June 10, 2015 Articles

State Law Permitting, Classic Retainers Are Not Property of the Estate

A retainer remains property of the law firm, not the client.

By Zachary I. Shapiro

A classic retainer becomes property of the law firm immediately upon payment to the extent permitted by state law. If, after that payment is made, the client commences a bankruptcy case, the payment, to the extent it is properly characterized as a classic retainer, remains property of the law firm and is not property of the client’s estate.

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