Legal Services Board
Trust accounts
The Legal Profession Regulations 2005 (Vic) (“the regulations”) set out how to operate a trust account, including requirements in relation to the keeping of trust records. Every practice or clerk maintaining a trust account should be familiar with the trust account regulations, i.e. Part 3.3 of the regulations.
See the regulations on the Victorian legislation website.
Where can trust accounts be opened?
The Board has made arrangements with the following approved deposit-taking institutions enabling solicitors’ trust accounts to be operated at any branch of:
- ANZ Bank
- Bank of Queensland
- BankWest
- Bendigo Bank (and related Community Banks)
- Commonwealth Bank
- Macquarie Bank
- National Australia Bank
- St George Bank
- Westpac.
The regulations provide that if a trust account is opened after 12 December 2005, the trust account name must include:
- 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”.
For an approved clerk, substitute ‘approved clerk’ for ‘law practice’.
Banks must report daily to the Board on the total deposits, withdrawals and the balance of all trust accounts.
The interest earned on solicitors’ trust accounts is paid into the Public Purpose Fund, administered by the Board. If you become aware that interest is being paid into your account, you must contact your bank immediately.
Opening a trust account
In order to facilitate the correct opening of trust accounts, please download the instructions for your chosen bank and take to the branch.
| Bank | Instructions for opening new trust accounts |
|---|---|
| ANZ Bank | Information about opening a Statutory Trust Account with ANZ |
| Bank of Queensland | Information about opening a VIC Solicitor Trust Account with BOQ |
| BankWest | To open a General Trust Account, please contact our Cash Management & Transactional Solutions Team on 03 9641 2777 |
| Bendigo Bank (and related Community Banks) | Please contact your local branch or refer to the Bendigo Bank website |
| Commonwealth Bank |
Information about opening a VIC Solicitor Trust Account with Commonwealth Bank (44KB PDF) or call 1800 020 306 Download the Authority for Non Personal Accounts (Required) (305KB PDF) Download the Netbank Application (Complete this if you do not have NetBank) (105KB PDF) Download the Terms and Conditions for Business Cheque and Savings Accounts (310KB PDF) |
| Macquarie Bank | Please contact one of Macquarie’s Legal Industry specialists on (03) 9635 9567 or email depositservices@macquarie.com for details on how to open a trust account. For further information on how our services may benefit your law firm please visit the Macquarie Bank website |
| National Australia Bank | Download the NAB Statutory Trust Account Opening Form |
| St George Bank | Information about opening a Statutory Trust Account with St George Bank |
| Westpac | Refer to the Westpac website for general procedures to open a Statutory Trust Account - Solicitors with Westpac. Practitioners are also required to take the “Intention to Open Statutory Trust Account(s)” form to the branch when opening a Trust Account. Download the Intention to Open Statutory Trust Account(s) form (PDF) |
Notifying the Board
A law practice or an approved clerk must notify the Board of the following:
Opening a trust account
within 14 days of establishing a trust account in Victoria, a law practice or an approved clerk must notify the Board of the account number and name and address of the branch of the approved deposit taking institution ; download FORM TRUST 8 below.
Changing details of trust account
any changes to trust account information must be notified to the Board within 14 days of becoming aware of the changes; download FORM TRUST 8 below; and
Closing a trust account
within 14 days after closing a trust account in Victoria, a law practice or an approved clerk must notify the Board of the closure; download FORM TRUST 8 below.
Deficiency in a trust account
An Australian legal practitioner or an approved clerk is guilty of an offence if he or she without reasonable excuse, causes:
- a deficiency in any trust account or trust ledger account; or
- a failure to pay or deliver any trust money.
These are serious offences carrying a maximum penalty of 4 years imprisonment.
With respect to a trust irregularity, a legal practitioner must:
- as soon as practicable after a legal practitioner associate (includes partners, directors, employees and consultants) of a law practice becomes aware that there is an irregularity in the law practice’s trust accounts or trust ledger accounts, the associate must given written notice of the irregularity to the Board and a corresponding authority (if a corresponding authority is responsible for the regulation of the account concerned); and
- if an Australian legal practitioner believes on reasonable grounds that there 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 as soon as practicable after forming the belief give written notice of it to the Board and a corresponding authority (if a corresponding authority is responsible for the regulation of the account concerned).
An approved clerk must:
- as soon as practicable after they become aware that there is an irregularity in any of his or her accounts or trust ledger accounts, give written notice of the irregularity to the Board;
- if they believe on reasonable grounds that there is a deficiency in a trust account of another approved clerk, report it to the Board as soon as practicable after forming the belief; and
- if they believe on reasonable grounds that there is an irregularity in a trust account or a trust ledger account of a law practice, report the irregularity to the Board as soon as practicable after forming the belief.
There are heavy penalties in the Legal Profession Act 2004 (Vic) (“the Act”) for failing to comply with these provisions. Please see s 3.3.22 of the Act for further information.
Fees charged on trust accounts
The following fee arrangements will apply for the approved Banks:
- All banks agree not to charge administrative or account keeping fees
- Banks’ approaches to charging other fees are outlined below:
| Bank | Fees for Regular Transactions (for example deposits, cheques written, cheques in deposit etc) |
Fees for ad hoc services (for example overseas transactions, dishonours, stop cheques, voucher retrieval/tracing etc) |
|---|---|---|
| ANZ Bank | Yes* | Yes* |
| Bank of Queensland | Yes* | Yes* |
| BankWest | Yes* | Yes* |
| Bendigo Bank (and related Community Banks) |
Yes* | Yes* |
| Commonwealth Bank | Yes* | Yes* |
| Macquarie Bank | Yes* | Yes* |
| National Australia Bank | No | Yes* |
| St George Bank | Yes* | Yes* |
| Westpac | Yes* | Yes* |
| * May charge fees unless otherwise negotiated. | ||
For further information on fees, please contact the bank (see below):
| Bank | Contact Details |
|---|---|
| ANZ Bank | Please contact your ANZ Business Banking Manager or visit the ANZ website |
| Bank of Queensland | For more information about fees and charges, please visit the BOQ website |
| BankWest | Please contact our BankWest Customer Help Centre on 13 17 18 |
| Bendigo Bank (and related Community Banks) |
Please contact your local Branch Manager |
| Commonwealth Bank | Premium Service Centre Institutional Banking Government and Financial Institutions Client Service Phone: 1800 020 306 Fax: 1300 135 663 Email: ibgovt@cba.com.au |
| Macquarie Bank | Please contact one of Macquarie’s Legal Industry specialists on (03) 9635 9567 or visit the Macquarie Bank website for further information on how our services may benefit your law firm |
| National Australia Bank | For more information about fees and charges, please visit the NAB website or call us on 13 10 12 |
| St George Bank | For more information about fees and charges, please visit the St George Bank website |
| Westpac | For more information about fees and charges, please visit the Westpac website or call 132 142 |
Foreign currency trust accounts
Foreign currency trust accounts are not available at this time.
Exemptions from trust regulations
The Board may exempt a law practice or an approved clerk from complying with any of the provisions of Part 3.3 of the regulations, relating to trust money and trust accounts.
Download the Trust Account Regulations Exemptions Policy (40KB PDF)
If, on behalf of a law practice, you wish to apply for an exemption from specific trust regulations, you should apply in writing to the Board.
Please note that, in considering an application for exemption, the Board will take into account any adverse material known about the applicant practice and/or its principals after consultation with the relevant professional association and the Legal Services Commissioner.
An application should include consent to disclosure to the Board of information held by the Legal Services Commissioner, the professional associations and any former or current supervisor, receiver or manager of the practice. Each principal of the practice should complete a consent form.
Download the Consent form to disclosure to the Board of information held by the Legal Services Commissioner (12KB PDF)
Approved external examiners (trust auditing)
Law practices and approved clerks who are required to keep trust records must have those records examined by an approved external examiner (“AEE”) in each audit year. The audit year runs from 1 November – 31 October.
For the purposes of the examination, a law practice or approved clerk must produce to the AEE their accounting or other records relating to the affairs of the practice or clerk, or give the AEE any other information he or she reasonably requires.
There are heavy penalties for failing to comply with these requirements.
The Act sets out the criteria that a person must meet before they may be an AEE. This includes that the person must have completed or substantially assisted in carrying out the examination of the trust records of at least two law practices in any of the last three audit years. A person may be exempted from this requirement.
A law practice or approved clerk is required to appoint an AEE within one month after receiving trust money (other than transit money).
A law practice or approved clerk must notify the Board of the apointment of their AEE using FORM TRUST 8. The AEE must also complete the consent to appointment as an AEE using FORM TRUST 3. These notifications must be supplied to the Board within 14 days of appointing an AEE.
Please note that it is the responsibility of a law practice, not an AEE to lodge the forms with the Board.
Termination of an AEE
A law practice or an approved clerk must terminate the appointment of an approved external examiner if:
- the examiner is disqualified under regulation 3.3.43 from examining the trust records of the practice or clerk; or
- under regulation 3.3.42(2) the Board requires the practice or clerk to terminate the appointment.
In other circumstances, a law practice or an approved clerk may terminate the appointment of an approved external examiner only with the prior approval of the Board. The Board may give approval if satisfied that it is reasonable in the circumstances for the practice or clerk to terminate the appointment. The Board may require the law practice or approved clerk to supply any evidence the Board requires in order to be satisfied.
A law practice or an approved clerk must notify the Board of the termination of the appointment of an approved external examiner within 14 days after the termination in the approved form. Use FORM TRUST 8 below.
The requirements in each audit year
- Law practices that, or approved clerks who, did not hold trust money, must lodge a Statutory Declaration in the form prescribed by the regulations. This must be lodged with the Board by 30 November. Download Statutory Declaration if trust money not held, below.
- Law practices that, or approved clerks who, did hold trust money, must lodge a Statement of Trust Money with their AEE and the Board by 30 November. Download FORM TRUST 5, below.
The AEE must then prepare an examination report and certificate, together with a certified and signed copy of the statement of trust money. These must be returned to the practice or approved clerk by 15 February. The practice or approved clerk must then lodge the report of the external examination with the Board by 28 February. Download FORM TRUST 6, below.
The Act imposes heavy penalties for failing to comply with these requirements.
Examination on ceasing to be authorised to receive trust money
Law practices and approved clerks who cease to be authorised to receive trust money must also have their trust records examined by an AEE in respect of the period from the end of the preceding audit year until the date of ceasing to be authorised to receive trust money. These law practices and approved clerks must also lodge examination reports in respect of each audit year and any remaining period during which they continue to hold trust money. These must be lodged with the Board within 60 days after the end of the period to which the examination relates.
The Act imposes heavy penalties for failing to comply with this requirement.
AEE – exemptions from having minimum trust examinations
The Board may exempt a person from the requirement that they have completed or substantially assisted in carrying out the examination of the trust records of at least 2 law practices or approved clerks in respect of any of the previous 3 audit years, in order to be approved as an external examiner. Applications for exemption can be made by writing to the Board. Download the Board’s policy in relation to applications for exemption from s3.3.51(1)(e) of the Act, below.
Trust account investigations
The Legal Services Board has a wide range of regulatory functions, one of which is to ensure the adequate management of trust accounts including the administration and management of legal practitioners’ trust accounts.
One part of this function is trust account investigations which consist of inspectors conducting law practice trust account investigations under Part 3.3 of the Legal Profession Act 2004 (the Act). This function has been delegated to the Law Institute of Victoria (LIV).
As at April 2009, there were 6,209 registered legal entities in Victoria. Of these 1,584 law practices operate trust accounts. A further 402 legal practitioners have trust account authorisation and are required to lodge statutory declarations that they have not received trust money in the year ending 28 February 2009.
All other registered legal entities are also considered for inclusion in the investigation program to monitor compliance with regulations governing the operation of law practice trust accounts or determining whether or not a law practice has contravened the relevant part of the Act or regulations.
The 2009-2010 program seeks to better understand the risk profile and demographics assessment which may then provide valuable insight to develop an investigation cycle. Particular emphasis will be placed on increasing the quality and accountability of external examiners reporting on their examination of trust records.
Trust account forms
- FORM TRUST 1 Controlled money register (12KB PDF)
- FORM TRUST 2 Controlled money register, no EFT (12KB PDF)
- FORM TRUST 3 Consent to Appointment as External Examiner (41KB PDF)
- FORM TRUST 4 Investment Money (12KB PDF)
- FORM TRUST 5 Statement of trust money – clerks (68KB Word)
- FORM TRUST 5 Statement of trust money – law practice (91KB Word)
- FORM TRUST 6 Annual report of Trust records examination - approved clerk (84KB Word)
- FORM TRUST 6 Approved external examiner's report - Law Practice (59KB PDF)
- FORM TRUST 7 Approved external examiner's report - when a law practice ceases (59KB PDF)
- FORM TRUST 8 Notification of Trust Account details (opening, closing and changing details) including appointment and termination of AEE (84KB PDF)
- FORM TRUST B1 Statutory Declaration on ceasing to hold trust money - law practice (96KB PDF)
- Statutory Declaration if Trust Money not held - law practice (96KB PDF)
- Policy – Application By External Auditors For Exemption From Requirement To Have Examined Trust Records (27KB PDF)
- Consent form to Disclosure to the Board of Information held by LSC (12KB PDF)
- Trust Account Regulations Exemptions Policy (40KB PDF)
- Information sheet - Transferring funds from your Statutory Deposit Account to your Trust Account (22KB PDF)