Community Legal Services of Community Legal Services of Mid- - - PowerPoint PPT Presentation

Community Legal Services of Community Legal Services of Mid Mid-

• Florida, INC.

Florida, INC.

Client Trust Account Policies Client Trust Account Policies and Procedures and Procedures

Introduction/ Agenda Introduction/ Agenda

Review of Florida Bar Requirements Review of Florida Bar Requirements Review Client Trust Account Policies Review Client Trust Account Policies Review Client Trust Account Procedures Review Client Trust Account Procedures Review how to implement the order in Review how to implement the order in which all Client Trust Account policies and which all Client Trust Account policies and procedures are to be followed. procedures are to be followed. Review all forms related to the Client’s Review all forms related to the Client’s Trust Accounts Trust Accounts

Client Trust Account Client Trust Account Florida Bar Regulations Florida Bar Regulations

The Rules of Professional Conduct The Rules of Professional Conduct make it mandatory for every law firm make it mandatory for every law firm in the State of Florida to maintain a in the State of Florida to maintain a trust bank account as a depository for trust bank account as a depository for clients’ funds and establish the clients’ funds and establish the Attorney's duties and responsibilities Attorney's duties and responsibilities in handling clients’ trust funds. in handling clients’ trust funds.

Client Trust Account Client Trust Account Florida Bar Regulations cont. Florida Bar Regulations cont.

It is the responsibility of the It is the responsibility of the Individual Individual Attorney Attorney to be familiar with the rules. to be familiar with the rules. The rules can be found on the internet at The rules can be found on the internet at www.flabar.org www.flabar.org. When there, click on the . When there, click on the Regulations tab then click on the Rules Regulations tab then click on the Rules Regulating The Florida Bar tab. All of the Regulating The Florida Bar tab. All of the information on trust accounts is in chapter information on trust accounts is in chapter 5 5

5-1.1 Trust Accounts 5-1-2 Trust Accounting Record and Procedures

Client Trust Account Client Trust Account Florida Bar Regulations cont. Florida Bar Regulations cont.

There are numerous rules governing trust There are numerous rules governing trust accounts. accounts. All of the rules require strict compliance. All of the rules require strict compliance. Penalties for non Penalties for non-

• compliance are severe and may

compliance are severe and may lead to disbarment. lead to disbarment. Maintenance of clear and concise records is Maintenance of clear and concise records is mandatory. mandatory. Each offices’ trust account ledger must be Each offices’ trust account ledger must be balanced monthly and is subject to an internal balanced monthly and is subject to an internal audit by the Comptroller at any time. audit by the Comptroller at any time. Administration will reconcile the trust account Administration will reconcile the trust account monthly. monthly.

CLSMF Client Trust Account CLSMF Client Trust Account Policies cont. Policies cont.

The Attorney of Record will be responsible for The Attorney of Record will be responsible for receiving all funds, requesting disbursements, receiving all funds, requesting disbursements, and refunds to the client when the case is closed and refunds to the client when the case is closed

• r completed.
• r completed.

The disbursements and refunds need to be The disbursements and refunds need to be handled as soon as possible. If after 7 years all handled as soon as possible. If after 7 years all attempts have been made to return the monies attempts have been made to return the monies to the client the balance will be escheated to the to the client the balance will be escheated to the State of Florida according to the laws of State of Florida according to the laws of Unclaimed Property. Unclaimed Property.

CLSMF Client Trust Fund Policy and Procedure

CLSMF Client Trust Account CLSMF Client Trust Account Policies cont. Policies cont.

Each CLSMF law office has access to the CTA and must Each CLSMF law office has access to the CTA and must follow all policies and procedures to ensure segregation follow all policies and procedures to ensure segregation

• f each client’s funds from other funds.
• f each client’s funds from other funds.

The CLSMF Board of Directors authorizes the CTA and The CLSMF Board of Directors authorizes the CTA and appropriate signatories on the account. appropriate signatories on the account. The Managing Attorney of each office will designate a The Managing Attorney of each office will designate a Custodian to keep all checkbooks, deposit books, receipt Custodian to keep all checkbooks, deposit books, receipt books, client ledger sheets notebooks, and endorsement books, client ledger sheets notebooks, and endorsement stamp. stamp. All of the above mentioned materials need to be locked All of the above mentioned materials need to be locked at all times. at all times.

CLSMF Client Trust Account CLSMF Client Trust Account Policies cont. Policies cont.

Using funds of one client for another client is strictly Using funds of one client for another client is strictly forbidden forbidden. . All client trust funds must remain separate from all other All client trust funds must remain separate from all other funds. funds. All funds need to be deposited and cleared before All funds need to be deposited and cleared before disbursements can be made. Generally 10 business disbursements can be made. Generally 10 business days for a personal check. days for a personal check. If disbursements need to be made before the personal If disbursements need to be made before the personal check will clear, the client will then need to make another check will clear, the client will then need to make another form of payment (i.e. cash, money order, certified form of payment (i.e. cash, money order, certified check). check).

Client Ledger Sheets Client Ledger Sheets

Create Notebook Titled “Clients Ledgers Sheets – Open Cases” Keep all forms # 1010-T in the notebook

CLI ENT LEDGER SHEETS

End Use form # 1010-T (Client Ledger Sheet) One for each client

Client Name Address File Number Case Number Attorney

DISBURSE- M E N T REQUEST NO.

DATE

($ OUT) Debit ($ IN) Credit Balance Please create a form for each client and fill in information for each transaction and file in a "Client Ledger Sheets - Open Cases" notebook. When the case is closed, please move the client's ledger sheet to a "Client Ledger Sheets - Closed Cases" notebook.

Community Legal Services of Mid-Florida, Inc.

CLIENT LEDGER SHEET

CLIENT'S TRUST FUNDS

DESCRIPTION

Form 1010-T

Trust Account Deposits Trust Account Deposits

When an client submits funds for deposit the following procedures need to be followed.

TRUST ACCOUNT DEPOSI TS (Money Reception)

Form # 1009-T (Receipt of Funds & Authorization to Deposit/ Release Funds I nto/ From Client Trust Account)

• Clear information
• Client’s Signature
• Attorney’s approval and signature

Give Copy 1 form # 1009-T to Client Give to the Custodian:

• 1. Funds
• 2. Copy # 2 form # 1009-T
• 3. If cash, copy # 2

Cash Receipt Copy of the Funds End Place in the Client’s file:

• 1. Original form # 1009-T
• 2. Copy of the Funds
• 3. If cash, copy # 1 Cash

Receipt Copy # 2 form # 1009-T Copy # 1 form # 1009-T Prepare Cash Receipt (Retain carbonless second copy in the Receipt Book) Give Original Cash Receipt to Client If Cash Copy # 2 Cash Receipt Copy # 1 Cash Receipt

YES

I, , hereby authorize Community Legal Services of Mid-Florida to deposit ($ ) into my Client Trust Account and to release funds from my account on my behalf.

Check Appropriate Boxes: Cash

$

Money Order

$

Date

Personal Check

$

Cashier's Check

$

Certified Check

$

Date

Additional Comments:

Community Legal Services of Mid-Florida, Inc.

• r Managing Attorney

Approval by Attorney of Record

Office #

Case # File # Client Signature

INTO/FROM CLIENT TRUST ACCOUNT AUTHORIZATION TO DEPOSIT/RELEASE FUNDS RECEIPT OF FUNDS AND

OFFICE NUMBERS 01-Orange (Orlando) 02-Lake (Tavares) 03-Osceola (Kissimmee) 04-Volusia (Daytona)

Form 1009-T

Trust Account Deposits 2 Trust Account Deposits 2

TRUST ACCOUNT DEPOSI TS (Custodian)

Custodian should receive:

• 1. Funds
• 2. Copy # 2 form # 1009-T
• 3. Copy # 2 Cash Receipt (if cash)

Form # 1010-T (Client Ledger Sheet)

Enter amount of check as ($ I N) credit Fill in other information Stamp CLSMF’s endorsement Keep in a Daytona Admin Envelope:

• 1. Copy # 2 Cash Receipt (if applicable)
• 2. Copy # 2 form # 1009-T

Complete bank’s deposit slip and make deposit in local SunTrust Bank (Acc. Num.: 100019888980) in the same day or the next business day * Lock up funds at all times * Attach bank receipt to the carbonless copy in the Deposit Book

Form # 1011-T (Trust Account Transaction Log)

Post Transaction Follow procedure under:

MONTHLY BANK RECONCI LI ATI ON

at the end of the month End If Check

YES NO

Month: , 2004 Office #: Date :

Custodian Name DATE CLIENT NO. OR CASE NO. CLIENT INITIALS PAYEE CHECK NO. CHECK AMOUNT DEPOSIT RECEIPT NO. DEPOSIT AMOUNT DEPOSIT RECEIPT NO. DEPOSIT AMOUNT

Community Legal Services of Mid-Florida, Inc. Trust Account Transaction Log

Please complete the following information taken from your trust account checkbook stubs and submit to the Daytona Admin office no later than 10 days after the end of the previous month.

OFFICE NUMBERS 01-Orange (Orlando) 02-Lake (Tavares) 03-Osceola (Kissimmee) 04-Volusia (Daytona) 05-Brevard (Cocoa) 06-Putnam (Palatka) 07-Flagler (Palatka/Bunnell) 08-Seminole (Sanford) 09-Marion (Ocala) 10-Hernando (Brooksville) 11-Citrus (Inverness) 12-Sumter (Inverness)

Form 1011-T

CLSMF Client Trust Account CLSMF Client Trust Account Procedures (cont.) Procedures (cont.)

If the client’s check is dishonored, the If the client’s check is dishonored, the client is responsible for all fees incurred by client is responsible for all fees incurred by CLSMF. CLSMF. The acceptance of further personal checks The acceptance of further personal checks from a client whose check has been from a client whose check has been dishonored will be made on a case by dishonored will be made on a case by case basis by the Managing Attorney of case basis by the Managing Attorney of the CLSMF office where the check was the CLSMF office where the check was received. received.

CLSMF Client Trust Account CLSMF Client Trust Account Procedures cont. Procedures cont. Trust Account Disbursements Trust Account Disbursements

All check stocks must be kept under lock and key. All check stocks must be kept under lock and key. All checks are pre All checks are pre-

• numbered with specific group

numbered with specific group numbers assigned to each office. numbers assigned to each office. All checks must be accounted for including voided All checks must be accounted for including voided checks. checks. You must allow 10 business days for deposited You must allow 10 business days for deposited checks to clear before issuing disbursements from checks to clear before issuing disbursements from a CTA. a CTA. The attorney of record or the managing attorney The attorney of record or the managing attorney must authorize and approve all release of funds must authorize and approve all release of funds from a CTA by completing from #1003 from a CTA by completing from #1003-

• T (check

T (check request voucher for: trust account or litigation request voucher for: trust account or litigation account). account).

Trust Account Disbursements Trust Account Disbursements

TRUST ACCOUNT DI SBURSEMENTS

Form # 1010-T (Client Ledger Sheet)

Enter individual’s account balance Copy # 1 of check, forms and all the documents Custodian receive form # 1003-T

• 1. Prepare check ( Check memo includes Case No.

and/or Client No., and Purpose of the check) and

• 2. present to the signatory attorney for review

and signature. Attach: * Check * Form # 1003-T * Other supporting documents Copy # 2 of check, forms and all the documents Copy 1 to the Client’s File

Form # 1010-T (Client Ledger Sheet)

Enter amount of check as a DEBI T ($Out)

Form # 1011-T (Trust Account Transaction Log)

Post Transaction End End Give or mail check with original supporting documents to payee Keep in the Daytona Admin Folder * Include all voided cheks *

Form # 1003-T (Check Request Voucher)

Attorney of Record or Managing Attorney completes it authorizing release of funds Follow procedure under:

MONTHLY BANK RECONCI LI ATI ON

at the end of the month

Form 1003T

TRUST ACCOUNT

OR LITIGATION ACCOUNT

Disbursement Request No.

Case No. Client No. Date Requested Amount Requested Payable to Trust Acct. Balance Address

Office # Explanation : Date Date

Community Legal Services of Mid-Florida, Inc.

CHECK REQUEST VOUCHER FOR:

Signature of Employee Requesting Check Approval by Attorney of Record or Managing Attorney

OFFICE NUMBERS 01-Orange (Orlando) 02-Lake (Tavares) 03-Osceola (Kissimmee) 04-Volusia (Daytona) 05-Brevard (Cocoa) 06-Putnam (Palatka) 07-Flagler (Palatka/Bunnell) 08-Seminole (Sanford) 09-Marion (Ocala) 10-Hernando (Brooksville) 11-Citrus (Inverness) 12-Sumter (Inverness) 14-Reduced Fee Program 15-Court Appointments 20-Administration

FUND CODES

000 - Unrestricted 010-LSC 020 - FBF/IOTA 021 - FBF/Children's 022 - FBF/FACLA 030 - Filing Fees 040 - Title III/NEAAA 041 - Title III/Other 042 - SREC/Suwannee River 050 - HUD/FHOI-Ocala-LACCF 051 - HUD/MFHP 052 - HUD/FHOI-Alianza 060 - DOJ/VOCA-DV 061 - DOJ/VOCA-Elder Ab 070 - DCAF/VAWA-STOP 080 - FCADV - VAWA 081 - FCADV - VAWA-DOM 090 - IRS/LITC 100 - WTP 110 - United Way 130- Rental-DJJ 131-Rental-STEPS

CLSMF Client Trust Account CLSMF Client Trust Account Procedures (cont.) Procedures (cont.) Refunding Funds to Clients Refunding Funds to Clients

After a case is resolved and before the file is After a case is resolved and before the file is closed, the funds left in the client’s account must closed, the funds left in the client’s account must be disbursed or refunded to the client in a timely be disbursed or refunded to the client in a timely manner. manner. If CLSMF recovers money or back benefits on If CLSMF recovers money or back benefits on behalf of the client, litigation costs (depositions, behalf of the client, litigation costs (depositions, witness fees, long distance calls, copy charges, witness fees, long distance calls, copy charges, ect…) can be charged to the client’s trust account. ect…) can be charged to the client’s trust account. The Custodian will follow the aforementioned The Custodian will follow the aforementioned procedures for Check Disbursements and issue a procedures for Check Disbursements and issue a check to CLSMF for the litigation costs. check to CLSMF for the litigation costs. Explanation of all charges will be sent to the client Explanation of all charges will be sent to the client with a check (if applicable). with a check (if applicable).

CLSMF Client Trust Account CLSMF Client Trust Account Procedures (cont.) Procedures (cont.) Refunding Funds to Clients Refunding Funds to Clients

If a refund check to a client has not If a refund check to a client has not been cashed within one month of the been cashed within one month of the date of issue, the Custodian will make date of issue, the Custodian will make every reasonable attempt and if every reasonable attempt and if necessary search the internet to necessary search the internet to contact the client. contact the client. Procedures for lost and stolen checks Procedures for lost and stolen checks must be followed. must be followed.

Refunding Funds to Client Refunding Funds to Client

REFUNDI NG FUNDS TO CLI ENT (After a case is resolved and before the case is closed)

Litigation costs are charged to Client’s trust account. (Depositions, witness fees, long distance calls, copy charges, etc.) Follow the procedure under:

TRUST ACCOUNT DI SBURSEMENTS

Explanations of charges should be sent Custodian Contact Client Custodian notifies Administration Administration notifies Custodian when stop payment has been issued Custodian void original check

• n all forms and records

Custodian follow procedure under:

TRUST ACCOUNT DI SBURSEMENTS

and issue a new check Custodian must make any reasonable effort to contact client, including www.accurint.com If CLSMF recovers money or back benefits to the client

YES

If a refund check has not been cashed (1 month)

YES

If client cannot be located

YES

If Lost or Stolen Check

YES NO

Monthly Bank Reconciliation Monthly Bank Reconciliation

MONTHLY BANK RECONCI LI ATI ON (Each month)

Form # 1012-T (Trust Account Trial Balance)

End-of-month balances of each client (including zero balances) Mail monthly to Daytona Admin:

• 1. Form # 1012-T (Trust Account Trial Balance)
• 2. Form # 1011-T (Trust Account Transaction Log)

Must be received no later than the 5th of the following month Daytona and law offices will work together regarding outstanding checks The Monthly Reconciliation will reconcile client trust funds total to the bank statement balance

Month: Year: Date Prepared: Office # Custodian Name:

CLIENT NO. OR CASE NO. CLIENT INITIALS DATE CASE OPENED LAST ACTIVITY DATE BALANCE AT MONTH END

TOTAL AT MONTH END:

• $

Please complete the following information taken from your trust account individual client ledger sheets and submit to the Daytona Admin office no later than 10 days after the end of the previous month.

Community Legal Services of Mid-Florida, Inc. Trust Accounts Trial Balance

OFFICE NUMBERS 01-Orange (Orlando) 02-Lake (Tavares) 03-Osceola (Kissimmee) 04-Volusia (Daytona) 05-Brevard (Cocoa) 06-Putnam (Palatka) 07-Flagler (Palatka/Bunnell) 08-Seminole (Sanford) 09-Marion (Ocala) 10-Hernando (Brooksville) 11-Citrus (Inverness) 12-Sumter (Inverness)

Form 1012-T

CLSMF Client Trust Account Procedures CLSMF Client Trust Account Procedures cont. cont. Escheating Funds to the State of Florida Escheating Funds to the State of Florida

Ever year during the month of Ever year during the month of March, March, the Managing the Managing Attorney and the Custodian are responsible for reviewing Attorney and the Custodian are responsible for reviewing all client trust funds and identifying accounts that have all client trust funds and identifying accounts that have had no activity for the past year, and follow up on those had no activity for the past year, and follow up on those accounts. accounts. In accordance with the Unclaimed Property Law, In accordance with the Unclaimed Property Law, balances in clients accounts which are 7 years old or balances in clients accounts which are 7 years old or more will be escheated to the Bureau of Unclaimed more will be escheated to the Bureau of Unclaimed Property in the Department of Financial Services in the Property in the Department of Financial Services in the State of Florida. State of Florida. The Managing Attorney reports to the Comptroller any The Managing Attorney reports to the Comptroller any account that is 7 years old or more. account that is 7 years old or more. The Comptroller prepares and files form # DFS The Comptroller prepares and files form # DFS-

• UP

UP-

• 111to

111to the State of Florida before the deadline of April 30 each the State of Florida before the deadline of April 30 each year. year.

Escheating Funds to the State Escheating Funds to the State

• f Florida
• f Florida

ESCHEATI NG FUNDS TO THE STATE OF FLORI DA (Each year - March)

Managing Attorney and Trust Account Custodian

• 1. Review all client trust funds and identify

those with no activity in the past year

• 2. Follow up on those accounts

Managing Attorney reports to the Comptroller any account which is 7 years old or more Comptroller prepares and files Bureau of Unclaimed Properties Form DFS-UP-111 with the State before April 30th of each year End

End Notes End Notes

The Administration will work together with the individual The Administration will work together with the individual law offices regarding outstanding checks. law offices regarding outstanding checks. If a check is outstanding for more than one month, If a check is outstanding for more than one month, Administration will assist in the effort to contact the client Administration will assist in the effort to contact the client payee and assure the check is cashed. payee and assure the check is cashed. The Administration folder needs to be received in The Administration folder needs to be received in Daytona no later than the 5th of the following month so Daytona no later than the 5th of the following month so as to prepare the reconciliation. as to prepare the reconciliation. The monthly reconciliation will reconcile the client trust The monthly reconciliation will reconcile the client trust funds total to the bank statement balance. funds total to the bank statement balance. Journal entries are prepared and posted to the CLSMF’s Journal entries are prepared and posted to the CLSMF’s general ledger by the Administration in Daytona. general ledger by the Administration in Daytona.