Who can and should be a signatory on a trust account?
Establishing a client trust trust account for your law firm means designating signatories. Signatories are able to sign for account-related tasks such as issuing checks or withdrawals from the account.
Before establishing any signatory, consider the significant responsibility entrusted to you with your client trust accounts. Lawyers are obligated to protect the funds and property included in that trust. Any issues that arise out of a misuse of client funds, no matter who the signatory to the account is or who misused the funds, ultimately falls back on the attorney and is their responsibility.
According to the ABA, the preferred set up is to have only one signatory on the trust: the lawyer. This can minimize numerous problems with the trust, but it’s also a lot of responsibility. Moreover, rules vary from state to state on who can be allowed to be a signatory in the first place; many states require the signatory on a client trust account to be an attorney.
If you are considering having a non-lawyer as a signatory on a client trust account, be mindful of the fact you’re asking that person to take on significant fiduciary responsibilities. Most states have ethics rules requiring attorneys to provide sufficient training and supervision over employees that are acting as signatories on a client trust account and handling client funds.
To provide adequate protection, you should consider implementing full criminal background checks for any personnel involved with client trust accounting. Fidelity bonds are suitable for protecting trusts from losses.
You should also consider the fiduciary duty that comes along with handling client funds. You are being entrusted with your clients’ money and/or property. It is your responsibility to ensure that anyone with access to that trust account exercises an appropriate level of care.