts in the same bank, then the FDIC limit will aggregate all amounts held at the bank on behalf of that person or entity. In this way, the FDIC provides valuable protection from bank failure for the parties whose money is held in a trust account, and the fiduciary account is not limited to the usual FDIC account limit.

To obtain this valuable protection, three requirements must be met, as follows: (1) the funds must be held in a financial institution insured by the FDIC, (2) the account must be disclosed in the bank's deposit account records as a fiduciary account, that is, the account must be named in such a way as to identify the fiduciary nature of the account, and (3) the name and ownership interest of each party with funds in the fiduciary account must be determinable by a review of either the bank's account records or the agent's account records. See, 12 CFR §330.5.

Because both Rule 1.15 and the Illinois Title Insurance Act require detailed recordkeeping, the agent's own records should provide sufficient documentation to meet requirement number three, above.
It is ATG's opinion that the language "agency escrow" account indicates a fiduciary account, without any additional language required to satisfy the FDIC.

3. Illinois Title Insurance Act

The Illinois Title Insurance Act does not prescribe the name of a title agent's escrow account. However, the act does make requirements that impact the name of the account. The act requires the following: (1) that the account be held at an FDIC-insured institution, (2) that the escrow agent maintain separate records of all receipts and disbursements of escrow, settlement, or closing funds, and (3) that the funds not be subject to any debts of the escrowee. 215 ILCS 155/16(3). The only way to be certain that the funds in the escrow account are not subject to any debts of the escrowee, and that the FDIC will insure the parties to the account, is to have an account with a name that indicates the fiduciary nature of the account. It is ATG's opinion that the ATG-approved naming convention for escrow accounts satisfies this requirement of the Illinois Title Insurance Act.

Further, Section 26 of the Illinois Title Insurance Act sets forth the requirements for good funds at closing. There, a check drawn on the fiduciary trust account of a title insurance company or title insurance agent is good funds. As a practical matter, other title insurance agents will only accept a check as good funds if the check is written off an account with a name that indicates a title insurance agent escrow account. ATG's naming convention indicates a title insurance agent escrow account and will provide the evidence needed for other title companies to take your check as good funds.

4. Lender Requirements

Please be aware that it is standard practice for lenders to require that the funds for a closing be wired to an account that bears the same name as the title agent who is closing the transaction. Without parallel naming in place, the lender may refuse to fund a closing.

Working backward, that means that the name on your escrow account should match that on your commitments and closing protection letters (CPLs). ATG has programmed REsource and the CPL program to issue commitments, policies and CPLs under only the names that the State of Illinois records indicate as registered title insurance agents. Therefore, when naming your escrow account you should be sure to use the exact name that you used to register with the state as a title insurance agent. You can confirm what your name is directly on the state's website: www.idfpr.com/dfi/titleinsur/TISearch.asp