Hi I would like to set up a client trust account for car accident settlement so I could negotiate with medicaire and medi-cal and remit the remaining balance to the client/injured party in the accident. I am not an attorney, but am a cpa and also related to the injured party. Basically there is no attorney on the accident claim. We negotiated the settlement directly and the insurance company offered an amount and is ready to pay. Do you foresee any issues with this? Is this something you recommend. I imagine it would just be an irrevocable trust and there would need to be language that it is for the accident settlement and all liens would be satisfied as part of the terms of the trust.

Jeffrey Lippman ∙ September 10, 2019

I don't see any obvious issue with an earmarked type account treated as escrow, but there either needs to be a provision for such an account in law or there are tax consequences. There may be ethical or legal limits under your CPA rules to act in this capacity. I'd at least recommend your client grant you a Power of Attorney. Many, if not all, States have laws against the unauthorized practice of law. This is a very real concern of mine, especially if your client is not pleased. I'd recommend you contact your CPA ethics hotline or a similar resource, and set up a consultation with your LegalZoom provider law firm.


Jeffrey Lippman's offices are located in Leesburg, Virginia. Mr. Lippman is licensed to practice law in the District of Columbia and the state of Maryland, and his comments may only apply to those jurisdictions. If your question applies to a different jurisdiction you should check with an attorney in that jurisdiction. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation and any information you provide is not protected by attorney-client privilege.

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