Receiving Trust Money
When you receive money in trust for a client, you must deposit it in your trust account ‘forthwith’, but no later than the first banking day after you received the money. You should anticipate that you may receive funds in cash, by cheque, bank drafts or money orders, electronic transfers, and credit and debit card payments. See section 3 of the Rules – Deposits in Trust Accounts for details regarding the money you must deposit in your trust account, that you are not obligated to pay into a trust account, and money you shall not pay into a trust account.
Each time you receive trust money you will record the receipt in your records in accordance with section 2 of the Rules. For each amount received, you will record the date, the source and form of the trust money, and the client’s identity. In addition to this, lawyers must keep trust ledgers that show the amount of money they receive and disburse on behalf of each client individually. This will allow you to keep track of the amount you have on hand for each client separately.
Accepting Cash
Receiving cash from clients leads to additional considerations. Any cash that you accept from a client is subject to the Rules on Cash Transactions. According to section 2 of these Rules, you may not receive or accept cash in an aggregate amount greater than $7,500.00 Canadian dollars in respect of any one client matter. This rule does not apply if you receive cash in connection with the provision of legal services by you or your firm:
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from a financial institution or public body;
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from a peace officer, law enforcement agency, or other agent of the Crown acting in his or her official capacity;
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to pay a fine, penalty or bail; or
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if the cash is received for professional fees, disbursements, or expenses provided that any refund out of such receipts is also made in cash.
In addition to your bookkeeping obligations under the Uniform Trust Account Rules, each time you receive cash from a client, you must maintain and record the following information in a book of duplicate receipts:
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the date the cash is received;
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the name of the person who gave you the cash;
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the amount of cash you received;
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the file number associated with the receipt of cash;
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the signature of the person from whom you received cash; and,
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your signature, or the signature of a person authorized by you to receive the cash.
See section 7 of the Rules on Cash Transactions for more information.
Remember that you have no obligation to accept cash. If you are presented with cash and are uncomfortable with the situation, it may be wise to ask your client to deposit the cash in the bank and to bring you a certified cheque or a bank draft.