Receipt of Trust Money and Property

Conditions Upon Which Money is Held in Trust

The Rules set out lawyers’ obligations with respect to trust money (Rules of the Law Society of Alberta, Rule 119.21(1)). When receiving trust money, a lawyer must obtain from the client in writing:

    • confirmation that the money is to be held in trust; 
    • any conditions upon which the money is to be held in trust including if transferred to or from a SIBA; and 
    • any instructions directing that the money be paid to a person other than the client. 

Trust conditions and undertakings are significant commitment made by lawyers with an expectation that they will be honoured once agreed upon. Please review this Trust Conditions Guideline for further information. 

Typically, you will expect to receive trust money deposited into your trust account and may have negotiated specific trust conditions governing these funds. However, sometimes a lawyer receives funds in trust without a clear understanding of their obligations. 

Trust Property

The Rules set out a law firm’s obligation with respect to trust property (Rule 119.26). The lawyer must:

    • promptly notify the client that it received the property;
    • immediately label or otherwise identify the trust property as the client’s property;
    • maintain a record of the property, including a reasonable estimate of the value of each item of property;
    • keep the property safe and secure;
    • prohibit persons not entitled to do so from having access to the property; and
    • provide the client with information the client seeks regarding the property. 

Lawyers must safeguard, segregate and account for trust property. 

Lawyers must be aware of specific trust conditions that are attached to trust property. If they cannot meet the specific trust conditions, they must either have the trust conditions amended or return the trust property. 

All lawyers should have a basic understanding of the fiduciary duties they owe to clients with respect to trust property. 

Last modified: Monday, 21 August 2023, 10:41 AM