Trust Accounting Flashcards
What do rules 4.01 and 4.02 say? What are the exceptions to 4.02?
4.01
- Always keep Trust Account funds separate from general account, and keep a file of of all the clients who have given you funds for it.
4.02
- A notary must always have at least 1 trust account at an accredited financial institution and keep a record of each client so that they can be covered by CDIC (up to $100,000)
Exceptions
1. If you are a Roving notary
2. Notary acting as an employee of another
3. Notary or firm which hasn’t commenced practice.
What does CDIC stand for? What report do Notaries have to send to CDIC annually?
4.02
CDIC: stands for Canadian Deposit Insurance Corporation and it requires an annual report on all trust accounts.
-> It keeps the insurance limits on an individual client account level so that each client can be covered up to $100,000.
(Most CDIC reports will be sent to you by the bank to fill out and send to CDIC)
The report must be filed every year. Stating what funds are in the account on April 30th. This needs to be submitted by May 31st.
How much can a member deposit into their account in cash or regular cheque?
Rule 4.03
No member shall deposit money in excess of $2500 received in trust unless they are guaranteed funds; draft, certified cheque, or trust cheque issued by a Notary/Lawyer/ Solicitor or licensed real estate agent.
When should funds be deposited into a trust account when a cheque is received?
Latest is the NEXT Banking Day!
Exception: Mortgage Funds, these are always on or after completion
Who can sign on a member’s trust cheque?
Rule 4.07
All cheques must be signed by the Notary/member who owns the trust cheque, or ANOTHER NOTARY who has power of attorney over the Notary.
–>This POA, must be in good standing of the Societies of British Columbia
1) All cheques and bank statements on a member’s trust account must be clearly marked…..
2) All cheques payable to a trust account must say…
1) CLEARLY MARKED “Trust Account”
2) “ ________ In Trust”
No money shall be withdrawn from a Member’s trust account except: _____________
a) money payable to a client or to be paid on behalf of a client to a third party
b) money required to be the Member for services rendered by the member’s client or disbursements made on behalf of the client
c) money paid into the trust account by mistake (which then the Notary must keep in their file notes as to why those funds were paid into their account)
What is the maximum float amount that a Member’s account can have?
$500 per account
Rule 4.10
