Rule 1501 sets out several pertinent definitions:
Note the broad definition of “trust funds” – funds received in your capacity as a lawyer that are not intended to immediately become your property.This definition includes funds received from persons other than your clients, such as funds received by you as purchase price for your client’s transaction or payment of a retainer by a family member of your client. It could also include all the beneficiaries of an estate, many, or all, of whom may not be your client in the traditional sense.
In some instances, you may be in a dilemma as to whom you can receive instructions from as to the use of the money. In extreme cases, you may need to apply to court to settle the question.
Think about the issues that might arise before you agree to accept funds from anyone other than your client. In transactional settings, set these out in trust conditions and undertakings. In other settings, if possible, have your “clients” agree who will give you instructions. In appropriate circumstances, consider advising other “beneficial owners” of funds that you are not protecting their interests.
Pursuant to Rule 1518, your records must be:
The minimum accounting records that you are required to maintain are set out in Rules 1519 and 1520. See Appendix A for a checklist of the required accounting records mandated under these Rules. Some of these items are reviewed in greater detail in the next section of this module.
Rule 1521 provides that you must record all transactions promptly, as follows:
The Law Society auditor may attend at your office at any time to review your books and records. Further, the Executive Director of the Law Society may at any time order a review of your practice to ensure that your books, records and accounts are being properly maintained. If either occurs, you must cooperate and comply with all reasonable requests (Rules 1533 and 1534).