Chase Bank and IOLTA Accounts

It’s alarming to me but true.  One of the most frequently-searched phrases that brings visitors to this site is some combination of the phrases “chase bank”, “iolta account”, “estate.”  Therefore, for those who quite possibly are in need of a summary of my experiences with Chase Bank, I’m going to re-tell the whole story in a single post, simple and to the point.

What follows is the true story of how Chase Bank intentionally lied in an attempt to prevent me from closing Maggie’s IOLTA account.

April 1, 2010 I visited the Chase Bank branch at 3317 Northland Dr. with the intent of closing Maggie’s two business accounts she was using in her law practice.  I had with me the official letter from the court titled “Letters of Administration” and a copy of Maggie’s death certificate.

I spoke with Janina who eventually, after discussing the matter with someone at the corporate offices, told me that she could close one account, the general business account, but the other account, an IOLTA account, would require another document called a “Letter of Instruction” from the Texas Bar Association.  Without that document, she would no longer be able to assist me with this matter.  Her response to my pointing out the official document from the court that empowered me to act on behalf of Maggie’s estate was “we have our own requirements.”

I checked with the Texas Bar Association.  They don’t issue any letters of instruction nor do they involve themselves whatsoever with IOLTA accounts.  In other words, the letter of instruction that Chase Bank was insisting I produce doesn’t exist.

My probate attorney called Chase Bank, specifically Janina,  to try to clarify the situation.  They reiterated their requirement.  We asked Chase Bank for an example letter of instruction and they could not produce one.

After many conversations with Chase Bank, on May 26, 2010, they finally agreed to close Maggie’s account with the following caveat.  They would address the check to: “Jason Weaver, Independent Administrator of the Estate of Maggie Mae Weaver, IN TRUST FOR THE CLIENTS OF MAGGIE MAE WEAVER, ATTORNEY AT LAW (IOLTA ACCOUNT PROCEEDS)”  I refused the check because I know there would be no way whatsoever to get that checked deposited into any bank.

So, I called out for help from some friends.  A local TV station, KVUE, saw a story and ran it on June 3, 2010 highlighting what had happened.  Prior to running the story, the reporter asked Chase for comments and they refused.  After running the story, some attorney for Chase Bank called the reporter and was extremely angry and confrontational.  Apparently, the story struck a nerve.

June 8, 2010, five days after the new story ran on KVUE, a representative from Chase Bank’s “Executive Office” in Houston left me a voicemail wanting to discuss “my situation.” Now Chase Bank is calling me.

June 9, 2010 I had a series of discussions with Jimmy Laguna from the Executive Services department at JP Morgan Chase in Houston.  He explained to me that:

–          Chase Bank is all about customer service and he regrets what happened (no apology… just regrets)
–          They knew that there was no such thing as a Letter of Instruction from the Texas Bar Association (Chase Bank was knowingly lying)
–          He (and the Executive Services department) got involved because of the story that ran on TV
–          Were it not for the media exposure this account would likely have just been held by Chase Bank forever
–          Chase Bank does not consider the IOLTA account as part of Maggie’s estate and therefore my authority as administrator of her estate did not apply to the IOLTA account
–          I needed to provide proof that the IOLTA account was included as part of Maggie’s estate
–          Chase Bank would accept as a deposit into a new account at Chase Bank the check they offered to write (I refused on the grounds I didn’t trust or want to deal with Chase Bank ever again)
–          This situation is extremely rare and that he’s never seen or heard of this issue before (the issue being an estate administrator trying to close an IOLTA account)
–          Because of my situation “procedures have been changed” to better handle this in the future

Since the gating factor seemed to be the whole IOLTA-not-part-of-the-estate thing, I offered up the estate inventory I gave to the courts for Maggie’s probate hearing.  The inventory specifically shows the IOLAT account.  Additionally, during the proceedings, the judge asked about the IOLTA account which could be seen in an official court transcript, if needed.

I sent over a scanned copy of the estate inventory showing the IOLTA account as part of her estate.  Mr. Laguna said he would present this to his attorneys for determination.  I asked if these were the same attorneys that were asking me for a letter that didn’t exist.  He stated “no, these are the real attorneys.”

June 11, 2010 I received FedEx package from JP Morgan Chase containing one printed check payable to The Estate of Maggie Mae Weaver for the full amount of the IOLTA account.

9 thoughts on “Chase Bank and IOLTA Accounts

  1. It occurs to me that, if you’ve had many search hits on Chase Bank, IOLTA, and estate, Mr. Laguna’s statement that “This situation is extremely rare and that he’s never seen or heard of this issue before (the issue being an estate administrator trying to close an IOLTA account),” may indicate that he leads a very sheltered life. Did he mention that he lived in a penthouse as a recluse, was terrified of germs, saved his own urine and nail clippings,and maybe had a close relative whose last name was Hughes?

  2. A little different but still in dealing with the insane bureaucracy that we’ve all become accustomed to. My wife passed away at about the same time Maggie did. So I went to the bank (TD Bank North) to close out the accounts. I provided them with the death certificate. She had one pass book account and one checking account. They took care of that promptly. The final account was my checking account that she was a co-signer. They could not take her name off according to the branch. They stated that they could close the account and I could open up a new one but they were not allowed to remove a name. Did not make sense but the manger stated these are new banking – ant money laundering laws or something like that. I went to another branch and guess what – they removed her name on the spot – ever wonder why the economy is in the shape it’s in? I know – big business is prohibited from making common sense decisions – must be an ant money laundering law or something.

  3. Chase has been very arrogant with my situation regarding a client. This matter could have been resolved for less than $2000. Ridiculous that they would not let me speak to their legal department since I am an attorney. I guess they would rather pay for legal defense. Also handled, rather mishandled out of their Houston Office

  4. Condolences to persons who have lost close family or friends. Thank you for your post.

    I am one of those people who landed on your page because I searched “Chase” and “IOLTA.” I recently moved to Southern California and need to open a new IOLTA here. There is a Chase around the corner so I thought why not open my IOLTA there for convenience. But thanks to your post, I will not be doing that. I already have a well-justified disdain for big banks in both my personal and professional dealings with banks. To their credit, credit unions are a little better.

    As for folks having issues with banks, there is much you can do at no cost to handle incompetent and ignorant bank employees. Some states have more consumer protections than others but here is a link to get you started: http://www.helpwithmybank.gov/national-banks/national-banks.html

  5. Thanks for posting this story in detail. I am one of the Google users who found your site because of searching Chase Bank and IOLTA accounts. I will NOT be opening an account with them now. I’m sorry for the awful time you had with them.

  6. I am a lawyer who came across your site via keywords “Chase” and “IOLTA.” I do agree that Chase mishandled the situation and lied about it. However, I actually agree with them that the IOLTA account should never have become part of the “estate.”

    An IOLTA account is a Trust account, holding client funds for the purpose of possibly transferring those accounts to the attorney’s account once they are earned.

    Until they are earned, however, they are not the attorney’s money – they are the client’s money. Since they are not the attorney’s money, they cannot be part of the attorney’s estate, unless there is evidence that those funds were earned just prior to death, and just not transferred over to the attorney’s account yet.

    What should have happened, legally-speaking, is that someone (e.g. a Trustee) acting on behalf of the law firm (not an Executor on behalf of the estate, although this could perhaps be the same person) should have: 1) sought the Trust Account records to see who the money belongs to (which clients are owed how much); 2) sought the billing records of the law firm to see if any of that money was “earned” by the attorney prior to her death; 3) paid the “earned” money from the law firm trust to the estate; and 4) REFUNDED the un-earned fees to all of the clients whose money was being held in trust and not yet earned.

    There is no principle or law anywhere, that I know of, that allows a lawyer to keep client trust funds on the basis of the lawyer’s death. Instead, those funds should be returned to the clients who own the money.

    Now, it is another challenge how a Trustee would have gotten the power/authority to access the trust account, access the business billing records, write earned-fee checks from the business to the estate, and issue refund checks to the clients for the rest of the unearned trust amounts. I assume the proposed Trustee would need to file an action in probate court, on behalf of the business, to get a court order granting these powers.

    I suspect Chase was trying to follow the principles above, but they just were not doing it very well, and were creating worse problems than necessary. And they should not have lied and come up with delay tactics, and false “necessary documents,” and all that other B.S.

    As for me, this story certainly is a lesson that I should write a Trust that names a Trustee, and that grants them powers to: 1) wind down my law business; 2) complete invoices and determine earned fees; 3) transfer earned fees from client trust account to operating account; 4) issue a final earned-fee check to my estate; and 5) issue refunds of all client-trust money to the clients to whom it belongs.

    I am sorry, though, for your loss, and for all the difficulty you have had in resolving that matter. I’m glad it was resolved for you.

    1. Bert, Thank you for both taking the time to respond and for explaining all this in detail. Your explanation fills some holes in my understanding of a very confusing situation.

      Fortunately, (and I’ll update the post to reflect this in to prevent other readers from suspecting me of malintent) the very small amount of funds that were held in the IOLTA account had been accounted for, both by Maggie verbally and by a close and trusted colleague of hers who knew the details of her business. This same colleague explained the circumstances regarding the funds to the judge during the probate hearing who then declared the funds as part of her estate. Certainly, had I believed otherwise, I would have taken other steps.

      Thanks again. And yes, please, for those who might come after me and be left to deal with these complexities, leave unambiguous instructions and make sure there’s a cosigner on the account. Just in case. If something were to happen that would necessitate those details, it’s a lousy time to fight the bank.

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