4.3 Trust Conditions Governing the Receipt of Trust Money and Property
Usually you will expect to receive trust funds 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 his or her obligations in respect of these funds.
The Rules of the Law Society of Alberta (Rule 119.18(2)) sets out lawyers' obligations with respect to trust money:
(2) When receiving trust funds, a lawyer shall, whenever it is reasonably practicable to do so, obtain the following, in writing:
(a) confirmation that the money is to be held in trust;
(b) any conditions upon which the money is to be held in trust; and
(c) any instructions directing that the money be paid to a person other than the client.
Trust conditions and undertakings are extremely important commitments made by lawyers. The Practice Advisors have produced a helpful guideline on trust conditions and undertakings. Please review this Trust Conditions Guideline for further information.
Rule 119.28 sets out a law firm’s obligations with respect to trust property. The lawyer must:
(a) promptly notify the client of its receipt of the trust property, unless the responsible lawyer is satisfied that the client is already aware of the receipt of the trust property by the law firm,
(b) if the trust property does not on its face contain any identification of the client, immediately label or otherwise identify the trust property as property of the client,
(c) maintain adequate records of the trust property,
(d) keep the trust property safe and secure and in such a manner that it cannot be examined by persons not entitled to do so, and
(e) provide to the client any information sought by the client with respect to the trust property.