A poorly tracked trust account movement can trigger a professional inspection — and jeopardize the entire firm's reputation. F2 and F3 accounts are not an accounting option: they are deontological obligations.
Trust accounts hold funds that do not belong to the firm: fee advances, retainers, settlements. The Barreau du Québec and Chambre des notaires strictly govern their management.
F2 and F3 accounts
General trust account (F2)
Pools funds for multiple clients. Interest earned generally belongs to the Barreau compensation fund.
Specific trust account (F3)
Opened in one client's name when amounts are large or must earn interest for the client. Some F3 accounts require a T3 filing with the CRA.
Choosing F2 or F3 is not a preference — it is a matter of rules.
Mandatory registers
The Regulation respecting accounting and trust accounts of lawyers requires:
- Trust receipts and disbursements journal.
- Client ledgers detailing movements per file.
- Monthly bank reconciliation reports.
- Annual report filed with the Barreau.
« The annual report is not administrative paperwork: it proves the firm controls its client accounts. »
Professional inspection
During an inspection, the auditor will request:
- Client balances as at a given date.
- Reconciliation between F2/F3 bank balance and client balances.
- Supporting documents (invoices, agreements, instructions).
An incomplete register at inspection time is hard to recover from.
Common mistakes
- Receiving fee advances in the operating account.
- Mixing client funds with firm funds.
- Failing to transfer earned fees to the general account.
- Skipping monthly reconciliations.
These errors are avoidable — yet they remain the most frequent in inspections.
Chambre des notaires
Notaries are subject to separate trust account rules issued by the Chambre des notaires du Québec. Principles of fund separation and record-keeping apply similarly.
Lawyers and notaries share the same principle: client funds are never yours.