My lawyer just settled my Tennessee personal injury case. I signed the check and the other papers. Now my lawyer says I can’t have the money for ten days because he has to hold the check in his trust account until it clears. That can’t be right. Is he just skimming the interest off my money?
No. Your lawyer is doing exactly what he is required to do. Lawyers must maintain a separate bank account known as a trust account. It is for client funds – and only for client funds. When a check is deposited into that account, the lawyer cannot write a check out of that account until the deposited check clears the bank. For out-of-state banks, that can take ten business days. Sometimes the check can clear more quickly, but ten business days is a standard time.
Your lawyer is not making interest on the money. The interest that is earned is taken by the bank and given to the Tennessee Bar Foundation which in turn donates the money to advance justice. Thus, your lawyer has no financial reason to hold your money one second longer than he must to meet the ethical obligations involved in administering a trust account.
Are you a personal injury lawyer who came across this post? John Day writes a blog for personal injury and wrongful death lawyers called "Day on Torts." John handles personal injury and wrongful death cases of all types across Tennessee and can be contacted either here or by the "Ask a Question" form to the immediate right of this post.