The new trust accounting Model Rule restricts the use of lawyers’ trust accounts to purposes directly connected to the provision of legal services. This rule helps to prevent the misuse of trust accounts for money laundering.

A number of law societies already have such rules, including Alberta.

Refer to the Guidance document for more detailed information.

Representative Capacity Rule Amendments

The Model Rules, and Alberta’s existing Trust Safety Rules, prevent lawyers from using trust accounts for purposes unrelated to the provision of legal services. In Alberta, however, our existing Rules allow lawyers to hold funds in a representative capacity, permitting them to act as trustees when they do not render legal services.

Holding funds solely as a trustee or fiduciary is a permitted exception to the Rule that requires lawyers to only hold trust funds that are related to legal services.

Lawyers are often asked to act as trustees in a variety of settings, simply because they are lawyers. The role of trustee is considered ancillary to legal practice. When holding funds in a representative capacity, the lawyer must establish a separate trustee account and may not deposit the funds in the firm’s trust account. Firms are obliged to report the existence of the trustee account to Trust Safety and are obliged to provide financial reporting to the Law Society.

Refer to the Guidance document for more detailed information.