A new law took effect April 12, 2021 that creates a new category of unclaimed funds called Attorney Unclaimed Funds in the Ohio Department of Commerce Division of Unclaimed Funds.
These Attorney Unclaimed Funds are:
- unclaimed IOLTA funds held pursuant to 4705.09 ORC,
- unclaimed IOTA funds held pursuant to 3953.231 ORC, and
- unclaimed residual settlement funds, whether for named or unnamed plaintiffs, pursuant to 169.01(L) ORC.
With this new law, the Ohio Access to Justice Foundation is authorized to utilize attorney unclaimed funds to support civil legal aid and access to justice initiatives in Ohio. While the requirement that unclaimed funds held by attorneys be turned over to the Division of Unclaimed Funds is not new, the designation of the funds as attorney unclaimed funds to be utilized by the Ohio Access to Justice Foundation is new and a positive step to help address unmeet legal needs.
Attorney Unclaimed Funds must be reported by attorneys, title agents, courts, settlement administrators, and county auditors who may be holding residual settlement funds. These reports are required to be made to the Division of Unclaimed Funds using the Property Code: TR88. This is a unique property code for attorney unclaimed funds created for this reporting by the Division of Unclaimed Funds.
Remember, as in the past, all businesses that operate in the State of Ohio or hold funds due to Ohio residents are required to file an Annual Report of Unclaimed Funds. Even if there are no unclaimed funds to report, a “None” or Negative Report OUF-1 Unclaimed Funds Reporting Form must be filed. See pages 14-16. The new law does not affect this.
By definition, unclaimed funds include all moneys, right to moneys, or intangible property which remains unclaimed by its owner(s) for a specific period of time. IOLTA and IOTA funds may become reportable unclaimed funds subject to remittance to the Division of Unclaimed Funds. The Annual Report of Unclaimed Funds includes forms and instructions, with a detailed list of accounts that are required to report unclaimed funds and associated dormancy periods.
Ohio Administrative Code 1301:10-1-01(P) defines when funds become dormant and eligible for reporting to the Division of Unclaimed Funds. Per 169.11 ORC, an attorney may remit unclaimed funds prior to the expiration of the three-year dormancy period if the attorney has reason to believe funds held will be reportable in the future as unclaimed funds and satisfy the requirements of 169.03 ORC.
There is no minimum reportable dollar amount for attorney unclaimed fund accounts. Further, Opinion 2008-3 of the Ohio Board of Professional Conduct provides that an attorney’s reporting of unclaimed funds of a client whose identity or whereabouts are unknown does not violate either the ethical duty of safekeeping a client’s funds under Rule 1.15 or the ethical duty to protect a client’s confidentiality under Rule 1.6.
If a client comes forward after funds are turned over to the Division of Unclaimed funds, the owners of attorney unclaimed funds have a right to recover the funds with interest from the State of Ohio in perpetuity. The Division of Unclaimed funds oversees this process and determines whether a claim is paid.
If you have questions about attorney unclaimed funds, you may contact: Tammy Ringhiser, Services Manager at Ohio Access to Justice Foundation at firstname.lastname@example.org or Bill Nicholopoulos, Account Examiner Supervisor at the Division of Unclaimed Funds at email@example.com.
As always, I am happy to further discuss this or any loss prevention topic. All of us at OBLIC are here to help!
Gretchen Mote, Esq.
Director of Loss Prevention