![]() Lax approval and review process – Insufficient oversight can lead to many issues, including those mentioned above.This may come in the form of disbursing fees from the trust account before they are earned, borrowing from client funds with the intention of repaying, as well as outright theft. Improper authorizations for trust disbursements - Not requiring adequate authorization leaves the door open for improper “borrowing” from trust accounts.Additionally, the sub-ledger balances need to agree to the general ledger balances, and individual trust ledger balances should be reviewed on a regular basis to identify unusual or stale items. Lack of timeliness in performing trust account reconciliations – Reconciliation of each trust bank account needs to be performed on a timely basis.It’s important for attorneys to understand where to draw the line of separation and what trust accounts should and shouldn’t be used for. Comingling of client funds – Mixing trust account money with either personal funds or law firm operating funds is very problematic.Failure to properly track client funds – Not keeping separate, detailed trust ledgers for each client makes it difficult to track each client’s account balance. ![]() Some of the most common issues uncovered during trust audits include: Many attorneys don’t have a complete understanding of the numerous rules governing trust account operations and uses. Often, violations are a result of unintentional trust account mismanagement rather than malice. An assessment of your controls can help you determine whether your firm has appropriate safeguards in place to comply with your fiduciary responsibilities. An accountant or consultant with specific law firm expertise can assist you in your evaluation of your firm’s current controls over trust accounts to help you stay in compliance with this and other Florida Bar rules. The plan must also be updated whenever there are material changes, and all lawyers in the firm must be notified of any changes to the plan.įor law firms that already have written plans, this revised rule presents an excellent opportunity to revisit those plans to ensure that they are up to date, designed appropriately, are being applied consistently and meet the requirements of the revised rule.ĭraft trust account plans for small and large Florida law firms are available on The Florida Bar’s website, but you may not want to go it alone. The amended rule requires that the written trust account plan is disseminated to every lawyer in the firm, including all lawyers who join the firm subsequently. ![]() It is important to note that even if accounting or finance personnel handle these functions, their work must always be overseen by an attorney who is responsible for the trust accounts.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |