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Annual Bar rules proposals--correction.

The Board of Governors of The Florida Bar published in the September 1 News an official notice of filing with the Supreme Court of Florida, on or about October 1, a petition to amend the Rules Regulating The Florida Bar, including the full text of the proposed amendments. Omitted from that notice were proposed amendments to add an appendix to Rule 5-1.2, sample trust account forms. The appendix of sample forms is reproduced in its entirety below and will be included in the filing. A copy of the full consolidated submission may be requested by contacting the Rules Administrative Coordinator, The Florida Bar, 651 East Jefferson St., Tallahassee 32399-2300 or calling (850) 561-5600, ext. 5751. Members who desire to comment on these proposed amendments may do so within 30 days of the filing of the Bar's petition. Comments should be filed directly with the clerk of the Supreme Court of Florida, and a copy must be served on the executive director of The Florida Bar. Rule 1-12.1, Rules Regulating The Florida Bar, governs these proceedings.

APPENDIX

LAW FIRM TRUST ACCOUNT PLAN FOR CALENDAR/FISCAL YEAR 20__ (for two person firms or smaller firms with only one office location)

In compliance with Rule 5-1.2, Rules Regulating The Florida Bar, the __ law firm hereby presents its trust account plan setting forth those persons responsible for maintaining and monitoring the firm's trust account(s).

Checks: Prepared by__(partner A's assistant) and signed by __ partner A or B for checks up to $10,000. As a firm policy, checks over $10,000 must be signed by both __ partners A and B.

Deposit Slips: Prepared by __ (partner A's assistant) and reviewed by __ partner A or B.

Electronic transfers: Prepared by __ (partner A's assistant) and authorized by __ partner A or B for electronic transfers up to $10,000. As a firm policy, electronic transfers over $10,000 must be authorized by __ Partners A and B.

Monthly reconciliations: Completed by __ (partner A's assistant) and reviewed and approved by __ partner A, majority shareholder.

Annual reconciliations: Completed by __ (partner A's assistant, bookkeeper) and reviewed by independent CPA firm __ A, which audits the firm's trust account annually. The annual reconciliation is reviewed and approved by both __ partners A and B.

Monthly client ledger card reconciliations: Completed by __(partner A's assistant) and reviewed and approved by __ partner A, majority shareholder.

Annual client ledger card reconciliations: Completed by __ (partner A's assistant, bookkeeper) and reviewed by independent CPA firm __ A, which audits the firm's trust account annually. The annual reconciliation is reviewed and approved by both __ partners A and B.

Questions relating to trust accounts: Questions regarding the firm trust account should be addressed to __ partner A, majority shareholder. If __ partner A cannot answer the question(s), such question(s) will be answered by both __ partners A and B.

LAW FIRM TRUST ACCOUNT PLAN FOR CALENDAR/FISCAL YEAR 20__(for multi-office firms with branch offices in Florida or large firms with single offices)

In compliance with Rule 5-1.2, Rules Regulating The Florida Bar, the __ law firm hereby presents its trust account plan setting forth those lawyers responsible for maintaining and monitoring the firm's trust account(s) in the __ (city) __, Florida branch office of the firm. The firm is set up so that each office is responsible for its own trust accounting review and responsibility.

Checks: Prepared by __ (Office Manager, CPA, or business manager), signed by __ partner Y, managing partner, for checks up to $10,000. Pursuant to firm policy, checks over $10,000 must be signed by __ partners Y and Z, of the firm's board of directors.

Deposit Slips: Prepared by __ (Office Manager, CPA, or business manager) and reviewed by __ partner Y, managing partner.

Electronic transfers: Prepared by __ (Office Manager, CPA, business manager) and authorized by __ partner Y, managing partner, for electronic transfers up to $10,000. Pursuant to firm policy, electronic transfers over $10,000 must be authorized by __ partners Y and Z, of the firm's board of directors.

Monthly reconciliations: Completed by __ (Office Manager, CPA, or business manager) and reviewed and approved by __ partner Y, managing partner.

Annual reconciliations: Prepared by_(Office Manager, CPA, business manager) and reviewed by independent CPA firm A, which audits the trust account annually. The reconciliation is then reviewed and approved by the firm's board of directors, composed of __ partners Y, Z and P.

Monthly client ledger card reconciliations: Prepared by __(Office Manager, CPA, or business manager) and reviewed and approved by __ partner Y, managing partner.

Annual client ledger card reconciliations: Prepared by __(Office Manager, CPA, or business manager) and reviewed by independent CPA firm __A, which audits the trust account client ledger cards annually. The reconciliation is reviewed and approved by the firm's board of directors, composed of __ partners Y, Z and P.

Questions relating to trust accounts: Questions regarding the firm's trust account(s) should be addressed to __ partner Y, managing partner. If partner Y cannot answer the question(s), such question(s) will be addressed to and answered by the firm's board of directors, composed of __ partners Y, Z and P.

Instructions for Preparing Trust Account Plans

A law firm's trust account plan, required by Rule 5-1.2, Rules Regulating The Florida Bar, should specifically name the lawyer or lawyers who are ultimately responsible for the firm's plan or any part of it. These lawyers must be shareholders/ partners/owners of the firm. If a non-lawyer staff member is responsible for filling out a check before a lawyer signs it, or if a CPA or office manager prepares the initial reconciliation of the trust account(s), that person's title only should be included in the plan along with the name of the lawyer who reviews that staff member or accountant's work and approves it. Staff members change but the position handling a particular duty is less likely to change.

A new plan must be issued when there has been a change to the plan.

Multi-national and multi-state law firms with offices in Florida should publish the plan that describes the trust accounting supervision in their particular branch office of the firm. If that branch office's trust accounts are reviewed by a central office and a firm-wide group of lawyers those individuals should be named in the plan as well.

Schedule 1

Sample Trust Account Check

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(1) The title of all trust account checks must state the words "Trust Account" per Rule 5-1.2 (b) (1) Rules Regulating The Florida Bar.

(2) All trust account checks must include the client's name and the reason, purpose or matter for the check payment on the Memo line.

The lawyer or law firm is required to maintain original cancelled checks or digital copies. Legible endorsements (back side of check) are required to be maintained by Rule 5-1.2 (b) (3) Rules Regulating The Florida Bar.

Digital copies may be maintained as long as the copies include all data contained in the original documents and maybe produced whenrequired. Rule 5-1.2(b)

Not all trust accounts must be IOTA trust accounts. Some trusts accounts are set up for individual clients. The account should be an IOTA trust account unless the funds may earn income for the client or a third person in excess of the costs incurred to secure the income. In a non-IOTA account, the interest earned is the property of the client or related third party who is entitled to the interest. Such an account should use the client's taxpayer identification number of the client or related third party entitled to the interest. In an IOTA trust account, the interest earned is property of The Florida Bar Foundation, a nonprofit corporation chartered to foster law-related public interest programs on behalf of Florida's legal profession, and should use The Florida Bar Foundation's tax identification number. To match the name on the account with the taxpayer identification number on the account, banks are permitted to enter the name of the client or related third party to whom the interest will be paid or "The Florida Bar Foundation" on the second name line on the account.

(3) All trust account checks must be serially pre-numbered. If this is a new trust account, you must use temporary checks until the numbered check supply is ordered and received. Most bank branches have the necessary equipment to print permanent numbers on temporary checks, (e.g T-001, T-002, etc.).

(4) All trust account checks must include a bank routing number, account number and check number.

Schedule 2

Sample Trust Account Deposit Slip

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Original or copies (digital copies permitted) are required to be maintained by Rule 5-1.2 (b) (2), Rules Regulating The Florida Bar.

The deposit slip should state the client's name, the source and purpose or matter.

Sample Monthly Bank Reconciliation Statement (Reconciled bank statement with cash receipts and disbursements journal)

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Schedule 3

Sample Bank Reconciliation Statement

Notes:

The bank reconciliation statement is required to be compiled monthly per Rule 5-1.2 (c) (1) (A), Rules Regulating The Florida Bar.

The top half of the statement reconciles the bank statement:

The statement begins with the bank statement ending balance.

It adds any deposits (listed individually) that are included in the cash receipts and disbursements journal which are not on the bank statement.

It subtracts any outstanding checks (listed individually) that are included in the cash receipts and disbursements journal which are not on the bank statement.

It adds or subtracts any other debits or credits which are not on the bank statement (Example--post closing electronic transfer).

The bottom half of the statement reconciles the cash receipts and disbursements journal:

The statement begins with the current balance in the trust account (the ending balance in the cash receipts and disbursements journal).

It adds or subtracts items on the bank statement which are not in the cash receipts and disbursements journal (Examples--Service charges and Interest Income).

The last line of the statement should always be zero.

Schedule 4

Sample Monthly Client Ledger Comparison (Client Ledger Card and adjusted reconciled trust account bank balance)

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Comparisons are required to be prepared monthly per Rule 5-1.2 (c) (1) (B), Rules Regulating The Florida Bar.

Client ledger card balances should be listed by client reflecting all amounts in the trust account (e.g., due to each client, attorney fees and/or third parties).

One of the Client ledger cards should be for the firm to record a small balance to cover any bank service charges per Rule5-1.1(a)(1),Rules Regulating The Florida Bar.

There should not be an overage or a shortage. The bottom line of this schedule should always be zero.

Schedule 5

Cash Receipts and Disbursements Journal

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Schedule 5

Cash Receipts and Disbursements Journal

Notes:

A separate cash receipts and disbursements journal is required by Rule 5-1.2 (b) (5).

The journal must contain columns for receipts, disbursements, transfers and the account balance as well as the identification of the client or matter for which the funds were received, disbursed or transferred, the date, the check or wire transfer number, and the reason for which the funds were received, disbursed or transferred.

Schedule 6

Client Ledges Card Law Firm Trust Account Client Ledger (Name of Client)

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Rule 5-1.2 (b) (6), Rules Regulating The Florida Bar, requires that a separate file or ledger with an individual card be maintained for each client showing all individual receipts, disbursements or transfers.

The ledger card must identify the client and the matter for which trust funds were received, disbursed on transferred, the date for all transactions, the check number or wire reference for disbursements and the reasons for which funds were received, disbursed or transferred.

Schedule 7

Annual Listing

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An annual detailed listing identifying the balance of the unexpended trust money held for each client is required by Rule 5-1.2 (c) (2).

Be certain you included the "Firm's Miscellaneous Ledger" or the Annual Listing may not balance.

Balances and client name must be listed individually.
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Title Annotation:Notice
Publication:Florida Bar News
Date:Sep 15, 2012
Words:1998
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