3.  Withdrawals

Generally, the only way to pay money from the trust account is by using a cheque made payable to the person to whom the money is to be paid [Rule 5-44(1)(c)]. There are only a few narrow exceptions regarding cash refunds, wire transfers and bank drafts which are discussed below.

a)  Trust Cheques

The cheque used to withdraw money from the pooled trust account must have pre-printed numbers on the cheque stock, and the cheques are to be used in sequential order [Rule 5-44(1)(c)].

In addition, a trust cheque must be fully completed before it is signed, and cannot be post-dated [Rule 5-44(1)(f)].

Under no circumstances should a blank trust cheque be signed.

b)  Wire Transfers

Wire transfers are NOT the same as e-transfers. Wire transfers are done between financial institutions. e-Transfers can be done by anyone with that option on their account and with any computer or smartphone. Interac is a common company that facilitates e-transfers. You are not permitted to make an e-transfer out of the pooled trust account.

There may be situations where use of a wire transfer would be better than a cheque to withdraw money from the pooled trust account. This is one of the rare exceptions to the rules requiring cheques. Although advantageous, their use also raises some concerns about the security of the money, so there are specific steps that must be taken by the member both prior to and subsequent to execution of a wire transfer.

See Practice Direction 03-02 Wire Transfers – Requirements and Fraud Prevention.

Members wanting to send a wire transfer must first read the Practice Direction and then log into the member’s portal on the Law Society’s website.

When logging in, the member will be asked to confirm the various steps outlined in the Practice Direction have been taken.

Assuming all steps are followed, a confirming response will be received by the member (and by the audit department as well), after which the wire transfer may proceed.

Members who need to perform wire transfers on a regular basis due to the nature of their practice can contact the audit department of the Law Society to discuss the possibility of special authorization to perform wire transfers without prior contact with the Law Society for each one executed.


Wire transfers, both received and sent, are particularly vulnerable to fraud. Ensure that you are aware of the types of fraud attempts and how to prevent them.

c)  Bank Drafts

There are some cases where it may seem better to use a bank draft instead of a trust cheque to send trust money. Sending estate money to a beneficiary located outside of Canada is a common example of the desire to use a bank draft or a wire transfer. A bank draft, when used, must be purchased with a trust cheque at your savings institution. However, there are a number of special considerations when using a bank draft, including:

a)  Money is immediately withdrawn from the trust account when a draft is purchased, compared to a cheque where the money does not leave your bank account until the cheque is received and cashed.

b)  Once the draft is purchased, it becomes more like cash than a cheque. The draft generally cannot be cancelled without the return of the original bank draft or potentially with a bond of indemnity which would transfer responsibility for the original draft back to the firm if it is ever presented for payment at a bank after a replacement has been issued. By contrast, you can generally place a stop payment on a cheque, with the terms of such a process varying among savings institutions.

c)  Drafts which remain uncashed after 10 years are generally paid over by the savings institution to the Bank of Canada, whereas stale cheques can be cancelled, a stop payment issued, and the money remains under the control of the law firm.

In situations where a draft is still the preferred method of payment, the Law Society requires firms to clearly indicate in the accounting records that a draft was purchased and the name of the end recipient of the draft (as opposed to just showing the name of the savings institution that converted the trust cheque to a draft). A copy of the draft should also be kept in both the client file and the monthly accounting records.

The Law Society also recommends advising the end recipient of the importance of securing and promptly negotiating the draft. Firms should also safeguard the delivery of the draft in some manner, such as by courier, registered mail or some other secure method where a signature is required by the recipient.