25 Oct Legal Fees on Your Docket? Pay Them Off with Cryptocurrency
Cryptocurrency, otherwise known as digital currency, is becoming more popular. To keep up with the times and the popularity of this new form of “money,” The Nebraska Lawyers’ Advisory Committee recently published an advisory opinion giving Nebraska lawyers the OK to accept digital currency as a form of payment. Read on to discover what the Nebraska Lawyers’ Advisory Committee is and how you can pay off your legal fees using cryptocurrency.
What is the Nebraska Lawyers’ Advisory Committee?
The Nebraska Lawyers’ Advisory Committee is an eight member committee appointed by the Nebraska Supreme Court. Every Supreme Court Judicial District in Nebraska has a representative member on the committee. The committee’s job is to answer ethical questions asked by Nebraska lawyers. In order to answer the lawyers’ questions, the committee examines and weighs each question against the state’s Rules of Professional Conduct. The committee then provides an advisory opinion in response to each question.
How to use cryptocurrency to pay off legal fees
In September, the committee was asked if lawyers could accept cryptocurrency, such as Bitcoin, as payment for legal fees. The committee’s advisory opinion said yes, so long as they followed several rules. Lawyers can accept cryptocurrency as payment but must immediately convert the payment to U.S. currency. Since the value of cryptocurrency fluctuates similar to the way stock prices fluctuate, converting the money right away prevents clients from overpaying for services. So, if you have legal fees due in Nebraska, you can now pay them off using digital currency.
Other ways to use digital currency in the Nebraska legal system
Two other questions regarding digital currency appeared before the committee in September. The first question asked whether an attorney could receive digital currency from third parties as payment for or to benefit a client’s account. The second question asked if an attorney could hold digital currency in trust or escrow for a client. The committee answered yes to both these questions with several rules put into place as well.
In response to the first question, the committee said third-party payments can be accepted as long as the party is identified. Additionally, the payment cannot affect the lawyer’s independent relationship with the client.
For the second question, the committee advised that an attorney can hold cryptocurrencies in escrow for a client. However, the cryptocurrency must be property rather than currency and must be kept separate from the lawyer’s property. Records also have to be kept for a five-year period.
Why is the committee’s opinion important?
The Nebraska Lawyers’ Advisory Committee’s opinion is important because it marks the first time a state ethics body has answered questions regarding digital currency payments. To learn more about cryptocurrencies’ involvement in estate planning check out our blog on Bitcoin here.