A law firms trust account is a bank account held for the purpose of receiving and distributing money on behalf of a client for purposes such as the sale or purchase of property or money received in advance of providing services. A trust account is required by law for any firm that handles money on behalf of a client, to ensure that a client’s funds are held securely by a firm.
A trust account is a completely separate bank account to any other account a firm may have. All trust accounts are registered with the Victorian Legal Services Board and contain strict rules and regulations regarding the firm’s responsibilities when handling client’s money held in a trust account. There are also very strict recording and reporting requirements of a firm who hold a trust account. Additionally, firms are required to pay for yearly external audits of any trust accounts to ensure compliance with legislation for the protection of client’s funds.
A common misconception is that law firms hold onto client’s funds as long as they can to earn interest from client’s money. Trust accounts are not interest-bearing accounts and banking institutions cannot pay interest on any balance held in a trust account. Due to the strict rules and regulations of a trust account, it is not in the interest of a law firm to hold onto client’s funds longer than necessary.
If you are buying or selling a house or are needing assistance with probate matters, call Wollerman Shacklock Lawyers on 03 9707 1155, and be assured that your funds are safe and protected with us.