FAC 1503 ASSIGNMENT 2

A trust bank account should never be in overdraft. A debit on a trust creditor account would mean the account is overdrawn which is not permitted In terms of the Rules for the Attorneys’ Profession (the Rules) with regard to the transfer of trust funds from the trust bank account to the business bank account, a legal practice shall ensure that the balance on its trust bank account shall at any date be equal to or exceed the total credit balances of the trust creditors in its accounting records. Page 110 in Study guide Trust creditor account balance 7 600 Less: amount earmarked for other matters (2 800) Amount avaliable 4 800 The transfer is limited to the amount available in the trust account Page 126 & 129 in study guide 100% of section 78(2)(A) interest must be paid to the Legal practitioner's Fidelity Fund (page 126 in study guide) It should bear the Trust creditor's name, The relevant section and the name of the bank Investments made in accordance with section 78 are the only trust creditors’ accounts thatmay reflect debit balances (Page 137 in study guide) 95% of 86(4) interest must be paid to trust creditor and 5% to the Fidelity Fund Trust creditor (2 700 x 95%) 2 565 Legal Practitioners Fidelity Fund 135 S Monte – section 86(4) trust investment – Unit Bank 1 June 2018 Trust bank 50 000 31 Aug 2018 Trust Bank 52 700 31 Aug 2018 Interest 2 700 52 700 52 700 The question asked for the August transactions The 10% is limited to R1 000 per collection Sheriffs fees are exempt (Page 31 in study guide) Fees for receiving instruction 220 Correspondence 130 Collection fee 1 000 1 350 1/3 share of fees (1 350/3) 450 Instructing attorney is entitled to 1/3 fees The full amount of the collection is credited to the trust creditor's account Mamani is the plaintiff