May 14, 2025 – Several years ago, we ran an Ethical Dilemmas column regarding a lawyer’s obligations when they cannot locate the owner of funds being held in their trust account.

Because we regularly get calls to the State Bar of Wisconsin Ethics Hotline relating to this topic, we are offering this updated article.

A Dilemma

Funds being held in a lawyer’s trust account are normally funds belonging to clients and third parties.^[1] Sometimes, a lawyer or law firm cannot locate or identify the owner of those funds.

So, what is a lawyer to do in such a situation?^[2]

Lawyers who contact the hotline sometimes ask if they can donate to charity or take possession of such funds, because they cannot find guidance in SCR 20:1.15 (the trust account rule). The answer is no: Lawyers or law firms may never donate or take possession of such funds.

But there is a solution.

The Solution Comes from State Statutes

While the disciplinary rules offer no direct answer to that question, there is guidance in state statutes.

The Unclaimed Property Office in the Wisconsin Department of Revenue and the Office of Lawyer Regulation (OLR) consider unclaimed or abandoned funds in a lawyer trust account to be unclaimed property, as described in Wis Stat. section 177.02(1):

Except as otherwise provided in this chapter, all intangible property, including any income or increment derived from it, less any lawful charges, that is held, issued or owing in the ordinary course of a holder's business and that has remained unclaimed by the owner for more than 5 years after it became payable or distributable is presumed abandoned.

Therefore, funds abandoned or unclaimed in a trust account will normally go to the Department of Revenue.

The OLR provides helpful guidance on their websiteregarding the circumstances in which the Unclaimed Property Office will take possession of such funds. These include when:

• the lawyer’s or law firm’s records reflect that the last-known address for the apparent owner is in Wisconsin;

• the lawyer’s or law firm’s records do not reflect the identity of the person entitled to the property, and it is established that the last-known address of the person entitled to the property is in this state;

• the lawyer’s or law firm’s records do not reflect the last-known address of the apparent owner; and it is established that the last-known address of the person entitled to the property is in Wisconsin; or

• the transaction out of which the property arose occurred in this state, and the last-known address of the apparent owner or other person entitled to the property is either unknown or in a state that does not provide for escheatment of unclaimed property.

Note that in addition to accepting funds belonging to clients a lawyer cannot find, the Unclaimed Property Office will also accept funds whose owner is unidentifiable.

Reasonable Efforts Required

Before contacting the Unclaimed Property Office, the lawyer should make reasonable efforts to locate the owner of the funds.

The Department of Revenue provides a guide to the unclaimed property process that includes a sample due diligence letter.

It should also be noted that the OLR takes the position that a lawyer generally may not charge for attempts to locate the owner, because delivering funds held in trust to the owner of such funds is a professional obligation of the lawyer – see SCR 20:1.15(e).

Endnotes

[1] SCR 20:1.15(1) and (3).

[2] Note that lawyers are required to keep full, complete, and accurate record of trust accounts – see SCR 20:1.15(g) – so the circumstances should be rare where the owner of funds held in a trust account cannot be identified.