Lynda ArtesaniLegal Accountant and Data Migration Specialist at The Proper Trust

The Essentials of Trust Fund Management #legalaccounting #lawfirms #trustaccounting

17 Feb 2026 · 1 min

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In this segment, the speaker addresses Linda about the strict compliance requirements governing law‑firm trust accounts. Every inflow or outflow of funds must be accompanied by a specific name, reason, and supporting details. If a transaction is identified as fraudulent—especially when it creates a negative balance—the incident must be recorded and automatically reported to the trust compliance department. Such a report triggers at least a paper audit or other validation to investigate and document the circumstances. The speaker emphasizes the importance of thorough documentation and readiness for audit scrutiny in trust‑account management.

Chapters

Linda, I mean, we knew this, but we got further confirmation in a meeting we had last week. No matter what, that trust account— money in, money out— has a compliance factor to the law firm. You choose to put the money in, you choose to take the money out. You better have a name, a reason, and details supporting where that movement is from. And if it's a fraud moment, that's That's a really hard thing to do, but you've got to put it on there, especially if the fraud moment creates a negative balance in your bank account. That's an automatic reporting to the trust compliance, and right there you're going to have at minimum a paper audit of some sort or some sort of validation of what happened here, and you have to describe the details. So I don't know. I mean, there's plenty on here to talk about.