Trust accounts are fundamental to many professions where funds are held on behalf of clients or third parties. Lawyers, accountants, real estate and property agents, motor dealers, debt collection agents and owners’ corporations all commonly operate trust accounts as part of their day‑to‑day businesses. While these accounts are designed to protect client monies, they can also present a significant opportunity for fraud and misappropriation.
What Is a Trust Account?
A trust account is an account used to hold money on behalf of another party, where the account holder owes a fiduciary obligation to deal with those funds strictly in accordance with the relevant law and the client’s instructions. The funds are not the property of the business or practitioner and must not be used for any other purpose.
