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 may apply to pay the funds to the Law Society if trust funds have been held for over two years and the owners cannot be located despite the firm’s reasonable attempts to locate them. (See Rule 119.27(3) of the Rules of the Law Society of Alberta and section 117(5) of the Legal Profession Act.)

Retention Period

After the Law Society receives unclaimed funds from a law firm, it will act as a custodian on behalf of the owners for five years. The Law Society does not attempt to initiate contact with the owners to notify them of unclaimed trust funds. Following the five-year period, and if a claim to the trust money has not been made, the Law Society will remit the funds to the Alberta Law Foundation.

By the Numbers (2014 – 2018):

• Approximately $1.98M of undisbursable trust money was received by the Law Society over the past five years;
• Approximately $13.5K of that money, or less than 1%, was claimed over the past five years; and
• 82% of claimed balances were less than $1,000.

When should funds be remitted to the Law Society?

If held by a law firm greater than two years, and

1. The amount is less than $50 OR
2. The amount is more than $50 if the firm has made reasonable efforts to contact the owner of the money.

When should funds not be remitted to the Law Society?

1. If the law firm has held the funds less than two years, OR
2. If the amount is more than $50 and the firm has not made reasonable efforts to contact the owner of the money.

The Law Society can request further information or return the money if the information in the application is insufficient or no attempts have been made to distribute the trust money to the proper parties.

What constitutes reasonable efforts?

Law firms may take the following steps in an attempt to locate the owners of undisbursable trust funds:

• Internet search
• Written or email correspondence
• Inquiry made of other individuals
• Social media search e.g. Facebook, Instagram, LinkedIn
• Retaining private investigator
• Obituaries and death notices
• Public records

Simply sending the returned cheque or stale-dated cheque back to the client’s last known address is insufficient.

If reasonable expenses are incurred in locating the owner of trust funds, an account can be rendered and applied against the trust money.  The expenses should reflect the value of the funds held in trust.

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.

How should the funds be remitted to the Law Society?

• For amounts than $50, fill out the Undisbursable Trust Money – Short Form and send it with a trust cheque to the Law Society of Alberta, Attention: Accounting Department.
• For amounts greater than $50, fill out the Undisbursable Trust Money – Long Form and send it with a trust cheque to the Law Society of Alberta, Attention: Accounting Department.

Making a Claim

Members of the public seeking to make a claim to funds that have been paid to the Law Society may do so by completing a Claim to Trust Money Form. The form should be completed and sent to the Law Society of Alberta, Accounting Department via email at Accounting@lawsociety.ab.ca.

For more information please contact Trust Safety via email at Trust.Safety@lawsociety.ab.ca or the Practice Advisors office via phone 1.866.440.4640.