Explain When an Attorney Must Use a Client Trust Account

question 28

Essay

Explain when an attorney must use a client trust account. What is the paralegal's role? Explain what the repercussions are to the attorney who fails to properly use a client trust account.

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Definitions:

Compensating Balance

A minimum bank account balance a borrower must maintain as part of a loan agreement.

Effective Annual Interest Rate

The real return on a savings account or any interest-bearing investment, taking into account the effect of compounding interest.

Interest Rate

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Short-term Investments

Assets intended to be converted into cash or sold within a year.