Frequently asked questions – Reporting mixed trust accounts
How to report your mixed trust accounts
Reporting mixed trust accounts enables The Law Foundation of Ontario to be confident that it receives the interest generated on all lawyers’ and paralegals’ mixed trust accounts. This revenue goes to The Law Foundation of Ontario to make grants that advance access to justice including to Legal Aid Ontario.
Effective January 1, 2016, Form 1: Annual Report on The Law Foundation of Ontario, Form 2: Report on Opening a Mixed Trust Account and Form 3: Report on Closing a Mixed Trust Account are discontinued to simplify reporting for the professions.
Instead, the reporting of mixed trust accounts has been integrated with the Lawyer Annual Report and the Paralegal Annual Report, which must be filed through the LSO Portal. The mixed trust account information will then be shared with The Law Foundation of Ontario.
Frequently asked questions
- What is a mixed trust account?
As set out in subsection 57(1) of the Law Society Act, a mixed trust account is one in which a licensee holds money in trust for or on account of more than one client in one fund.
- Who needs to report a mixed trust account?
Every mixed trust account must be reported. The mixed trust account information can be filed by a lawyer, paralegal or designated financial filing licensee on behalf of a firm, who is responsible for client trust monies held in a mixed trust account at any time during the reporting year. This could include sole practitioners, the designated financial filing licensee on behalf of a firm, or any licensee who is responsible for a mixed trust account not otherwise reported.
- What happens to the interest earned on the client funds in the mixed trust account?
Under section 57 of the Law Society Act, The Law Foundation of Ontario receives the interest on lawyers’ and paralegals’ mixed trust accounts. This revenue goes to The Law Foundation of Ontario to make grants that advance access to justice including Legal Aid Ontario.
- I am not the designated financial licensee of my firm/employer, do I have to report the mixed trust account on my Annual Report?
A licensee who is a member of a firm may be responsible for a mixed trust account which is not the responsibility of the firm and therefore not reported by the firm’s designated financial filing licensee. That mixed trust account must be reported separately by the licensee on his or her Annual Report.
- How do I report a mixed trust account?
Effective January 1, 2016, your report on mixed trust accounts has been incorporated into the financial reporting section of your Annual Report.
- What must I do when I open a trust account?
You must complete a Report on Opening or Closing a Trust Account and forward it to the By-Law Administration Services department at the Law Society of Ontario. If it is a mixed trust account, you must direct your financial institution to pay any interest on the account to The Law Foundation of Ontario. You should keep a copy of the direction and send another copy to The Law Foundation of Ontario to assist in ensuring that the interest is remitted.
- Where can I find the Form 1?
Effective January 1, 2016 the Form 1 is discontinued. The Form 1 mixed trust account questions have been incorporated into the financial reporting section of your Annual Report.
- Do I have to provide details regarding new mixed trust accounts and closed mixed trust accounts on Form 2 and Form 3?
No. Under Ontario Regulation 709/15, lawyers and paralegals are no longer required to file the Form 1, Form 2 or Form 3. The Form 1 information is reported on the Lawyer Annual Report or the Paralegal Annual Report starting January 1, 2016. The opening or closing of a trust account is now reported using the Report on the Opening or Closing of a Trust Account.
- How do I file mixed trust account information for a prior year?
Contact The Law Foundation of Ontario at firstname.lastname@example.org or 416-598-1550 for support in completing a Supplementary Report on a Mixed Trust Account.
- What detail should I keep on file?
The Law Foundation of Ontario may request a supplementary report to confirm or clarify information regarding your mixed trust accounts. See Ontario Regulation 709/15. As a general rule, your regular monthly bank statement provides the necessary information to complete a supplementary report if one is requested. You should also keep a copy of your direction to the financial institution to remit interest to The Law Foundation of Ontario.