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§ 3-903. Interest-bearing trust accounts.

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   (A) Except as may be authorized hereinafter, interest earned on insured trust accounts (less any deduction for service charges, fees of the financial institution, and intangible taxes collected with respect to the deposited funds) shall belong to the clients whose funds have been so deposited, and the lawyer or law firm shall have no right or claim to such interest.

   (B) Unless an election not to do so is submitted in accordance with the procedure set forth in § 3‑903(C), a lawyer or law firm shall maintain an interest-bearing insured trust account for clients' funds which are nominal in amount or are expected to be held for a short time in compliance with the following provisions:

   (1) No earnings from such an account shall be made available to a lawyer or law firm.

   (2) The account shall include only clients' funds which are nominal in amount or to be held for a short period of time.

   (3) Funds in each interest-bearing account shall be subject to withdrawal upon demand, subject only to any notice period which the financial institution is required to reserve by law or regulation.

   (4) The rate of interest payable on any interest-bearing trust account shall be the same rate of interest paid by the financial institution for all other holders of similar accounts. Interest rates higher than those offered by the financial institution on regular or savings accounts may be obtained by a lawyer or a law firm on some or all of the deposited funds so long as there is no impairment of the right to withdraw or transfer principal immediately, subject only to any notice period which the financial institution is required to reserve by law or regulation.

   (5) Lawyers or law firms electing to deposit client funds in an interest-bearing trust account shall direct the financial institution:

   (a) To remit interest or dividends, as the case may be, at least quarterly to the Nebraska Lawyers Trust Account Foundation (hereinafter Foundation); and

   (b) To transmit with each remittance to the Foundation a statement showing the name of the lawyer or law firm, the trust account number, and the interest rate for whom the remittance is sent; and

   (c) To transmit to the depositing lawyer or law firm at the same time a report showing the amount paid to the Foundation.

   (6) The interest or dividends received by the Foundation shall be used by the Foundation solely for the support of the Legal Aid of Nebraska program. Such income shall be applied only to activities permitted to be conducted by organizations exempt from taxation under § 501(c)(3) of the Internal Revenue Code of 1986, as from time to time amended.

   (7) This rule may be subsequently amended to effectuate its purposes or to comply with any amendments to the Internal Revenue Code or new interpretations by the Internal Revenue Service or the courts.

   (C). A lawyer or law firm that elects to decline to maintain accounts described in § 3-903(B)(5) shall submit a Notice of Declination in writing to the Chief Justice of the Supreme Court or his or her designee by February 15 of the year to which the Notice of Declination will apply.

   (1) Notwithstanding the foregoing, any lawyer or law firm may petition the Court at any time and, for good cause shown, may be granted leave to file a Notice of Declination at a time other than those specified above. An election to decline participation may be revoked at any time by filing a request for enrollment in the program.

   (2) A lawyer or law firm that does not file with the Chief Justice of the Supreme Court a Notice of Declination in accordance with the provisions of this rule shall be required to maintain an account in accordance with § 3-903(B)(5).

   (3) The Board of Directors of the Nebraska Lawyers Trust Account Foundation may take all action necessary at any time to exempt a lawyer, law firm, or trust account otherwise participating in the program where in the Board's judgment such participation would be administratively or economically unreasonable, burdensome, or counterproductive to the purposes of the program.

Rule 3(B)(5)(b) and (6) amended November 15, 2007. Renumbered and codified as § 3-903, effective July 18, 2008.

This page was last modified on Thursday, October 4, 2012