Last updated: May 2023

Law firms occasionally hold trust funds for extended periods of time when they cannot locate the clients or other parties to whom the funds belong. A firm must maintain proper oversight, accounting, tracking and management of matters on which the firm is retaining inactive or undisbursable trust funds. It is the responsibility of the Responsible Lawyer — not the bookkeeper, paralegal, office manager or accountant — to safeguard client funds.

In certain circumstances, the Rules of the Law Society of Alberta allow firms to pay such undisbursable funds to the Law Society. Before paying the funds to the Law Society, the firm must have held the trust funds for more than two years and be unable to locate the funds’ owners despite reasonable efforts to do so (Rule 119.43 and section 117(5) of the Legal Profession Act).

Premature Requests

A request should not be submitted to the Law Society if:

• the law firm has held the funds for less than two years (client ledger cards are to be included with submission); and/or
• if the firm has not made reasonable efforts to locate and contact the owners of the funds.

When a firm submits an undisbursable trust fund request to the Law Society, the Law Society reviews the steps taken by the firm to locate and contact the funds’ owners. The Law Society may request further information about the firm’s efforts in this regard.

Where the Law Society determines that the information in the request is insufficient, or the law firm has not made reasonable efforts to locate the owners and distribute the funds to them, the Law Society will reject the request.

Reasonable Efforts

Reasonable efforts may include the law firm using one or more of the following approaches to locate the owners of undisbursable trust funds:

• Internet (e.g. Google) or social media search (e.g. Facebook, Instagram, LinkedIn, Twitter)
• written correspondence (e.g. mail or courier)
• email correspondence
• speak to other individuals with information (keep in mind client confidentiality)
• retain a private investigator or process server
• search public records (e.g. obituaries and death notices, court searches, land titles, personal property registries, corporate registries)

Simply sending the returned cheque or stale-dated cheque back to the client’s last known address is insufficient and does not constitute reasonable efforts.

The law firm should document the efforts it took to locate the funds’ owners and submit that documentation to the Law Society with the appropriate form provided below.

If the law firm incurs reasonable expenses in locating and contacting the funds’ owner, it may render an account and apply it against the trust funds. The expenses incurred should be commensurate with the value of the funds held in trust.

Submitting a Request

Firms must submit a form to the Trust Safety department to obtain approval to remit funds to the Law Society.

The appropriate form depends on the amount being remitted.

Amount Under $50

For amounts under $50, firms must complete the Undisbursable Trust Money – Short Form and send it to the Trust Safety department via email.

Amount Over $50

For amounts over $50, firms must complete the Undisbursable Trust Money – Long Form and send it to the Trust Safety department via email, along with:

• a copy of client ledger card;
• details if the funds are subject to trust conditions; and
• attempts to contact the clients over the past two years (methods involved including proof of such efforts and responses to those efforts).

Making a Payment

If the information in the request is sufficient, the Law Society will approve the request and provide further details on how to submit electronic payment. Please be advised that payments by cheque, e-transfer/email transfer, direct deposit and bank drafts cannot be accepted.

Retention Period

After the Law Society receives undisbursable funds from a law firm, it holds the funds on the owners’ behalf for five years. The Law Society does not attempt to locate or initiate contact with the owners to notify them of unclaimed trust funds as these are efforts which the law firm must make before submitting the funds to the Law Society. If no one claims the funds within the five-year period, the Law Society remits the funds to the Alberta Law Foundation.

Making a Claim

Anyone who claims that they own funds held by the Law Society may submit the Claim to Trust Money Form to the Law Society’s Trust Safety department. The claim must be submitted within five years of the Law Society receiving the trust funds.

For more information please contact the Trust Safety department. Lawyers seeking guidance about undisbursable trust funds may contact the Practice Advisors at 1.866.440.4640.