Practice Management

Trust Account Examinations and Closures

The Trust Account examination period is from 1 November to 31 October.

If your practising certificate authorises you to receive trust money then,

If you did not hold trust money

• You must lodge a statutory declaration (Form A1 & B1 - Legal Profession Regulations 2005 S.R No. 152/2005 - Schedule 1) to this effect
• This must be lodged with the LIV by 30 November

If you did hold trust money:

• You must lodge a copy of your Statement of Trust Money (Form 5 – refer the Legal Services Board website) with your external examiner and the Legal Services Board by November 30
• Your external examiner must prepare a report and certificate (Form 6 – refer the Legal Services Board website), together with a certified and signed copy of the statement of trust money, which must be returned to you by 15 February
• You must lodge the report of the external examination of your trust records with the LIV by 28 February.

If your law practice ceases:

• The law practice must prepare a trust account reconciliation as at the date of sale and/or retirement and a Statement of Trust Moneys (SOTM (see Form 5 above). The law practice must send a copy of the SOTM to the external examiner.
• Request the Legal Services Board to transfer the balance of money in the statutory deposit into the law practices’ trust account. When all money has been disbursed, request the bank to close the trust bank account.

Note: If all money has been disbursed, then the external examination is a final examination under section 3.3.55.

• Lodge the final examination report (Form 7) together with a statutory declaration (Form B1) with the LIV in the prescribed form within 60 days after ceasing to hold trust money

Appointment of External Examiner

Legal practitioners who operate a trust account must appoint an approved external examiner to examine their trust records.

An annual examination is not required if only transit money received is transit money. [ Section 3.3.52 (6)].

Details of approved external examiners can be obtained from Robyn Pipe of the LIV on 9607 9423 or e-mail rpipe@liv.asn.au or the Legal Services Board on 9679 8000.

Prior approval to change examiner.

An approved external examiner may resign at any time of their own choosing. However a law practice cannot unilaterally terminate the services of their external examiner. Regulation 3.3.44 provides that a law practice can terminate the services of their external examiner only with the prior approval of the Board. Requests for prior approval are made to the Law Institute’s compliance manager as function is delegated to the Law Institute.