The Future of Trust Account Regulations: Regulations Predictions and Recommendations

Trust Account Bookkeeping
December 19, 2023
January 5, 2024

This past year, the State Bar implemented significant changes to how attorneys maintain client funds. The update to Rule 1.15, “Safekeeping of Client Funds and Property of Clients and Other Persons,” and the creation of CTAPP under Rule 2.5 presented clear guidelines for how attorneys were to carry out these fiduciary duties.

Trust Account Regulations: Changes

With these changes, the State Bar of California suggested that there may be further upcoming updates to these changes. Law firms and attorneys alike are responsible for staying up to date on both the program and new regulations via the resources offered by the State Bar of California’s website and the Handbook on Client Trust Accounting

Since attorneys must remain up to date on any regulation changes of trust accounting, this implication alone firmly implies that changes will undoubtedly come.

But what exactly will future trust account protocols look like? Will there be a repeat of the 2023 overhaul where regulations and expectations are completely reworked? The State Bar of California has given licensees little insight into the answers to these questions. 

Going forward, the only concrete expansion plans from the State Bar refer to the Client Trust Account Protection Program or Rule 2.5. Per the State Bar’s website, potential future implementations include: 

These updates can be expected to occur and should not come as a surprise to attorneys if these updates become part of Rule 2.5 compliance. No further implementations have since been named. 

Trust Account Regulations Predictions for the Future

Perhaps the best way to garner upcoming regulations predictions is to look at the areas of trust accounting regulations most commonly presenting difficulty to attorneys and law firms. 

Historically and recently, these points of contention are guaranteed to be the jumping-off point for new regulation if and when the State Bar begins to make legislative alterations. 

Common licensee pain points/mistakes include: 

To combat the previously mentioned, the State Bar might move to rectify with the following regulations predictions: 

Help Maintain Client Funds Using SmartBean®!

Should attorneys have questions on obligations about maintaining client funds, there are resources such as the aforementioned Handbook for Client Trust Accounting for California Attorneys.

The Ethics Hotline is also available at specified times. The above statements are merely trust account future regulations predictions. The above should not be taken as legal recommendations of any sort. Our official legal recommendations can be given when you give us a call at SmartBean®!

We’re the bean counters you can count on to ensure you remain in compliance with the present safekeeping laws and whatever the trust account future looks like! Call for a free consultation of our TAB services!

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