Solicitors Trust Accounts are regulated by the Legal Profession Uniform Law (NSW), Legal Profession Uniform Law Application Act 2014, the Legal Profession Uniform Law Application Regulation 2015 and Legal Profession Uniform General Rules 2015.
These laws are in place to regulate the conduct of money held in Trust for clients. Such money might include funds required to settle property purchases, to pay stamp duty, probate filing fees, for distributions in deceased estates, for debts recovered, for settlement of claims, or funds required to pay legal expenses.
Trust accounts are subject to external examination every year, as well as periodic random audits by the Law Society’s Trust Department. These external examiners and auditors will check transactions through the Trust accounts to ensure they comply with the Regulations.
Solicitors are required to have written instructions to transfer funds from the Trust account. Often these instructions are incorporated into the Costs Agreement the firm enters into with the client.
Contrary to a common misconception, Solicitors do not earn any interest on clients funds held in their Trust account. In this state, all interest earned on funds in Solicitors Trust accounts are paid directly to the Law Society of New South Wales.
Clients may direct, if a significant amount is involved for a lengthy period, that their Solicitor deposit their Trust funds into a Controlled Money account to earn interest whilst funds remain under the control of the Solicitor.
On completion of a matter where Trust transactions have occurred, a Solicitor is required to provide a Trust Statement to the Client. On 30 June each year, subject to some exceptions, a Solicitor is required to provide Trust Statements to all Clients where there has been Trust transactions within the preceding 12 months.
Should you have any queries about Trust accounts, we would be happy to discuss them with you because Helping You is Our Business.
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