Memo · Trust accounting & handling client money
File note when trust funds are disputed (United States)
An internal note recording a dispute over funds in a trust account, the amount that is disputed, and the amount that is not, so the disputed part stays in trust.
- Kind
- Memo. An internal or advice memo.
- Where it applies
- United States
- AI use
- Red You write the text. The tool writes nothing into the document. Where permitted, it may check, clarify or collect data, and anything it checks or collects is verified.
- Law stated as at
- 22 October 2026
- Status
- Maintained. Checked on 22 October 2026 against the 2 authorities it cites, for United States.
- Version
- 1
- Source
- Written for this library
When to use it
Use as soon as the firm knows that two or more persons, one of whom may be the lawyer, claim interests in funds the firm holds. Do not use it as a letter taking sides.
Used for these tasks
- Check a trust-to-office transfer against the bill and the authority
- Reconcile the trust ledger to the bank and the matter files
Each task page says how far AI may help with the task and what the lawyer must review.
How AI may be used
The lawyer writes who claims what. A tool may add the ledger balance next to the figures the lawyer has already written. It does not decide the dispute or write to either claimant.
AI may
- Place the ledger balance beside the disputed and undisputed amounts the lawyer has written
- Flag a note in which the two amounts do not add up to the balance
AI must not
- Must not decide whose claim is stronger
- Must not draft a letter that pays either claimant, or that pressures the client to accept the firm's fee
- Must not describe the dispute to the other claimant using the client's confidential instructions
The lawyer checks
- The disputed amount stays in the trust account until the dispute is resolved
- The undisputed amount is identified and, if it can be paid, is paid promptly
- The note does not use the funds to force the client to accept the firm's view of the fee
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
The full text is available after you log in. It is free. When you log in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
More in Trust accounting & handling client money
- Client authority to withdraw trust money for legal costs, with notice of withdrawal and pre-transfer checklist (Uniform Law)
- Direction to pay money into the law practice trust account
- Client direction for an IOLTA or separate trust deposit (United States)
- Written direction to pay trust money to a third party
- Payment-redirection and deepfake call-back verification protocol for trust disbursements
- Check before a trust-to-operating transfer (United States)
- Review checklist for AI-assisted monthly trust reconciliation (Uniform General Rules r 48)
- Unidentified trust money register and enquiry
- Notice that funds were received into trust (United States)
- Client notice: our bank details will never change by email (payment fraud and deepfake warning)
- Trust account statement to the person for whom money is held
- Controls standard: AI tools and trust records (read-only access, no payment functions, audit trail)
- Trust irregularity briefing note for the principal
- Index for a trust investigation or external examination
All precedents for Trust accounting & handling client money · Tasks and AI use in this area