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News for your Practice
Trust Account Overdraft Notice Rule (TAON) takes effect on September 15, 2010
New Michigan Rule of Professional Conduct 1.15A, also known as the Trust Account Overdraft Notice Rule (TAON) takes effect on September 15, 2010. Michigan lawyers need to know about the serious consequences of a trust account overdraft - financial institutions will be required to report overdrafts to the Attorney Grievance Commission. A brief summary of the requirements of the TAON Rule is provided below:
Financial institutions doing business in Michigan must submit a signed agreement to the State Bar of Michigan to obtain approval to maintain lawyer trust accounts as defined by MRPC 1.15(a).
Lawyers must confirm that their financial institutions are on the list of approved financial institutions posted on the State Bar’s website at http://www.michbar.org/opinions/TAON_list.pdf.
No further action is required by lawyers for their preexisting IOLTA accounts; these accounts have already been identified as lawyer trust accounts by financial institutions when opened by lawyers.
Lawyers must contact their financial institutions to change the name on their non-IOLTA accounts to include the term “trust” or “escrow,” if not already included in the account name.
Lawyers may download a form from the State Bar’s website at http://www.michbar.org/opinions/TA_notice_fillable.pdf and submit the completed form to their approved financial institutions for each non-IOLTA trust account and provide a copy to the State Bar.
Lawyers must continue to safeguard client and third party funds held in trust to avoid all overdrafts to their IOLTA and non-IOLTA accounts.
Approved financial institutions maintaining lawyer trust accounts must submit overdraft reports within five banking days of any overdrafts to the Grievance Administrator of the Attorney Grievance Commission.
Forms and additional information are available on the State Bar’s website at http://www.michbar.org/opinions/TAON.cfm