The Florida Bar

Ethics Opinion

Opinion 72-37

November 27, 1972
Advisory ethics opinions are not binding.
Although there is no ethical requirement that a lawyer divide trust funds in order to ensure
complete FDIC coverage, he is nevertheless expected to act prudently and consider the deposits’
size in relation to the size and reputation of the financial institutions concerned.

DR 9-102
Vice Chairman Zehmer stated the opinion of the committee:
A member of The Florida Bar states that his law firm maintains a general
firm account in a local bank for routine operating purposes and also maintains a
separate “trust account” in a different local bank in which funds belonging to
clients are deposited. The amounts deposited in this trust account vary from time
to time and often exceed several hundred thousand dollars. The inquiring lawyer
seeks advice concerning his firm’s legal liability in the event of a failure of the
bank as the trust account is insured by the Federal Deposit Insurance Corporation
only to the extent of the first $20,000. He also asks advice as to his ethical duty to
see that such funds are fully protected by FDIC insurance.

It is beyond the Committee’s jurisdiction to give advice on legal liability and we express
no opinion on this question.
Concerning the ethical question, the Committee finds no fault in the method of the firm’s
handling of its clients’ funds. It complies with DR 9-102 of the Code of Professional
Responsibility, which requires that clients’ funds be kept in one or more separate identifiable
bank accounts maintained in this state. A lawyer is not an insurer of clients’ funds in his
possession, and there is no ethical requirement that he keep such funds in numerous separate
accounts so as to assure complete FDIC insurance coverage of all funds. However, in handling
clients’ funds, the lawyer is acting as a fiduciary or trustee and is expected to act as a prudent
man. Obviously the size of the deposit should be prudent in relation to the size and reputation of
the financial institution where it is placed. If there is any reasonable doubt in the mind of the
lawyer as to the security of the deposits, it might then become prudent to divide the trust funds
and take advantage of FDIC insurance, having due regard to the requirements of DR 9-102.