Trust Account Tips

Trust Account Tips

When depositing funds to the trust account:

1. Check to make sure that the deposit slip you're using is for the correct account, and that your deposit slips include an appropriate trust account label such as Arizona IOLTA, Arizona Client Trust Account, or some other similar wording.

2. Make an entry for the date, amount, and payor of funds for the deposit on the corresponding individual client ledger(s). Be sure to total the transaction and create a new ending balance on the client ledger after each transaction.

3. Make an entry for the date, amount, and payor of funds for the deposit on the trust account general ledger/checkbook register. Again, be sure to total the transaction and create a new ending balance on the ledger/register after each transaction.

4. Complete the duplicate deposit slip, identifying the corresponding client(s) whose funds are involved. If not using a duplicate deposit slip, complete a deposit log or some other documentation to identify the date, amount, and payor of deposited funds, and the corresponding client(s).

5. Make the deposit and retain the bank receipt. Check with the teller to determine if a deposit hold is going to be placed and, if so, for how long.

When disbursing funds from the trust account:

1. Check to make sure that the checkbook you're using is for the correct account, and that your checks include an appropriate trust account label such as Arizona IOLTA, Arizona Client Trust Account, or some other similar wording.

2. Check the individual client ledger(s) for whom you are drawing the disbursement for to ensure that the trust account has a sufficient balance to cover the disbursement.

3. Confirm that the funds that you're disbursing against are collected and available for use in the trust account.

Did you verify that the offsetting funds have been credited to the trust account?

Did you verify with your bank that any deposit holds have been released?

Did you check with the bank that the deposited check is drawn on to ensure that it has paid the check?

Did you disburse from the client trust account by pre-numbered check or electronic transfer only and not by a withdrawal?

4. If the funds are uncollected, follow "Checklist for Disbursing Against Uncollected Funds."

5. Make an entry for the date, amount, and payee of funds for the disbursement on the individual client ledger(s). Be sure to total the transaction and create a new ending balance on the client ledger after each transaction.

6. Make an entry for the date, amount, and payee of funds for the disbursement on the trust account general ledger/checkbook register. Again, be sure to total the transaction and create a new ending balance on the ledger/register after each transaction.

7. Draw the check and identify the corresponding client(s) in the memo portion of the check.

8. If conducting a wire or electronic transfer, ensure that the transaction is clearly identified on the corresponding client ledger(s) and on the trust account general ledger/checkbook register. Double-check account numbers for accuracy and be sure to record or print out the confirmation number for the transaction.

For more information about Trust accounts, contact the Bar's Trust Account hotline at 602.340.7305, the Law Office Management Assistance program at 602.340.7313, or access the Trust Account Manual.   Remember, this is simply a tool to assist the lawyer in the proper trust account usage; however, lawyers should ALWAYS refer to Rules 42, ER1.15 and 43, Ariz. R. Sup. Ct, for complete instruction when conducting trust account transactions.