Solicitor’s Trust Account Declaration
Law firms holding client funds in a solicitor’s trust account are required to have their trust account examined and a declaration lodged with the relevant state legal services regulator each year. We provide trust account examinations and declarations for Melbourne law firms, giving you confidence that your trust accounting complies with legal profession regulations.
What Is a Trust Account Declaration?
A trust account declaration is a statement, supported by an independent examination, confirming that a law firm’s trust account has been operated in accordance with the relevant legal profession legislation and regulations for the reporting period. It’s a mandatory annual requirement for firms holding client trust money, separate from the firm’s own tax return and financial statements.
What We Check During a Trust Account Examination
- Trust account receipts and payments are properly authorised and recorded
- Trust ledger accounts are accurately maintained for each client
- Trust account reconciliations are performed regularly and accurately
- Funds are held and disbursed in accordance with client instructions and legal requirements
- Any trust account shortfalls or irregularities are identified and reported
Why Trust Account Compliance Matters
Trust account breaches are taken seriously by legal regulators and can carry significant professional consequences for principals and practice managers. A properly conducted examination each year gives you early warning of any process gaps before they become a compliance issue, alongside satisfying the mandatory reporting requirement.
Preparing for Your Trust Account Examination
Having your trust account reconciliations, ledger records, and supporting documentation for the reporting period organised in advance makes the examination faster and less disruptive to your practice. We provide a clear checklist of what’s needed before we begin.
Working With Law Firms of All Sizes
We work with sole practitioners through to multi-partner firms, tailoring the scope of the examination to the size and complexity of your trust account activity for the year.
Frequently Asked Questions
Is a trust account examination mandatory for law firms holding client funds?
Yes – firms holding money in a solicitor’s trust account are generally required to have the account examined and a declaration lodged annually with the relevant legal services regulator.
What happens if an examination finds an issue with our trust account?
We discuss any issues directly with the practice as they’re identified, and any reportable matters are handled in line with the relevant regulatory reporting requirements.
What records do we need ready for the examination?
Trust account reconciliations, client ledger records, receipt and payment documentation, and any related authorisations for the reporting period.
How long does a trust account examination take?
Timing depends on the size and complexity of your trust account activity – well-organised records generally mean a faster turnaround.
Do you work with sole practitioners as well as larger firms?
Yes – we work with law firms of all sizes, tailoring the examination scope to your practice’s trust account activity.
How much does a trust account examination cost?
Cost depends on the volume and complexity of trust account transactions during the reporting period. We agree a fixed fee upfront.
Related Audit & Compliance Services
Trust account compliance is a similar concern across several regulated industries we work with – see our rental trust account audit page for the equivalent requirements real estate agencies face, and our incorporated association audit and not-for-profit audit pages if your firm also has related entities needing an annual audit.
The cost and timing of a solicitor’s trust account examination depends on your firm’s transaction volume for the reporting period – we provide a checklist of exactly what records are needed before the examination begins, so there are no delays getting your declaration lodged.