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Types of Trust Bank Accounts

TRUST BANK ACCOUNTS – SECTION 86 OF THE LEGAL PRACTICE ACT (28 of 2014)

The trust banking of legal practitioners is regulated by Section 86 of the Legal Practice Act (28 of 2014)

TRUST ACCOUNT 

  • Section 86 (1) Every legal practitioner referred to in section 84(1) must operate a trust account.
  • Section 86 (2) Every trust account practice must keep a trust account at a bank with which the Fund has made an arrangement as provided for in section 63(1)(g) and must deposit therein, as soon as possible after receipt thereof, money held by such practice on behalf of any person. –  Interest accrued must, in the case of money deposited in terms of this subsection, be paid over to the Fund and vests in the Fund,
    • 100% of trust interest earned, less approved recoverable bank charges, will be paid monthly to the Fund as provided for by Rule 54.14.16.1 made under the authority of Section 95 (1) of the Legal Practice Act, 28 of 2014.

 

TRUST SAVINGS AND OTHER INTEREST-BEARING ACCOUNT

  • Section 86 (3) A trust account practice may, of its own accord, invest in a separate trust savings account or other interest-bearing account any money which is not immediately required for any particular purpose. –  Interest accrued  must, in the case of money deposited in terms of  this subsection, be paid over to the Fund and vests in the Fund
    • 100% of trust interest earned will be paid on an annual basis to the Fund as provided for by Rule 54.14.16.3 made under the authority of Section 95 (1) of the Legal Practice Act, 28 of 2014

 

TRUST SAVINGS AND OTHER INTEREST-BEARING ACCOUNT

  • Section 86 (4) A trust account practice may, on the instructions of any person, open a separate trust savings account or other interest-bearing account for the purpose of investing therein any money deposited in the trust account of that practice, on behalf of such person over which the practice exercises exclusive control as trustee, agent or stakeholder or in any other fiduciary capacity. – Interest accrued on money deposited in terms of this section must, in the case of
    money deposited in terms of this  subsection, be paid over to the person referred to in that subsection: Provided that 5% of the interest accrued on money in terms of this paragraph must be paid over to the Fund and vests in the Fund.

    • With effect from 1 March 2019, 5% of the trust interest earned will be paid monthly to the Fund in terms of section 86(5) and as provided for by Rule 54.14.16.4 made under the authority of Section 95 (1) of the Legal Practice Act, 28 of 2014