Trust Account Requirements in Professional Services
Lawyers, real estate professionals, and some other licensed professionals must maintain trust accounts for client funds. These accounts hold money that belongs to clients, not the professional—unearned retainers, settlement proceeds, earnest money deposits, and similar funds. Commingling trust funds with operating funds violates professional rules.
Payment processing must respect the trust/operating distinction. When a client pays an unearned retainer by credit card, those funds should deposit to your trust account, not your operating account. Processors unfamiliar with professional requirements may default to operating account deposits.
Trust accounting rules vary by state and profession. What applies to lawyers in California may differ from requirements in Texas or from rules governing real estate brokers. Understanding the specific rules that apply to your practice is essential for compliance.
Credit card payments to trust accounts create special considerations. Card brand rules, processor agreements, and trust accounting rules all intersect. Issues like chargeback handling for trust deposits require careful attention to avoid compliance problems.
Implementing Compliant Payment Processing
Separate merchant accounts for trust and operating deposits provide the cleanest compliance approach. When different payment types route to different accounts automatically, the risk of improper deposits decreases. This requires processors who support multiple merchant accounts with appropriate routing.
Transaction coding that distinguishes trust from operating payments supports proper handling. When retainer payments are coded differently from fee payments, systems can route them correctly and reporting can track them separately.
Chargeback handling for trust deposits requires careful attention. If a client disputes a retainer payment after funds have been used or transferred, you may face both chargeback losses and trust accounting violations. Understanding these risks helps implement protective measures.
Documentation of payment handling provides evidence of compliance. When regulators examine trust accounts, clear records showing proper receipt and handling of client funds demonstrate compliance. Your payment systems should support this documentation.
How Goodlane Group Supports Trust Account Compliance
We help professionals implement payment processing that respects trust accounting requirements. Proper fund routing, appropriate merchant account structures, and compliant documentation all factor into our recommendations.
Our analysis examines current payment handling against applicable trust account rules. Problems identified early can be corrected before they become regulatory issues.
We connect professionals with processors experienced in trust account requirements. Processors unfamiliar with these requirements often struggle to provide appropriate solutions.
For professionals uncertain about compliance status or facing regulatory scrutiny, we help clarify requirements and implement corrective measures.