A trust account refers to any type of financial account that is opened by an individual and managed by a designated trustee for the benefit of a third party in accordance with agreed-upon terms.
Trust accounting is more about bookkeeping than accounting. It is the management of assets, including the sale of any assets. Process payments or other distributions to the beneficiaries of the trust fund by an attorney. Proper knowledge of accounting, tax rules, and bookkeeping can make the trust administration process more manageable and less overwhelming and help trustees manage distributions to beneficiaries. A.M.I. CPA Professional Corporation and its team provide over 35 years of business experience for clients in Oakville, Burlington, and surrounding areas.
It is vital to keep detailed records of receipts and disbursement of trust money in a journal and post these transactions to the client’s ledger accounts or other persons to whom the money belongs. Good trusting bookkeeping practices can greatly help when it comes time to file trust tax returns.
With the regulations and professional standards that an attorney must comply with when holding those funds, proper bookkeeping can ensure the attorney does not inadvertently fail to comply with those regulations.
When the time comes to finalize the trust, following a terminating event, proper bookkeeping helps provide final statements to all beneficiaries reflecting that the trustee correctly managed the funds that were in the trustee’s care throughout the life of the trust.
Many attorneys and individual trustees turn to A.M.I. CPA Professional Corporation and its team for help with their trust matters.