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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.

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 were discontinued effective January 1, 2016 to simplify reporting for the professions.

Instead, the reporting of mixed trust accounts is integrated with the Annual Report Filing formerly the Lawyer Annual Report and the Paralegal Annual Report, which must be submitted through the Law Society Portal. The mixed trust account information is shared with The Law Foundation of Ontario.

Form to Report on Opening or Closing a Trust Account.

Frequently Asked Questions


1. 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.

2. 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.

3. 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. By statute, 75% of this revenue goes to Legal Aid Ontario. The Law Foundation of Ontario uses the other 25% to make grants that advance access to justice.

4. What is The Law Foundation of Ontario?
Established by statute in 1974, The Law Foundation of Ontario is the sole foundation in Ontario with the mandate of increasing access to justice. The Foundation’s main source of revenue is interest received from 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.

5. I am not the designated financial licensee of my firm/employer, do I have to report the mixed trust account on my Annual Report Filing?
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 their Annual Report Filing.

6. 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 Filing.

7. 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.

8. Where can I find Form 1, Form 2 and Form 3?
Form 1, Form 2 and Form 3 are discontinued 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 mixed trust account questions have been incorporated into the financial reporting section of your Annual Report Filing. The opening or closing of a trust account is now reported using the Report on Opening or Closing a Trust Account.

9. How do I file mixed trust account information for a year other than the current reporting year?
Contact the By-Law Administration Services department at bylawadmin@lso.ca.

10. 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.

If you have any further questions about reporting a mixed trust account, please contact the By-Law Administration Services department at the Law Society of Ontario at bylawadmin@lso.ca.