How Often Should Trust Accounts Be Reconciled? The Monthly Standard in 4 States
Trust accounts should be reconciled monthly. The ABA model rules treat quarterly reconciliation as the minimum and call monthly the preferred practice, and California and Florida require it every month. Texas and New York do not state a frequency in the rule itself, but State Bar of Texas guidance says monthly.
How often must trust accounts be reconciled under the ABA model rules?
The ABA sets quarterly as a minimum and monthly as the preferred practice. Both come from the ABA Model Rules on Client Trust Account Records.
Rule 1(i) lists copies of monthly trial balances and quarterly reconciliations among the records a lawyer keeps. On the ABA page, "monthly", "quarterly", and the 5 year retention period sit in square brackets. That means each state fills in its own numbers.
The comment to Rule 1 explains why. Quarterly is only the minimum. Monthly is preferred because finding an error across 3 months of activity is hard.
ABA Model Rule 1.15 itself sets no reconciliation frequency. It requires complete records. The records rules fill in the how often.
The ABA model rules are models, not law. Your state's version binds your firm.
How often do trust accounts need to be reconciled in each state?
The table below compares the ABA model with 4 states: California, Texas, Florida, and New York. Rules in this table were read on October 16, 2026, from the editions named below.
| Jurisdiction | Frequency required | What gets compared | Record retention | Other duties |
|---|---|---|---|---|
| ABA model | Quarterly minimum, monthly preferred | Trial balance of all client ledgers against a control balance each month, then reconciled to the bank statement | [5 years] after the representation ends (bracketed, states set their own) | Only a lawyer admitted in the jurisdiction, or someone under that lawyer's direct supervision, may sign or authorize transfers. Withdrawals by check to a named payee (never to cash) or by authorized electronic transfer (Rule 2) |
| California | Monthly | Client ledgers, the account journal, and the bank statement | 5 years after final distribution | From January 1, 2026, each trust account has a designated licensee who performs or supervises the monthly reconciliation. Annual CTAPP registration of all trust accounts, self assessment, and certification |
| Texas | No frequency in Rule 1.15 (formerly Rule 1.14). State Bar guidance says monthly | Bank statement against the check register. The total of all client ledgers should equal the reconciled bank balance (State Bar guide) | 5 years after the representation ends | The rule requires a separate account designated as a trust or escrow account |
| Florida | Monthly (Rule 5-1.2) | Each trust bank account reconciled to the checkbook and journal, then the total of reconciled balances compared to the client ledger cards, with any difference described | 6 years | Annual list of the unexpended trust balance for each client or matter. Annual trust accounting certificate filed June 1 to August 15. The bank must be authorized to notify the Bar of an overdraft |
| New York | Not stated in Rule 1.15 | Rule 1.15 sets no reconciliation requirement. It requires deposit and withdrawal records, bank statements, and checkbooks | 7 years for its required bookkeeping records | No overdraft protection on the special account. Withdrawals to a named payee, never to cash. Entries made at or near the time of the transaction |
2 notes on currency. The table reflects the California rule effective January 1, 2023 and the Texas edition effective March 7, 2025, and it does not reflect any later amendments. For New York it uses the New York State Bar Association's published copy of the rules. Confirm the current text with your state bar before you rely on any cell.
In short: in the 4 states above, where the rule or bar guidance names a frequency, it is monthly.
Why is monthly reconciliation better than quarterly?
The ABA's reason is practical. Errors are hard to find across 3 months of activity.
A quarterly cycle gives a mistake 3 months to sit before anyone looks. A monthly cycle cuts that window to 1 month.
The State Bar of Texas guide adds another reason: it says monthly reconciling discourages embezzlement.
Here is my own practice. I reconcile every trust account monthly, as part of a close that takes 3 to 5 days. Close prep starts 3 days before month end. Any gap gets explained and fixed in the same month, and every reconciliation ties out to the bank statement before I call it done.
I also send client questions as soon as they come up, not after the bank rec.
What does a monthly trust account reconciliation cover?
A monthly reconciliation proves that 3 records agree: the bank statement, the trust account in your books, and the total of all client ledgers.
The ABA comment describes the mechanics. Add up every client ledger balance to get the trial balance. Compare it to a control balance: last month's balance, plus receipts, minus disbursements. Once those match, reconcile to the bank by adding outstanding checks and subtracting deposits the bank has not yet credited. The result should agree with the bank statement.
2 more items belong in the monthly review:
- No client ledger below zero. I tie all 3 records and fix any negative ledger in the same month, even when the bank and the books match.
- Firm money in trust. The ABA model allows the lawyer's own funds in a trust account only to pay bank service charges. A monthly review is the time to confirm nothing else is sitting there. See commingling client funds.
For the procedure itself, see 3 way reconciliation for trust accounts, step by step. The overall picture is in the complete guide to law firm trust accounting.
What happens if you fall behind on trust account reconciliation?
The longer the gap, the harder the errors are to find. That is the ABA's point about 3 months. The ABA comment to Rule 1.15 says books and records should be kept current.
According to the State Bar of Texas, trust account problems are a frequent source of disciplinary cases. I cannot tell you what your state requires you to report, so ask your state bar or ethics counsel.
How do you catch up on missed reconciliations?
- Gather every bank statement since the last month that tied out, plus the receipts and disbursements journals and the client ledgers.
- Start with the oldest month. Each month's control balance builds on the month before, so skipping ahead breaks the chain.
- Rebuild the trial balance and control balance for that month. Then reconcile to the bank with outstanding checks and deposits in transit.
- Write down every difference and the reason for it. An unexplained difference stays open.
- Look for any client ledger below zero. Find which deposit or disbursement caused it.
- Move to the next month only when the current month ties.
Once you are current, hold the monthly cadence. For QuickBooks Online setup, see QuickBooks Online for law firms.
FAQ
Is quarterly reconciliation enough for a trust account?
Only if your state allows it, and even then it is the minimum. The ABA model treats quarterly as the floor and monthly as the preferred practice. California and Florida require monthly, and the State Bar of Texas recommends it.
Who has to reconcile the trust account?
In California, the designated licensee must perform or supervise the monthly reconciliation. The State Bar of Texas guide notes that supervising lawyers answer for their staff. I prepare the monthly reconciliation for the firms I work with, and the responsibility for the account stays with the firm.
Does the bank statement alone count as a reconciliation?
No. The bank statement is 1 of 3 records. A reconciliation compares it to your books and to the total of the client ledgers. Florida requires the comparison to the client ledger cards, with any difference described.
Do I reconcile an IOLTA account the same way as other trust accounts?
Yes. An IOLTA is a pooled interest bearing trust account, so the same reconciliation applies. Florida's monthly rule, for example, covers every trust bank account.
How long do I keep trust account reconciliation records?
It depends on your state. The ABA model uses 5 years in brackets, and California and Texas use 5 years. Florida uses 6 years. New York keeps its required bookkeeping records 7 years. Check your own state's rule.
Trust account rules vary by state. This guide explains common practice under the ABA Model Rules. Check your state bar's rules, and treat this as general information, not legal advice.
If your trust account hasn't been reconciled in a while, or your close keeps slipping, message me on LinkedIn with what you're seeing.
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- ABA Model Rule 1.15: Safekeeping Property
- ABA Comment on Rule 1.15
- ABA Model Rules on Client Trust Account Records, Rule 1: Recordkeeping Generally
- ABA Model Rules on Client Trust Account Records, Comment to Rule 1
- ABA Model Rules on Client Trust Account Records, Rule 2: Client Trust Account Safeguards
- California Rules of Professional Conduct, Rule 1.15
- State Bar of California, Client Trust Account Guidelines for Attorneys
- State Bar of California, Client Trust Account Protection Program (CTAPP)
- Texas Disciplinary Rules of Professional Conduct, Rule 1.15
- State Bar of Texas, Trust Accounts
- State Bar of Texas, A Lawyer's Guide to Client Trust Accounts
- Rules Regulating The Florida Bar, Chapter 5
- New York Rules of Professional Conduct, Rule 1.15 (NYSBA publication of 22 NYCRR Part 1200)
- ABA Commission on IOLTA, Overview