Do you have any unclaimed trust funds?
You may be able to apply to transfer them to the Law Society.
Section 59.6 of the Law Society Act (the “Act”) permits a paralegal who has held money in trust for or on account of a person to apply for permission to transfer the money to the Law Society in certain circumstances. This Paralegal Update provides information about the circumstances under which a paralegal may transfer unclaimed trust funds to the Law Society and the steps required to do so.
When is a paralegal eligible to apply for permission to transfer unclaimed trust funds to the Law Society?
A paralegal may apply for permission to transfer unclaimed trust funds to the Law Society if the money has been held in trust for or on account of a person for at least 2 years and either
- The paralegal has been unable to locate the person entitled to the money despite having made reasonable efforts throughout a period of at least two years; or
- The paralegal cannot determine the identity of the person who is entitled to the money. This does not include situations in which entitlement to funds is being disputed between two or more known parties.
How does a paralegal apply to transfer the money to the Law Society?
A paralegal must complete and file with the Law Society the Licensee Application Form. The paralegal who was responsible for the trust funds/file should sign the application. If that paralegal cannot do so, another paralegal or lawyer must sign the application.
A separate application form must be completed and filed with the Law Society for each file or matter for which the paralegal seeks permission to transfer money. If, in respect of one file or matter two or more persons are entitled to the money, information must be provided for each person.
The application form will be reviewed by the Law Society. In some cases, the Law Society may contact the paralegal for clarification about information included in the form.
Upon completion of the review, the Law Society will notify the paralegal whether permission to transfer the money to the Law Society has or has not been granted.
What must a paralegal do if the Law Society grants permission to transfer the money?
If permission to transfer the money to the Law Society has been granted, the paralegal must
- Send the Law Society a trust cheque, made payable to the “Law Society of Upper Canada,” in an amount equal to the amount of money for which the paralegal received permission to transfer; and
- Send the Law Society copies of the paralegal’s financial records relating to the money which the paralegal has been permitted to transfer.
Permission to transfer the money to the Law Society will typically be subject to the condition that the paralegal inform the Society immediately once the paralegal obtains any new information relating to any person entitled to the money that was transferred to the Law Society.
What happens after a paralegal transfers the money to the Law Society?
Once the money has been transferred to the Law Society, the paralegal’s liability as trustee or fiduciary with respect to the amount transferred is extinguished.
Pursuant to section 59.7 of the Law Society Act, the Law Society will hold the money in trust for the purpose of satisfying the claims of the persons who are entitled to the money.
Each year, the Law Society will publish in the Gazette the name and last known municipality of residence of each person entitled to money that, during the previous year, was transferred to it by lawyers and paralegals. The Law Society is also obliged to take such steps as it considers appropriate to locate the persons entitled to the money held in trust by the Law Society. In this regard, the Law Society may, from time to time, contact lawyers and paralegals who have transferred money to the Law Society to determine whether, since transferring the money, any new information has been obtained about the location of any person entitled to the money transferred to the Law Society or about who may be entitled to the money transferred to the Law Society.
Where can I find more information about these processes?
By-Law 10 contains more detailed information about the application process for transferring unclaimed trust funds to the Law Society.
The Law Society has also set up a voicemail box to take calls from anyone who wants more information. The telephone number is (416) 947-3312.
Application forms are available on the Law Society’s website to download and complete.