Trust Accounts

If you or your practice (in any form) receives trust money that is required to be deposited in a trust account, you must establish and maintain a general trust account in this jurisdiction with an approved authorised deposit-taking institution (ADI). 

Opening a General Trust Account

  1. When opening a general trust account, you must instruct your approved Bank (refer to Approved Deposit-Taking Institution (ADI) information) to: 
    1. ensure that the account is opened at a branch within South Australia;
    2. ensure that the account is opened as a Statutory Trust product, so that interest is credited to the statutory interest account and not your trust account;
    3. the account must bear the expression “law practice trust account” or “law practice trust a/c” (if the words “law practice” form part of the name or business name the law practice, there is no need for repetition of the words “law practice”);
    4. identify trust account cheque books with the name of the law practice or the business and the  expression “law practice trust account” or “law practice trust a/c” (if the words “law practice” form part  of the name or business name the law practice, there is no need for repetition of the words “law practice”);
    5. ensure the cheque books are crossed and marked “Not Negotiable” and preferably made payable either “to order” or “Account Payee Only”;
    6. debit all bank charges in relation to the trust account to your office/business account;
    7. forward monthly statements with transactions up to the last day of the month;
  2. You must notify the Society in writing within 14 days of opening the general trust account by submission of Form T.
  3. In accordance with the regulations, signatories to the general trust account must be: 
    1. an authorised principal of the law practice; or
    2. if a principal referred to in paragraph (a) is not available – 
      1. by an authorised legal practitioner associate: or
      2. by an authorised legal practitioner who holds an unrestricted practising certificate authorising the receipt of trust money; or
      3. by two (2) or more authorised associates jointly.
  4. Either before, or within 14 days after, authorising (or terminating) the authority of an associate of the practice:

a.    to sign cheques drawn on a general trust account of the practice; or

b.    otherwise to effect, direct or give authority for the withdrawal of money from a general trust account of the practice, you must give the Society written notice of the fact, (including the name and address of the associate or practitioner and indicating, in the case of an associate, whether the associate is an employee of the practice).  Refer to section 5A of the Legal Practitioners Act 1981 for the definition of an associate.

Click here to be directed to the Law Practice Reports Page, Trust Account and Signatories Report to provide the Society with notice of change.

5.    You must prepare monthly reconciliations even if there is no movement in the account. 

6.    If this is the first general trust account opened for the law practice, you must notify the Society in writing of the appointment of an external examiner within 2 months. Refer to the External Examiners information.

Closing a General Trust Account

The closure of a general trust account may be for a number of reasons, such as:

  • Closure of the law practice; or
  • Change of law practice entity; or
  • Changing banks.

Steps to closing the account:

1.    If the account is to be closed and the balance transferred to a new general trust account, you must do the following: 

a.    obtain the authority of each client with a trust balance prior to transferring their funds (only applicable where there is a change in law practice entity);

b.    ensure that there are sufficient funds left in the account to meet un-presented cheques;

c.     withdraw funds from the Combined Trust Account (if applicable) when required;

d.    when transferring the balance (whole or part) from the account to be closed, you must make the payment in accordance with Regulations 23, 24 and 25;

e.    when receipting the funds in the new account (if applicable), you must write out a receipt in accordance with Regulation 20;

2.    Once the balance is zero you should instruct your Bank to close the account;

3.    You must notify the Society in writing within 14 days of closing the trust account by submission of Form Y

4.    You must continue to prepare monthly reconciliations until the account is closed, at which point you must prepare a final reconciliation;

5.    The final Examination: 

a.    If the account has been closed as a result of the law practice closure or a change in the law practice name/entity, you must arrange a final Examination.  The report of the Examination must be lodged with the Society within 60 days after the end of the period to which it relates (i.e. the date of closure).

b.    If the account has been closed due to simply changing banks, the final Examination for the account can be carried out after the end of the financial year along with the Examination for the new trust account.

6.    Please read the Society’s Fact Sheet Intra-Firm Transfers Between General Trust Accounts, for further information.

Information for Law Practices

Your practice must appoint an external examiner to complete a written external examiner’s report on your trust records, which the examiner then forwards to the Society by 31 October each year. 

Only persons that are granted designated person status by the Society can be appointed by a law practice to conduct external examinations of their trust accounts.  A list of designated persons can be found here


Notification

Law practices are required to notify the Society in writing of the appointment of an external examiner by lodging Form J.   Law Practices are also required to inform the Society in writing of any change of appointed examiner by lodging Form K.

 

Information for Examiners

Only persons that are granted designated person status by the Society can be appointed by law practices to conduct external examination of law practice trust accounts.

Persons wishing to be granted designated person status must apply to the Society by lodging a Form I.



Eligibility Criteria

In order to qualify for designated person status, you must satisfy 1.1 or 1.2:

  • 1.1. Full membership of the Institute of Chartered Accountants Australia or CPA status with CPA Australia Ltd and either:
    • 1.1.1.status as a Registered Company Auditor; or
    • 1.1.2.a person who satisfies the Society that their experience and training in carrying out external examinations of legal practitioner trust account demonstrates the level of competence required of an external examiner.
  • 1.2. Be a person of good character with qualifications and experience which satisfies the Society of the person’s ability to carry out external examinations of legal practitioner trust accounts with a high degree of competence notwithstanding the absence of membership or status in 1.1.

For more information please refer to the Fact Sheet Designated Persons Criteria, Conditions and Protocol

 

The External Examination - Information for law practices

Pursuant to regulation 48 of the Legal Practitioners Regulations 2014 (Regulations) each law practice is required to complete and submit to the Society the Statement Regarding Receipt or Holding of Trust Money (Statement) in respect of the period 1 July to 30 June.

Law practices that did not receive or hold trust money during the period must complete Part A, only, of the Statement and submit to the Society by 31 October.

Law practices that did receive or hold trust money during the period must complete Parts A and B of the Statement and provide the documents to their external examiner, prior to the commencement of the external examination for relevant period. The external examiner must attach the Statement to the external examination report for submission to the Society by 31 October.

There are two (2) versions of the Statement. Please use the PDF version if you wish to print and complete by hand; and the Word version if you wish to complete on screen and then print off.

Statement Regarding Receipt or Holding of Trust Money (Statement) (PDF Version)

Statement Regarding Receipt or Holding of Trust Money (Statement) (Word)

Please read the Guidelines for the Completion of the Statement Regarding Receipt or Holding of Trust Money for further information.

 

Law practice checklist

A Law Practice Checklist is available as a guide of the various forms of trust records maintained by a law practice and to assist in the assessment of compliance with the Legal Practitioners Act and Regulations.  There are two (2) versions of the Checklist.  Please use the PDF version if you wish to print and complete by hand; and the Word version if you wish to complete on screen and then print off. There is no requirement to provide the completed checklist to the external examiner or the Society.

Law Practice Checklist (PDF Version)

Law Practice Checklist (Word Version)

 

Information for external examiners

The law practice is required to complete and submit a Statement Regarding Receipt or Holding of Trust Money (Statement).

If the law practice did not receive or hold trust money during the period then only Part A of the Statement is to be completed and submitted to the Society by 31 October.  An external examination is not required.

If the law practice did receive or hold trust money during the period then Parts A and B of the Statement must be completed and submitted to the external examiner prior to the commencement of the external examination.  The external examiner must attach the statement to the external examination report for submission to the Society by 31 October.

There are two (2) versions of the Report, please use the PDF version if you wish to print and complete by hand; and the Word version if you wish to complete on screen and then print off.

External Examiners Report (PDF Version)

External Examiners Report (Word Version)

 

A Checklist is available as a guide of the various forms of trust records maintained by a law practice and to assist in the assessment of compliance with the Legal Practitioners Act and Regulations.  There are two (2) versions of the Checklist.  Please use the PDF version if you wish to print and complete by hand; and the Word version if you wish to complete on screen and then print off.

Law Practice Checklist (PDF Version)

Law Practice Checklist (Word Version)

 

The Law Society has an Irregularity Report Form, for a Law practice/practitioner to report irregularities and suspected irregularities.

When do I need to complete this form?

As soon as practicable after a legal practitioner of a law practice becomes aware that there is an irregularity in any of the law practice’s trust account(s) or trust ledger accounts, the law practice must give written notice of the irregularity to the Society (clause 24 of Schedule 2 of the Legal Practitioners Act 1981).

Clause 24 also applies where a legal practitioner believes on reasonable grounds that then is an irregularity in connection with the receipt, recording or disbursement of any trust money received by a law practice of which the practitioner is not a legal practitioner associate.  The practitioner must report the irregularity to the Society as soon as practicable after he or she forms the belief an irregularity has occurred.  

A practitioner is not excused from reporting the irregularity on the ground that giving the notice may tend to incriminate another practitioner.

Please note that serious irregularities including misappropriation, fraud, theft of trust funds, placing a trust account ledger or trust bank account into a deficit or overdraw position, may need immediate action and must be reported immediately to the Society by contacting Ethics and Practice on 8229 0229 or sending an email to ethicsandpractice@lawsocietysa.asn.au.

Commence Form
The combined trust account (CTA) is a statutory pooled account maintained at the head office of each approved bank.  Section 53 of the Legal Practitioners Act 1981 (Act) provides that twice each year, within 14 days after 31 May and 30 November money must be deposited from each law practice’s general trust account into the CTA.

The amount of the required deposit is calculated by means of a formula provided in the Act. Members can use the Law Society Combined Trust Account Calculator to assist in calculating the required deposit by clicking on the button below.
 
A deposit is not required if the lowest aggregate balance during the calculation period is less than $10,000; or if it is known that the funds will be required to meet an immediate claim, or maintain a reasonable balance.

If the required deposit amount is to be withheld, a written notice of withholding must be submitted to the Society by 14 June or 14 December.  The notice of withholding must be submitted online by clicking on the button below.

If the law practice fails to make the required deposit by the due date, or fails to provide a written notice of withholding it may be liable to pay interest on the outstanding amount, calculated at the prescribed rate for the period of default.

For further information, please refer to section 53 of the Act and the Society’s trust account handbook.
 
CTA Calculator (Members Only)         Notice of Withholding

 


The LSSA Trust Accounting system is an online trust recording system designed for you to use anywhere, anytime.


Key Features

  • 24/7 Secure online website access with daily back up of data

  • As easy to use as Internet Banking

  • No software installation

  • Free Help Desk access and online manual

  • Compliant with the South Australian Legal Practitioners Act 1981 and Legal Practitioners Regulations 2014

  • Quick and easy Bank Reconciliation feature

  • Quick and easy access to reports, client contact, management of receipts, payments and transfers. 

  • Read only access for an External Examiner (Auditor) 

  • Up to 20 users per law practice with two types of access (Read & Record or Read only)

  • Free updates to system completed automatically


The Trust Account Online portal can be accessed through https://ta.lawsocietysa.asn.au/. Application forms, software demos and training videos can be downloaded directly from the Trust Accounting Online page.

Please contact Ethics and Practice on 82290229 or send an email to 
ethicsandpractice@lawsocietysa.asn.au with any queries.

Other Software Providers

A list of other software providers can be accessed here.  Please note that the Society has not specifically reviewed any of the software packages listed below for compliance, no can we recommend any particular package.  The suppliers listed are those who assert that their software is compliant.

The Society recommends that a compliance checklist is forwarded to a potential supplier for completion.  A copy of the checklist can be accessed here.

The Law Society Trust Account Handbook is a comprehensive and easy to understand guide to the statutory trust accounting requirements contained in the Legal Practitioners Act 1981 and the Legal Practitioners Regulations 2014. It is of relevance to all personnel, both legal and non-legal, engaged in the handling of trust money received by a law practice, and provides step by step instructions on all of the relevant statutory provisions. You can purchase an electronic version of the Handbook for $44 and a hard copy version for $66.  Please contact Ethics and Practice on 82290229 or send an email to ethicsandpractice@lawsocietysa.asn.au to order your copy. Law Society Members can purchase the electronic handbook online and receive instant access by clicking here.
The Law Society Trust Account Receipt Book provides law practices who receive trust money with trust account receipts that specifically comply with the trust account receipting requirements in Legal Practitioners Act 1981 and the Legal Practitioners Regulations 2014. You can purchase a book of 200 receipts for $44. Please contact Ethics and Practice on 82290229 or send an email to ethicsandpractice@lawsocietysa.asn.au to order. Law Society Members can order receipt books online by clicking here.
Agent Deposits View 
Combined Trust Account View
Withdrawing Trust Money for Legal Costs
(Regulation 45 of the Legal Practitioners Regulations 2014)
View
Designated Persons Criteria, Conditions and Protocol View
Payment of Court Fees by Credit/Debit Card View
Intra-Firm Transfers Between General trust Accounts View 
Payment of Money from Trust - Authority Required for Paying Disbursements   View 
Receiving payments from the Legal Services Commission View
Receiving payments from Return to Work SA and its agents View
Regulation 56 Legal Practitioners Regulations 2014 Exemptions View

Click here to be directed to the Forms Page to access the Trust Account Forms and Notifications

If you require assistance in relation to applying the trust accounting requirements, the Society holds regular Trust Accounting Courses.  For information about those courses, click here

If you or your practice (in any form) receives trust money that is required to be deposited in a trust account, you must establish and maintain a general trust account in this jurisdiction with an approved authorised deposit-taking institution (ADI).  The account type must be a Statutory Trust Account and the ADIs currently approved are:

  • Adelaide & Bendigo Bank
  • Australia & New Zealand Bank
  • BankSA
  • Commonwealth Bank
  • Macquarie Bank
  • National Australia Bank
  • Westpac

It is important to remember that there are requirements under Schedule 1 Part 2 of the Legal Practitioners Act 1981 which must be observed as well as those under the Legal Practitioners Regulations 2014.  Importantly, in accordance with regulation 19(2) the name of the trust account must contain the name of the law practice or the business name under which the law practice engages in legal practice; and the expression “law practice trust account” or “law practice trust a/c”, unless the words “law practice” already form part of the name or business name of the law practice.

A law practice holding money in trust for in excess of one year or upwards and which the person entitled cannot be found may pay those moneys to the Treasurer of the State.

The procedure is as follows:

  1. If the law practice appears to have lost contact with the client, it should make due enquiry and attempt to locate them.
  2. If the client cannot be located after due enquiry the law practice should follow the procedure set out at section 7A of the Unclaimed Moneys Act 1891 to send the money to the Treasurer of the State.

Under clause 22(1)(c) of Schedule 2 of the Act a law practice may disburse the balance of trust money held in a general trust account or controlled money account of the practice for a person after deducting any legal costs properly owing to the practice, in accordance with the Unclaimed Moneys Act 1891.

A signed statutory declaration must accompany the payment of unclaimed moneys.

A law practice cannot charge for the cost of processing unclaimed moneys.

What is electronic conveyancing?

The term ‘electronic conveyancing’ refers to a conveyancing transaction where practitioners have elected to settle electronically through the electronic platform provided by Property Exchange Australia Limited (PEXA). The representatives of the parties and their financiers participate in an electronic workspace, where:

  • registry instruments are prepared and electronically signed (transfer, mortgage, discharge/release of mortgage);
  • duty may be paid as a settlement disbursement;
  • the balance of the purchase money and its disbursement are agreed;
  • the documents to be lodged for registration are checked pre-settlement at the Lands Titles Office (LTO);
  • at the agreed settlement date and time, provided the documents are in order for registration, the balance of purchase money is paid and proceeds of settlement are disbursed; and
  • the relevant registry instruments are electronically lodged for registration (which usually follows that same day).

Electronic conveyancing does not cover the whole of the conveyancing transaction; just the preparation for and execution of settlement and registration. In relation to the settlement itself, the platform is essentially a virtual settlement room.


The regulatory framework

The principal legislation is the Real Property (Electronic Conveyancing) Amendment Bill 2015 amending the Real Property Act 1886 (SA). The amending Act and the launch of Electronic Conveyancing in South Australia will commence on Monday, 4 July 2016. See below for more information.

The further piece of legislation is the Electronic Conveyancing National Law (South Australia) Act 2003.

Two sets of Rules have been made pursuant to the ECNL:

  • the Model Participation Rules (MPR), which govern the relationship between the electronic lodgement network operator (ELNO) and participants in the system, such as lawyers; and
  • the Model Operating Requirements (MOR),  which govern the relationship between the ELNO and the land title registries.
  • The activities and responsibilities of lawyers choosing to use electronic conveyancing are primarily governed by the ECNL and the MPR, but it should be noted that further refinements of the MPR and MOR are continuing.

Once adopted by a particular jurisdiction, the MPR and the MOR become the Participation Rules, and the Operating Requirements, respectively. Not all jurisdictions have the same version of these requirements and rules operating at the same time - it depends upon the system readiness, the timing of the PEXA roll-out in that jurisdiction and the process of adoption in that jurisdiction.

In SA, version 4 of both MPR and the MOR have been adopted by the SA Registrar-General and commenced operation on 27 May 2017.


Guidelines

Guideline for legal practitioners - Electronic conveyancing and what it means for your trust account and law practice, click here.


Standard Property Documents

Click here to access or find more information about the Standard Property Documents.

Property Exchange Australia (PEXA)

What is PEXA? PEXA is a property exchange network that allows secure, online lodgement and Financial Settlement
How PEXA works 
Click here for PEXA registration

 

Verification of Identity (VOI)

VOI Guidelines
Australia Post
Lands Title Office VOI checks in NSW
ID Secure
Zip ID 
VOI Australia


Verification of Authority (VOA)

Please refer here for further information and the updated Verification of Authority Guidelines.

Client Authorisation

Please refer here for further information on Client Authorisation.

Useful Links

Australian Institute of Conveyancers (SA)
Australian Registrars National Electronic Conveyancing Council (ARNECC)
Model Operating Requirements (MOR)
Model Operating Requirements Guidance Notes
Model Participation Rules (MPR)
Model Participation Rules Guidance Notes
Property Exchange Australia Ltd (PEXA)

Please contact Ethics and Practice on 82290229 or send an email to ethicsandpractice@lawsocietysa.asn.au with any queries.