Trust Accounting Guide

1 Trust Accounting GuideTrust Money and Trust AccountsMay 2021 Queensland Law Society | Trust Accounting Guide Version 9 Page 2 of 86 Part Legal Profession Act 2007 | Version 9 | May 2021 Trust Accounting GuideTrust Money and Trust AccountsCopyrightAll intellectual property in relation to this material (including any copyright notice and disclaimer) belongs to Queensland Law Society (QLS) and is protected by Australian and international copyright and other intellectual property laws. You may not do anything which interferes with or breaches those laws or the intellectual property rights in the content. The material cannot be used, reproduced by any process, electronic or otherwise, or adapted without the specific permission of QLS apart from any use permitted under the Copyright Act logo is a trademark of QLS.

2 QLS does not grant any licence or right to use, reproduce or adapt QLS logo without express written permission of has been taken in the preparation of the material in this document. However, QLS does not warrant the accuracy, reliability or completeness or that the material is fit for any particular purpose. By using the information, you are responsible for assessing the accuracy of the material and rely on it at your own the extent permitted by law, all other representations, conditions or warranties, whether based in statute, common law (including in negligence) or otherwise are excluded. QLS does not accept any liability for any damage or loss (including loss of profits, loss of revenue, indirect and consequential loss) incurred by any person as a result of relying on the information contained in this information is provided as part of an educational program and is not given in the context of any specific set of facts pertinent to individual persons.

3 The instruction is not legal advice and should not be construed as such. The information is provided on the basis that all persons accessing the information contained in this document undertake responsibility for assessing the relevance and accuracy of its Law Society179 Ann Street, Brisbane, Qld 4000 GPO Box 1785, Brisbane Qld 40011300 367 757 | Law Society | Trust Accounting Guide Version 9 Page 3 of 86 Table of Contents1. Introduction .. The Legislative Regime ..72. Trust moneys .. Definitions .. What is Trust Money? .. What is not Trust Money? .. Disclosure to clients money not received or held as Trust money .. Decisions about status of money .. Trust Money Decision Flowchart ..113. Dealing with Trust Money Generally .. Establishing a General Trust Account .. Notifications regarding New General Trust accounts.

4 Authorised associates/ Trust account signatories .. Notification of authorising/terminating .. Annual requirement to give notice .. Controlled money authorisation/termination .. Funds to be deposited to the General Trust account .. Trust moneys received in the form of cash .. Holding disbursing and Accounting for General Trust Money .. Intermixing Money .. Deficiency in Trust account .. Reporting certain irregularities and suspected irregularities .. False Names ..164. Trust Accounting Records General Trust Account .. Keeping Trust Account Records .. Overview of General Trust Records .. Trust account receipts .. Particulars of Trust Account Receipts .. Informative recording .. Issue of Trust account receipts .. Unknown Deposits NEW .. Receipts by telegraphic transfer and direct deposit.

5 Risks of deficiency .. Receipts by Credit Card Clearance of Cheques Receipted .. Receipt of Foreign currency cheques .. Cancelled receipts .. Dishonour of Cheques receipted Reversal of Receipts .. Register of receipt Deposit records .. Prompt Banking of General Trust Funds .. Withdrawal by Cheque or Electronic Funds Transfer .. Cheques .. Cheque Butts and Cheque requisitions .. Paid cheques .. Electronic Funds Transfers (EFT) Payments ..32 Queensland Law Society | Trust Accounting Guide Version 9 Page 4 of Electronic Funds Transfers (EFT) written records .. Purchasing Bank Cheques NEW .. Cheque reversal .. Stale cheques .. Trust account bank statements .. Trust account cash books .. Trust account receipts cash book .. Trust account payments cash book .. Trust ledger accounts.

6 Trust ledger account detail .. Separate ledger accounts Stakeholder accounts .. Separate Trust ledgers miscellaneous, administration, etc NEW .. Trust ledger account in name of the law practice .. Archiving Trust ledgers .. Referring to the ledger before drawing a Trust account cheque .. Clearance of surplus Trust funds .. Trust transfer journal Particulars .. Trust account reconciliations .. Preparing the cash book balance reconciliation .. Preparing a listing of individual Trust ledger balances .. Preparing the approved ADI reconciliation statement .. Non receipted direct deposits and/or telegraphic transfers .. Outstanding deposits or receipts .. Unpresented Trust account cheques .. Approved ADI errors .. Dormant Balances NEW .. Trust Account Statements .. Particulars of a Trust Account Statement.

7 Delivery of Trust Account Statements .. Exemptions from furnishing Trust Account Statement at 30 June ..525. Controlled Moneys .. Definition of Controlled Moneys .. Money Received .. Written direction .. Exclusive Control .. Controlled Money Accounts .. Controlled Money Records .. Written direction records .. Controlled money receipts .. Particulars for controlled money receipts .. Interest/other income .. Withdrawal of controlled money .. Controlled money written record .. Register of controlled moneys .. Controlled money control account .. Controlled Money Movement Record .. Monthly listing of controlled money accounts .. Trust Account Statements Controlled Money Accounts ..62 Queensland Law Society | Trust Accounting Guide Version 9 Page 5 of 866. Transit Moneys .. Definition of Transit Moneys.

8 Record keeping requirements .. Cash cannot be treated as transit money .. Trust account statements Transit moneys ..637. Power Moneys .. Power or Record keeping requirements .. Register of powers and estates in relation to Trust money .. Power Money received in cash .. Trust account statement Power Money ..658. Written direction moneys .. Definition of written direction moneys .. Definition of appropriate persons .. Example of written direction moneys .. Record keeping requirements .. Cash cannot be treated as written direction money .. Trust account statement Written direction moneys ..669. Investment moneys .. Definition of investment moneys .. When Investment money is not Trust moneys .. Example of investment moneys .. Procedure for Investments .. Record keeping requirements.

9 Written authority to Invest .. Evidence of Investment .. Register of Investments .. Investment Control Account .. Investment ledger accounts ..7010. Withdrawing Legal Costs from Trust Money .. Withdrawal on issue of bill .. Withdrawal with Authority .. Withdrawal for Reimbursement Outlays/Disbursements .. Retaining written instructions .. Internal costs/sundries NEW ..7311. Written directions and authorities .. Trust account authorities .. Costs transfer authorities .. Written directions Controlled Money Account .. Written directions Transit Moneys .. Investment authorities ..7512. Unclaimed monies .. The return ..7613. Prescribed Account Deposits ..77 Queensland Law Society | Trust Accounting Guide Version 9 Page 6 of 8614. Computerised Trust Accounting Systems .. Requirements regarding computer Accounting systems.

10 End of month Trust reports to be printed .. Keeping and Printing Trust Records .. File maintenance audit trails .. Overdrawn Trust ledger reports .. Controls over deletion of ledger accounts .. Entry and input requirements .. Back-up facility requirements .. Changing from one computerised system to another NEW ..7915. External Examinations .. External Qualification of an external examiner .. Appointment of external examiner .. Notification of ceasing to be external examiner .. Other reports by the external examiner .. Part A Declaration requirement NEW .. External Examiner s Report and Law Practice Declaration and Trust Money Statement .. Scenarios for lodgement of Law Practice Declaration and/or External Examiner s Report .. Examination Closed Trust account NEW .. Examination Ceased law practice.