Trust Account Access Is the Weakest Link in Most Client Contingency Plans
Most lawyers who sit down to build a client contingency plan under By-Law 7.1 start with the easy parts: naming an administrator, listing where files are kept, recording bookkeeper contact details. Then they get to trust accounts, fill in the account numbers and institution names, and move on.
That's where the plan quietly breaks down.
What the By-Law Requires
Section 19.2(3)(3) requires your plan to document the location of and the means of obtaining possession or control of all trust and other accounts held in connection with your professional business. The operative phrase is "means of obtaining." It's not enough to list where the accounts are. The plan must document how your administrator actually gets access to them.
For most licensees, that means every trust account, general operating account, e-reg account, and separate interest-bearing trust account needs a documented authority mechanism — a legal instrument that gives your administrator the right to operate the account if you cannot.
Why This Is the Component Most Likely to Fail
The problem is not documentation. It's execution. Your administrator shows up at the bank with a power of attorney, a copy of the client contingency plan, and proof that you're incapacitated — and the bank says no.
This is a real concern, for a few reasons.
Banks have their own requirements. Financial institutions are not obligated to accept a general power of attorney as authority to operate a trust account. Many have their own forms, their own verification processes, and their own risk thresholds. A POA that is perfectly valid under Ontario law may still be rejected at the branch level because it doesn't match the bank's internal procedures.
Trust accounts carry heightened scrutiny. These are not personal chequing accounts. They hold client funds subject to Law Society rules. Banks treat them differently — and some branches have no experience dealing with a client contingency plan activation at all.
The authority mechanism was never tested. The most common failure is the simplest one: the licensee prepared a power of attorney, maybe even had it signed and witnessed, but never confirmed with the bank that it would be accepted. The first time the mechanism is tested is the worst possible time — when the licensee is already incapacitated and the administrator is trying to act.
The Standardisation Gap
The LSO has acknowledged this problem. The Convocation report that accompanied the By-Law 7.1 amendments noted that the LSO is working with the Canadian Bankers Association to establish standardised procedures for trust account transfer to an administrator. Until those procedures are in place, each financial institution's requirements may differ.
That work is still in progress. In the meantime, you cannot assume that your bank will cooperate smoothly. You need to confirm it yourself.
What to Do About It
The fix is straightforward, but it requires a conversation — not just paperwork.
Meet with your bank manager before the plan is finalised. Bring the authority mechanism you intend to use — whether it's a power of attorney for property, dual signing authority, or another arrangement — and ask the bank to confirm, in writing, that they will accept it. Ask specifically about the trust account, not just general accounts.
Ask what the bank needs from the administrator. Some institutions require the administrator to present identification in person. Some require a specific form. Some will want a letter from the LSO confirming the administrator's status. Know what the process is before it needs to be activated.
Know about the LSO Trustee Services letter. The LSO's Trustee Services department has a template letter that confirms to financial institutions that the administrator is a licensed Ontario lawyer or paralegal bound by the Law Society's professional standards. This is not automatic — the administrator must request a signed version through LSO Connects. But it exists, and most lawyers preparing client contingency plans don't know about it. Build it into your activation protocol so the administrator knows to request it if needed.
Document the bank's confirmation in the plan. Once you have the bank's confirmation, note it in the plan: institution, date confirmed, name of the contact, and what was agreed. If the bank changes its procedures later, you'll know to update the plan.
The Bottom Line
A client contingency plan that lists trust account numbers but hasn't confirmed the authority mechanism with the bank is a plan that looks compliant but may not function when activated. The By-Law requires the "means of obtaining" access — and if that means hasn't been validated with the institution that holds the funds, it's a gap.
This is one of the areas where getting the plan right the first time saves significant difficulty later. Your administrator shouldn't have to negotiate with a bank while also trying to notify clients, return files, and contact the LSO and LawPRO. The trust account path should already be clear.
Need Help Getting This Right?
Preserver prepares By-Law 7.1 compliant client contingency plans for Ontario law firms, including trust account authority documentation and guidance on confirming access mechanisms with financial institutions.
Learn more about our client contingency plan services →
Shona Bertrand, Preserver
This post is for informational purposes only and does not constitute legal advice. Licensees are responsible for ensuring their plan meets all applicable requirements of By-Law 7.1.
