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Attorney Paymaster vs. Escrow Company: Which One Fits Your Deal?
Both an escrow company and an attorney paymaster hold money until the conditions of a deal are met. The right choice depends on the type of transaction, how many parties are involved, and how much flexibility the payment instructions need.
Escrow companies
In California, independent escrow companies are licensed by the Department of Financial Protection and Innovation. They work well for standard, high volume transactions such as home sales, where the steps are predictable and the paperwork follows a familiar form. They are less suited to unusual deals, international parties, or long chains of commission payments.
Attorney paymasters
An attorney paymaster is a licensed lawyer who holds funds in a client trust account. Because the paymaster is a lawyer, the arrangement can be tailored to the deal: staged releases, payments to multiple intermediaries in different countries, holdbacks until delivery documents arrive, and instructions written to match the underlying contract.
Side by side
| Escrow company | Attorney paymaster | |
|---|---|---|
| Oversight | State licensing regulator | State Bar and trust account rules |
| Best for | Standard real estate and business sales | Commodity trades, commissions, international deals |
| Custom instructions | Limited to standard forms | Written to match your contract |
| Multiple beneficiaries | Possible but uncommon | Routine |
| Legal review of documents | No | Yes, as part of accepting the engagement |
Questions to ask either one
- Who exactly holds the funds, and in what kind of account?
- What documents will you need from every party before funds can be received?
- How and when are disbursements made, and what proof of payment will I receive?
- What happens if the deal falls through?
- What is the total fee, and is it in writing?
Any legitimate escrow agent or paymaster will answer these questions clearly and in writing. See how our attorney escrow services work. Read our FAQ for our answers, or contact us about your transaction.
This article is general information, not legal advice for your situation. Reading it does not create an attorney client relationship.
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