As part of its mandate to protect the public, we hold lawyers accountable for properly dealing with all client funds and property held in trust. Find the current Trust Account Regulations under Part 10 of the Regulations.
Trust Account Regulation FAQs
Trust Account Forms & Documents:
- TAR – Trust Account Report (working copy)
- ARTAR – Accountant’s Report on the Trust Account Report (working copy)
- ARTAR – Engagement Agreement for Accountants (specified procedures)
- ARTAR – Sample Accountant Engagement Letter
- Electronic Transfer of Funds Form
- Application for Disposal of Undistributed Trust Funds
- Trust Account and Client Ledger Shortages form
- Lawyer certification (effective January 24, 2020)
Opening a Trust Account
A lawyer must obtain authorization from the Society prior to opening and operating a trust account.
Steps required for trust account authorization:
- Review Regulation 4.10 “Operating a Trust Account”;
- If required, successfully complete the Society’s Trust Account Assessment;
- Confirm that appropriate arrangements, in writing, have been made with the financial institution to comply with the requirements of Section 30 of the Act; and
- Submit a Lawyer’s Certification.
After opening the account, the lawyer is required to provide the particulars of their trust account(s) to the Society’s Trust Assurance Administrator.
After lawyers have successfully completed the requirements for operating a trust account, they will receive a confirmation email from the Society permitting them to operate their trust account.
Trust Account Assessment
The Society developed the Trust Account Assessment to assess a lawyer’s knowledge and ability to apply the requirements of the Trust Account Regulations. The assessment takes into consideration the competencies a lawyer should demonstrate to operate a trust account.
The assessment is administered through an online platform and includes multiple-choice questions and a simulation question. Lawyers have seven days to complete the Assessment.
Contact the Society’s Trust Assurance Administrator Mhairi McInnis at email@example.com for a link to the online trust account assessment.
Trust Account Competencies
The Trust Account Assessment takes into consideration the competencies a lawyer should demonstrate to operate a trust account.
1. Opening Accounts for a legal practice
2. Managing Trust Accounts
3. Maintaining Records
4. Working with an SNS Trust Account
5. Reporting and Addressing Errors
The Lawyer’s Certification confirms the lawyer has read and reviewed the Legal Profession Act and the regulations relating to trust accounts. It further confirms the lawyer has completed the Trust Account Assessment without assistance from any other person. Lawyers must also provide the Society with details of their trust account(s).
Closing a Trust Account
Upon closing a general trust account, the practicing lawyer or law firm must immediately give written notice to the Society’s Executive Director.
Lawyer(s) closing their practices cannot change category or resign until their trust account is closed. In addition to dealing with the distribution of funds in the trust account, lawyers must complete and file their final trust account report and accountant’s report.
Annual Reporting Requirements
All practising lawyers are required to report annually on their involvement with trust accounts.
Practising lawyers or law firms operating one or more general trust accounts must submit a trust account report to the Society’s Executive Director annually by March 31 and submit an accountant’s report annually by March 31.
Undistributed Trust Funds
To help members manage their trust accounts and, upon sufficient demand, the Society will make a Chambers Application to turn over undistributed trust funds to the Public Trustee of Nova Scotia.
Trust Account and Client Ledger Shortages
Unless the overdraft is less than $50, a practising lawyer or law firm must immediately report to the Executive Director any overdrafts in the practising lawyer’s or law firm’s trust account, including any relevant information regarding the reason for the overdraft if
- the overdraft was not corrected within 7 days of the time the shortage arose; or
- the overdraft is an amount greater than $2,500, regardless of when it occurred.
The Society operates a primarily risk-based Trust Account Audit Program. This provides for audits of the trust accounts of selected lawyers and law firms, conducted by an accountant retained by the Society throughout the year. Those who are audited receive copies of the audit reports and the Society follows up with lawyers respecting all audit recommendations. Information respecting trends and concerns gleaned annually from the audits informs the Society’s education and other resources provided to lawyers and firms.
Questions about the Trust Account Audit Program? Please contact the Society’s Trust Assurance Auditor, Jocelyn MacNeill at firstname.lastname@example.org.
Please contact the Society’s Trust Assurance Team at TrustAccounts@nsbs.org.