Trust Account Competencies

1.     Opening Accounts for a legal practice

1.1   Demonstrate understanding:

1.1.1       of the difference between a Trust account, SNSMR trust account and General Account
1.1.2       of the meaning “trust property” (1.1.1(cc))
1.1.3       of the meaning of “trust money” (1.1.1 (dd))
1.1.4       the rules regarding interest for trust accounts
1.1.5       the rules for naming a Trust account (10.5.2)
1.1.6       the requirement for a Trust account (10.2.4)
1.1.7       how service charges should be addressed

1.2   Outline the Trust Account Opening Process

1.2.1       Identify who must be contacted to open a Trust Account
1.2.2       Identify the requirements that must be met to open a Trust Account
1.2.3       Explain the trust account opening process

2.     Managing Trust Accounts

2.1   Deposits

2.1.1       Demonstrate an understanding of what should be deposited in a Trust account (10.2.1)
2.1.2       Identify the requirements for handling cash over $7500.00 (4.4.4)
2.1.3       Demonstrate an understanding that only trust money can be deposited and held in a Trust account (10.2.6, 10.2.7)
2.1.4       Identify the timing related to the deposit of trust funds (10.2.3)
2.1.5       Explain how the receipt of items in trust is documented (10.2.2, 10.2.5)
2.1.6       Explain how trust funds being held for more than 30 days are to be handled
2.1.7       Describe the duty to supervise (10.2.10)

2.2     Withdrawals

2.2.1  Identify that all withdrawals must be to a named payee (10.3.5(a))
2.2.2  Explain the requirements for the authorization of the withdrawal of trust funds (10.3.5)
2.2.3  Explain the requirements for the authorization of the withdrawal of trust funds for sole practitioners (10.3.6)
2.2.4  Identify the requirements for electronic fund transfers
2.2.5  Demonstrate an understanding of the manner in which trust funds cannot be withdrawn (10.3.7)

3.     Maintaining Records

3.1   Required Records

3.1.1       Demonstrate an understanding of the required books and ledgers for a trust account (10.4.2 (a), (b), (c), (j) and (i))
3.1.2       Demonstrate an understanding of the required records for trust property (10.4.2(d))
3.1.3       Demonstrate an understanding of the required records for a general account (10.4.2 (e) and (f))
3.1.4       Demonstrate an understanding of the required records for billings and other charges to clients (10.4.2(g))

3.2     Maintenance of Records

3.2.1       Explain what records must be retained
3.2.2       Identify how long records must be retained (10.4.1 (c))
3.2.3       Demonstrate an understanding of when records should be updated (10.4.1.(b))
3.2.4       Perform record keeping in a simple set of manual trust books of account
3.2.5       Perform a simply bank reconciliation
3.2.6       Prepare a list of client trust ledger balances from a simple set of manual trust books of account
3.2.7       Review all records prepared by others

4.     Working with a SNS Trust Account

4.1   Demonstrate understanding of:

4.1.1       the purpose of a SNS trust account (10.5.3 and 10.5.4)
4.1.2       how a SNS trust account is named (10.5.2)
4.1.3       what funds can be deposited to a SNS trust account
4.1.4       the requirement to deposit recording fees and deed transfer tax funds in trust
4.1.5       the process for the withdrawal of funds for the SNS trust account (10.5.5 – 10.5.13)
4.1.6       the authority to delegate (10.5.14)

4.2   Maintenance of Records

4.2.1       List the records to be printed and reviewed (10.5.9 – 10.5.12)
4.2.2       Identify which records must be retained (10.5.13)

5.     Reporting and Addressing Errors

5.1    Demonstrate an understanding of

5.1.1       the definition of an overdraft (10.1.1(e))
5.1.2       the  requirement  to  maintain  sufficient  balances  in  trust  to  meet  all  trust obligations and to address overdrafts immediately (10.6.1)
5.1.3       the requirement to report and provide a full explanation of any overdrafts immediately to the Executive Director of the Society (10.6.3)
5.1.4       the need to correct errors without delay (10.6.2)
5.1.5       when an overdraft is not a violation (10.6.4)

5.2   Identifying and Addressing Overdrafts

5.2.1       Identify overdrafts arising from various sources
5.2.2       Explaining the process to rectify overdrafts

6.     Audits/Investigations

6.1   Investigation Process

6.1.1       Identify who can initiate an investigation/audit (10.7.1)
6.1.2       Explain when an investigation/audit can be initiated (10.7.1 and 10.7.2)
6.1.3       Demonstrate an understanding of what documents must be produced (10.7.4)
6.1.4       Explain the overall investigation/audit process (10.7.5 and 10.7.6)
6.1.5       Demonstrate an understanding of the ramifications of non-compliance (10.7.7)