Trust Administration Fee

 

The Trust Administration Fee applies only to firms operating in British Columbia, Canada.

 

The Trust Administration Fee (TAF) is a one-time charge to clients/matters, charged if a lawyer handles trust funds not used as a retainer or as payment for client expenses.  The program automatically enters a TAF disbursement of $10.00 for the client/matter when you enter a trust receipt.  Clients/matters are not charged the TAF twice.  You also have the option of recording the fee as a disbursement to the firm, rather than charging it to the client/matter.

 

For additional information contact the Law Society of British Columbia or go to www.lawsociety.bc.ca.

 

Configuring the program to charge the TAF

  1. Add a new general ledger account.  In the Record Code field, enter 8 because the account is a posting account.  In the Account Type field, enter 2 because the account is a liability account.  When you charge the TAF, this account will be updated.  When you write a check to remit the TAF, you will debit this account.

  2. Assign the new general ledger account to the TAF disbursement code in the Disbursement Codes screen.  From the G/L Account list, select the general ledger account added in Step 1 above.

    Note:
    When you install the update, the program creates a TAF disbursement code.  If you already have this code (for example, you may be using it for another disbursement type) the program will not add another, and you will need to add a new code to use for the TAF.

  3. Next, confirm that your System Settings are set correctly.  On the System Settings tab, select Client, Firm or No Prompt to choose the default setting for charging the trust administration fee when entering trust receipts.  You will have the option of choosing a different setting during data entry.  In the TAF Disb. Code field, select the TAF disbursement code configured in Step 2 above.  In the TAF File ID field, enter the File ID assigned to your firm by the Law Society of British Columbia.

 

Entering the TAF

 

The TAF applies to transactions entered on or after March 1 2005, and is a one-time charge per client/matter.  The first time a trust receipt is entered on or after this date to a client/matter to which the fee applies, you must charge the TAF either to the client/matter or to the firm.  If you backdate an entry to prior to March 1 2005, do not charge the TAF.  In this case, select Not Subject to TAF when entering the receipt.

 

You can choose to enter the TAF to the client/matter or to the firm.  If you charge the fee to the client/matter, it will be processed as a disbursement that you bill the client for.  If you charge the fee to the firm, it will appear as an expense to the firm.  Also, when you are entering trust receipts you may specify that you do not want to charge the TAF (for example, if the fee does not apply to the client).  If you charge the TAF to the firm when entering a receipt to a client/matter, the program will enter a $0.00 TAF disbursement on the client/matter, and this entry will appear on the Trust Administration Fee report.

 

If you use the Trust Transfer program to transfer funds to a client/matter the TAF is not entered automatically, and you will need to use the Disbursement Entry program to enter it manually.  Enter a $10 charge to the client/matter, selecting the TAF disbursement code.

 

To reverse the TAF off a client/matter use the Disbursement Edit feature.  Select a different disbursement code, and change the disbursement amount to $0.00.  Post this entry to reverse the TAF and update the Trust Administration Fee report correctly.  

 

Remitting the TAF

 

For filing instructions and additional information contact the Law Society of British Columbia or visit www.lawsociety.bc.ca.

  1. To determine the amount to remit, print the Trust Administration Fee reports.  The Filing Form report shows a monthly breakdown of TAF charged to clients/matters within the reporting period, with totals by month and for the entire period.  The second report displays a list of clients/matters for which the TAF was either charged to the client/matter or to the firm, and the third report displays a list of clients/matters to which the TAF was not charged.  Review these reports and ensure there are no adjustments necessary.

  2. If adjustments are necessary, use the Disbursement Edit feature or the Disbursement Entry feature to make the corrections.  For example, if the TAF was entered on a client/matter for which the fee does not apply, use the Disbursement Edit feature to select a different disbursement code, and change the disbursement amount to $0.00.  Or, if the TAF was not entered on a client/matter for which the fee does apply, manually enter it using the Disbursement Entry feature.  Enter a $10 charge to the client/matter, selecting the TAF disbursement code.  Reprint the reports after making adjustments.

  3. Use Write General Checks to pay the Total Payable amount shown on the Filing Form report.  Post the check to the general ledger liability account set up in Step 1 of "Configuring the program to charge the TAF" above.

  4. Send the check and a copy of the signed and dated Filing Form to the address provided by the Law Society.  Keep a copy of the reports for your own records.