Trust Account Program
The OLR Trust Account Program has two primary goals: 1) to identify problems in the management of client trust accounts and other fiduciary accounts, and potentially, to prevent conversions from such accounts; and 2) to educate lawyers with respect to safeguarding funds and maintaining the required records. For further information, please see the Trust Account Program Annual Report  .
Overdraft reporting
Lawyers who are licensed in Wisconsin are required to authorize their financial institution, by written Agreement , to notify the Office of Lawyer Regulation of overdrafts on trust and fiduciary accounts from which they or a member or employee of their firm can disburse funds via check. The Agreement to Notify OLR of Overdrafts on Lawyer Trust Accounts and Fiduciary Accounts, along with guidelines on Proper Identification of IOLTA Trust Accounts and Proper Formatting of Trust Account Checks are found at the Agreement link above, and may also be obtained by contacting OLR’s Trust Account Program at (608) 267-7274, Ext. 2 or toll-free at (877) 315-6941, Ext. 2.
The Wisconsin Supreme Court established trust account overdraft reporting requirements in Wisconsin, effective January 1, 1999. See, SCR 20:1.15(h) [formerly SCR 20:1.15(i) – (p)]. Pursuant to SCR 20:1.15(h)(3), whenever a check is presented against a lawyer’s trust account or fiduciary account that has insufficient funds to cover that check, the financial institution must report the overdraft to OLR, regardless of whether or not the financial institution pays the check or returns it due to insufficient funds.
With respect to fiduciary accounts, the Court established limited alternatives to the overdraft reporting requirements of SCR 20:1.15(h) in SCR 20:1.15(j)(9). Those alternatives are: 1) an annual audit of the fiduciary account by an independent CPA or 2) a responsible co-signatory, such as a co-personal representative or co-trustee, for all disbursements from the fiduciary account. These alternatives do not apply to trust accounts.
In the news
Law Firm Certifications regarding trust and fiduciary accounts
SCR 20:1.15(i)(2) requires lawyers to annually certify that they are complying with trust account recordkeeping requirements. In firms where there are two or more lawyers who have no authority to oversee or manage the firm’s trust or fiduciary account(s), those lawyers may not have access to the information necessary to make the certification required under (i)(2). In such cases, pursuant to SCR 20:1.15(i)(3), the law firm must make the required certification. SCR 20:1.15(i)(3) states: “A law firm shall file one certificate on behalf of the lawyers in the firm who are required to file a certificate under SCR 20:1.15(i)(1).” To assist law firms in complying with that rule, a Law Firm Certification form is available. The rule further requires the firm to provide a copy of the Law Firm Certification to each of the firm’s lawyers. OLR recommends that the partner or partners who are responsible for overseeing the firm’s trust and fiduciary accounts sign the Law Firm Certification. Note: 1) The Law Firm Certification form should be completed and mailed to the State Bar, along with the annual dues statement. 2) Solo practitioners should not use the Law Firm Certification form, but should make their certifications on the dues statement form. 3) Out-of-state firms should not use the Law Firm Certification unless a lawyer who is licensed in Wisconsin can sign the Certification from.
Court recreates Trust Account Rule
Effective, July 1, 2007, the Wisconsin Supreme Court recreated the trust account rule, SCR 20:1.15, and amended several related rules (SCR 20:1.0 Terminology; SCR 21.16 Discipline; and SCR 12.04 Fund for Client Protection). The new Trust Account Rule includes, among other changes, an alternative to holding fee advances in trust, and a procedure that will permit lawyers to accept fee advances by credit card. There were no substantive changes to the recordkeeping requirements. See order , along with both the new trust account rule and the additions to SCR 20:1.0.
Recreated SCR 20:1.15
Additions to SCR 20:1.0
Topics of interest to lawyers
For guidance on proper handling of trust and fiduciary accounts; recordkeeping requirements; legal fees; and procedural information regarding OLR’s Trust Account Program, including overdraft investigations, please use the following links:
Practice tips
For guidance on dealing with common trust account problems that occur in certain specialized practice areas, including bankruptcy, real estate, and personal injury, please use the following links (all in Adobe PDF format):
Management of a trust account
OLR has created a Trust Account Manual that provides basic information on proper recordkeeping, including a transaction register, sample ledger pages, and guidelines on handling the monthly reconciliations.
Education
Upcoming seminars on trust account management and the 2007 trust account rule:
Trust Account Management Seminar - October 17, 2008, Milwaukee
Trust Account Management Seminar - October 24, 2008, Madison
Contact Mary Hoeft Smith, Trust Account Program Administrator, for further information. Telephone: (877) 315-6941, Ext. 2; e-mail: mary.hoeftsmith@wicourts.gov
Resources
Ethics opinions and published articles on trust account issues
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