Do I need to keep original canceled checks for compliance purposes?

CosmoLex Team

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Rule 1.15 of the American Bar Associations’ model requires lawyers to keep complete records for trust accounts. As part of this, lawyers should be prepared to keep supporting documentation for all transactions and balance amounts.

When acting as a fiduciary for client funds[1], part of that responsibility requires lawyers to be able to substantiate their books, reconciliations, and transactions. Should there be an audit, all documentation should be available in order to provide a clear trail to support all financial records and balances.

As to whether or not these documents need to be originals in regard to canceled checks, many jurisdictions still require original copies to be kept of canceled checks. At the very least, you should always keep an electronic copy of any canceled checks to maintain audit-ready books.

There are states that are exceptions to this rule. For example, in Virginia, under Rule 1.15(c)(3) if the bank provides electronic confirmation of checks[2] written on the account, then there is no requirement to keep original canceled checks.


References

1. Lawyers and Other People’s Money
2. Trust Account Guidelines for Lawyers Adapt to Electronic Banking