What is the requirement regarding client funds and trust accounts?

The requirement regarding client funds and trust accounts is that client funds must be kept in a separate trust account. This principle is fundamental in the practice of law to ensure that client funds are protected and accounted for. Maintaining a separate trust account ensures that client money is not commingled with the lawyer's or law firm's personal or operating funds. This separation is crucial as it helps uphold the ethical obligations attorneys have to their clients, fostering trust and avoiding potential mismanagement or malpractice claims.

When clients deposit funds with their attorney, those funds are often held for specific purposes, such as settling legal fees or paying third-party expenses. To manage these funds responsibly, attorneys are required to use dedicated trust accounts, which are typically governed by strict regulations that dictate how such funds must be handled, reported, and safeguarded. This system ensures transparency and accountability in the way client funds are managed.

The other options suggest practices that violate these ethical guidelines, such as mixing personal and client funds, holding client money in a personal account, or using trust accounts for business expenses; none of which align with the standardized requirements for proper management of client funds.