January 2007

Completing Your Trust Account Declaration Form  

by Cheryl M. Heuett

All active attorneys must complete and submit a trust account declaration (form B1) every year. This applies to every WSBA member in active status, whether or not you are actually practicing law or have a trust account. Trust account declarations are the blue forms included in your annual licensing packet. These forms are due February 1, 2007. If you did not receive your annual licensing packet, you should contact the WSBA Service Center at 800-945-WSBA (9722) or 206-443-WSBA (9722) to obtain one. Some of the responses and comments we receive with the declarations indicate there may be some confusion about how to complete them. Following are some questions and answers on the trust account declaration to help you complete this year’s form.

Must I complete this form every year, even if the information hasn’t changed since last year?

Yes. It isn’t sufficient to indicate on the form that there has been no change from the previous year. Rule 15.5 of the Rules for Enforcement of Lawyer Conduct requires each active lawyer to complete, execute, and deliver to the Association this declaration by the date specified annually. The information you complete on the form needs to be current and complete, including your trust account information.

If I don’t send in a form, won’t it be obvious to WSBA that I don’t have a trust account?

No. If you fail to send in a trust account declaration, we will not assume that you do not maintain a trust account and you may be subject to discipline.

Do I have to answer every question if I’m not engaged in the practice of law?

Not always. If you are a government lawyer or foreign-house counsel who does not otherwise engage in the practice of law, check one of those boxes under Part I. Then check “No” to Question 1 and sign on the first signature line at the bottom of Part I.

If you are not engaged in the practice of law at all, please check that box where indicated under Part I, and sign on the first signature line at the bottom of Part I.

I’m an associate in a large firm and have nothing to do with the trust account. How can I certify trust account records and client funds are being maintained in compliance with the trust account rules?

Every attorney must personally respond to the request to certify that funds are handled correctly. If you work for a firm and have questions about the trust account, talk to the managing partner and/or accounting staff until you feel comfortable signing the certification. You should have an understanding of how a trust account works and how your firm manages its account.

Can I have my firm fill out my declaration for me and mail it in?

Someone in your firm may complete Part II or prepare a separate piece of paper with the firm’s trust account information on it to attach to your declaration. However, you must personally certify whether you are in compliance and sign and date the form under Part I. If you do not, the form will be returned to you as incomplete.

The first question on the form asks if I handle Washington client funds. What is meant by that?

Washington client funds are funds in your possession that belong to your clients or third persons in connection with a representation for which you are required to use your Washington license. Examples of client funds are advance fee deposits, settlement proceeds, escrow funds, and client overpayments. Earned fees you receive are not client funds. If you receive only earned fees from clients, you should answer “no” to the question asking if you handle client funds.

Are there ever any circumstances when I would indicate that I do not handle client funds, but that I do maintain an IOLTA account?

Not usually. Some attorneys respond this way because they no longer accept client funds, but still have residual client money that needs to be refunded. If that’s the case, you should indicate that you are handling client funds. These client funds should then be refunded so you can close your trust account. If you cannot locate the clients or discover funds in your trust account that you cannot identify as belonging to you or your client, these should be remitted to the Unclaimed Property Division of the Washington State Department of Revenue.

Attorneys often believe they are required to have an IOLTA account to maintain their license, whether they handle client funds or not. If you do not handle client funds, you do not need to open an IOLTA account.

If I practice in multiple states and/or Canadian provinces, whose rules do I follow regarding the trust account and client funds?

The WSBA trust account declaration relates only to the practice of law under your Washington license. All states and provinces have different requirements regarding safekeeping of client funds. When you receive client funds, you must analyze if you are holding these funds in connection with a representation where you are using your Washington license. If you are using your Washington license, then you must place these funds in an IOLTA account that meets the requirements of RPC 1.15A.

If you have IOLTA accounts in other states or Canadian provinces, you do not need to provide information regarding those accounts on your Washington trust account declaration.

Do I need to list all trust accounts I maintain in Part II of the declaration?

No. You only need to provide bank-account information for any IOLTA or pooled interest-bearing accounts you have open. You do not need to provide bank-account information for your individual client trust accounts.

Do I need to update my trust account declaration when I open or close an IOLTA account or change banks during the year?

No. Update your information when you file next year’s trust account declaration.

If you have a question about your trust account declaration that isn’t answered here, please feel free to call WSBA Audit Manager Trina Doty (206-727-8242 or 800-945-9722, ext. 8242), Auditor Cheryl Heuett (206-733-5937 or 800-945-9722, ext. 5937), or Auditor Jim Roberg (206-733-5921 or 800-945-9722, ext. 5921). 

Cheryl Heuett is a WSBA auditor. She performs random examinations, and educates attorneys about trust account rules and regulations.