The SmartBean® Guide to Mastering the CTAPP Annual Self-Assessment

Under the creation of the 2023 CTAPP (i.e., Client Trust Account Protection Program), attorneys must complete new certifications. This is to continue practicing within the State of California.

The required certifications consist of three forms of self-reporting: the annual trust account registrations, an annual trust account certification of compliance, and the annual self-assessment.

Attorneys complete the CTAPP assessment through a My State Bar profile, with the reports regarding all client trust accounts open within the reporting period. 

What is the CTAPP Assessment?

The CTAPP Assessment consists of the following five steps.

1. The Annual Client Trust Account Reporting
2. Account Registration
3. Self-Assessment
4. Client Trust Account Annual Certification of Compliance
5. Declaration submission

This article will explore the details of the Annual Self-assessment, or Step 3, and offer CTAPP assessment tips to help make your next CTAPP assessment a breeze.

Who Must Take the CTAPP Self-Assessment? 

CTAPP regulations state that all attorneys with an active license status at any time during the reporting period must complete the self-assessment. Attorneys can complete the assessment individually or through a firm as long as they complete it yearly.

A few exceptions to this rule apply mostly to unlicensed attorneys. Unlicensed attorneys within the reporting period or ineligible to practice law are not required to take the self-assessment.

Any attorneys opening or managing any client trust accounts within the reporting period must complete the reporting survey.

This includes licensees who elect for a voluntary status at any point during the reporting period. The reporting period for 2024 consists of the entire calendar year of 2023.

CTAPP Self-Assessment Tips

When taking the self-assessment, attorneys should answer “yes” to at least one of the following questions: 

• At any point during the reporting period, did the attorney act as a signatory or exercise managerial or primary administrative oversight for a trust account?
• Was the attorney responsible for complying with any of the prohibitions or requirements in Rule 1.15 of the Rules of Professional Conduct? 

If attorneys are not responsible for any Rule 1.15 requirements, they may reply “no” to questions about responsibility for entrusted funds during the reporting period.

According to the State Bar’s website, licensees likely to answer this way may include:

• Professors of Law who do not represent clients
• An in-house counsel employed by clients never receives or holds client funds. 
• A lawyer in a large firm who only performs document review has no client interaction and has no rule 1.15 responsibilities to carry out.
• Government lawyer-employee who is not responsible for the safekeeping of entrusted funds.
• A lawyer who bills for fees and costs after completion of work and does not take advance fees. Their practice does not involve the receipt of any other funds.

What’s On the Annual Self-Assessment? 

The annual self-assessment is designed to ensure that attorneys are fulfilling their fiduciary and ethical obligations.

In this case, these duties refer to the Rule 1.15 expansion that took effect in January 2023. The Safekeeping Funds and Property of Clients and Other Persons are the basis for Rule 2.5. The CTAPP Assessment contains many questions from protocols from the rule and others. 

The annual self-assessment aims to facilitate awareness of duties and allow attorneys to assess their trust account management practices and discover shortcomings.

What to Know About CTAPP Assessment Questions

It involves a dozen survey-style self-assessment questions on reconciliation, IOLTA management, record keeping, disputes, etc. In more detail, the annual self-assessment also regards the below: 

• Client funds are separate from attorneys’ personal and business funds in trust accounts.
• Regularly reconciled trust accounts to verify accuracy and promptly identify discrepancies.
• Comprehensive financial records, including bank statements, receipts, invoices, and client ledgers, are kept to facilitate reporting and State Bar audit.
• Clients received detailed reports of the status and accounting of entrusted funds.
• Clients receive billing statements disclosing fees, expenses, and services rendered.

FAQs and CTAPP Assessment Tips

When is the deadline for the CTAPP/Self-Assessment?

The reporting period of January 1, 2023 - December 31, 2023, will be reported in 2024. The deadline is February 1.

The State Bar must receive the trust account registration data by the February 1 deadline. The attorney or firm will receive a noncompliance penalty if they don't meet the deadline. Then, they receive an involuntary inactive status.

Is it wrong to answer “no” to any self-assessment items? 

The self-assessment is a tool to help lawyers assess their current practices. To respond “no'' on the self-assessment isn't a wrong answer!

It is the right answer if it correctly reflects an attorney’s relevant practices.

For more specific questions about California’s rules and recordkeeping standards, call the toll-free Ethics Hotline at 800-238-4427.

The self-assessment asks about tasks that other persons in my firm are responsible for (e.g., conducting a monthly reconciliation). How should I answer? 

A subordinate lawyer may ask the attorney in charge of the firm’s trust accounts if they perform monthly reconciliations on the client's trust accounts. The subordinate lawyer may rely on and relay that information when completing the self-assessment. 

Need Help with CTAPP?

Have any questions?

Through the Trust Account Bookkeeping (TAB) services at SmartBean®, attorneys can remain in CTAPP compliance and receive accurate and affordable reporting assistance.

Schedule a free consultation with SmartBean® today! We’re accounting and bookkeeping experts in Orange County who will help you with any questions or concerns you may have with CTAPP self-assessments.

We’re not just bean counters; we’re the beans you can count on!