Matter-Matter Trust Transfers

Jurisdiction: Country: Canada | Province or State: Alberta

What is a Matter-Matter Trust Transfers?

A Matter-Matter Trust Transfer is a firm form you complete to move client trust funds from one matter file to another matter file within your firm. It documents the source matter, the destination matter, the amount, the reason for the move, and who authorized it. You use it when no money leaves your trust bank account. Instead, you re-allocate funds between two trust sub-ledgers. The bank balance stays the same. Your matter trust ledgers change.

You typically see this form in law firms that handle more than one file for a client. Lawyers, legal assistants, bookkeepers, and trust accountants use it daily. You might be a lawyer moving a retainer from an intake file to an active file. You might be a bookkeeper reallocating a surplus from a completed matter to a new, related matter. You might be a legal assistant moving a deposit tied to a transaction that shifted to a different file.

You need this form to keep accurate books and records in Alberta. It creates a clear audit trail showing exactly why funds moved and who approved the move. It also helps you show client authorization, if required. Without the form, your ledgers will not tell the full story. That can cause audit issues and client concerns.

Typical usage scenarios

• A corporate client may fund a general retainer under one file. You later open a litigation file for the same client. You transfer part of the retainer to the litigation file with written authority.
• In real estate, a buyer deposit may sit in a holding file while conditions are pending. When conditions clear and you open the conveyance file, you move the deposit to the active matter.
• In family law, a client might start with a consultation matter. After signing a retainer for a divorce matter, you move some of the original trust funds to the new file based on their written direction.

You should not use this form to pay invoices or disbursements. Use a trust-to-general transfer or trust cheque for that. You also should not use this form to send money outside the firm. That requires a trust payment instrument. A matter-matter transfer only re-allocates funds between two matters on your books.

When Would You Use a Matter-Matter Trust Transfers?

You use a Matter-Matter Trust Transfer when you hold trust funds that now belong, in whole or in part, to a different matter file than the one that received them. This usually follows a change in scope, a change in file structure, or a planned workflow step.

Suppose a client wires a $10,000 retainer to a general “Client – Intake” matter. You later open a specific “Client – Share Purchase” matter. The client authorizes you to apply $7,500 of the retainer to that file. You complete this form and transfer $7,500 from the intake matter trust ledger to the share purchase matter trust ledger.

Consider a litigation client with two related actions. The client pays a deposit for expert fees into Matter A. The expert is now engaged under Matter B. With clear client authority, you transfer the earmarked amount to Matter B. The bank remains unchanged. The trust sub-ledgers reflect the movement.

In real estate, a developer may supply a large deposit to your pooled trust to secure multiple parcels. You open one file per parcel. As each parcel moves to closing, you transfer the relevant portion of the deposit to the active parcel file. You document the movement and the tie-back to the deposit.

You may also use the form when you clean up your ledgers. A matter closes with a small surplus that must be used for a client’s related file. The retainer agreement allows it. You move the surplus to the new file and record why. Alternatively, a matter closes and you discover a deposit was posted to the wrong file. You correct the mistake with a transfer form and clear notes. You keep the supporting emails and receipt numbers with the form.

Typical users

• Responsible lawyers who must approve the movement
• Legal assistants who prepare the form
• Bookkeepers who post it to the accounting system
• Office managers may also sign where your internal policy requires it.

The client’s role is to provide written direction when you move funds between unrelated matters or between different clients. The client may also confirm re-allocation permitted by the retainer.

You should not use this form if the funds carry trust conditions or undertakings tied to a specific matter. For example, a deposit held on strict terms for a tender or settlement should not move to any other file unless the written conditions allow it. If you do not have clear authority to move the funds, hold them where they are or return them as required.

Legal Characteristics of the Matter-Matter Trust Transfers

The form itself is not a contract. It is a mandatory accounting record that supports your trust books in Alberta. It is legally significant because it records the internal trust movement and the authority for that movement. It demonstrates that you manage client property with care and transparency. Auditors and the court rely on these records to test compliance and reconstruct events.

Its enforceability rests on two pillars. First, the underlying authority must exist. You need a retainer that permits re-allocation, or a specific client direction. If funds came with trust conditions, you must follow those conditions. Second, the transfer must be complete, accurate, and timely. The entry must debit one trust ledger and credit another for the same amount on the same date. The reason must be clear and credible. The supporting documentation must be attached and preserved.

What ensures enforceability?

Your process discipline. You use a unique transfer number. You capture the source matter, destination matter, client names, and amounts. You cite the source receipt or deposit reference. You state the reason in plain language. You attach the client’s written direction or retainer clause. You obtain approval from the responsible lawyer. You post the entry the same day or as soon as possible. You keep the form and attachments with both matters and in your trust transfer file.

General legal considerations in Alberta include several core rules. Do not transfer one client’s trust funds to another client’s matter without clear written consent and a proper purpose. Do not use trust funds from any matter to solve a shortfall in another matter. Do not backdate entries. Do not transfer funds subject to undertakings or explicit restrictions. Do not transfer more than the available balance. If a trust receipt was reversed or is under dispute, resolve that first. If you discover an error, fix it with a new dated entry and a note, not by overwriting history.

You must also protect client confidentiality. The form contains client names, matter descriptions, and financial data. Store it securely. Limit access to authorized staff. Retain the record for the period required under Alberta rules. Be prepared to produce it during an audit, together with the supporting trail.

Finally, remember that a matter-matter transfer does not move money in your bank. It is a ledger re-allocation. That is why accuracy matters. If you post only one side, your trust listings will not balance. Your monthly reconciliation will fail. The form helps you avoid that by forcing a complete, two-sided entry.

How to Fill Out a Matter-Matter Trust Transfers

Follow these steps to complete the form correctly the first time.

1) Confirm you should use this form

• Ask yourself: Are you moving trust funds between two matters within the firm, with no bank movement? If yes, use this form.
• If you need to pay an invoice or a third party, stop. Use the proper trust payment process instead.
• If funds are under trust conditions that don’t allow re-allocation, stop. Get written consent or follow the conditions.

2) Gather the required documents

• Pull the retainer letter(s) for both matters.
• Obtain the client’s written direction if the retainer does not cover the transfer.
• Print the trust receipt(s) for the original deposit.
• Collect any email or letter that explains why the funds belong to the destination matter.
• Have the current trust ledger listings for both matters handy.

3) Complete the header

• Enter the form title, your firm name, and your office location.
• Add the date you are preparing the form. Use the actual date.
• Assign a unique transfer number. Follow your firm’s numbering sequence.

4) Identify the source matter

• Enter the source matter name and file number exactly as in your system.
• Add the client name as shown on the file.
• Specify the source trust ledger reference (e.g., “Trust Ledger: Client – Intake”).
• Record the current trust balance on the source matter before the transfer. This helps prevent overdrafts.

5) Identify the destination matter

• Enter the destination matter name and file number exactly as in your system.
• Add the client name for that file. If the client is different, pause and confirm you have explicit written authority and that the move is permitted.
• Specify the destination trust ledger reference.

6) State the amount and currency

• Enter the amount in Canadian dollars. If the funds are in another currency, note the currency, the exchange rate applied, and how you handled any variance. Where possible, avoid cross-currency moves in trust by converting only through approved methods.

7) Explain the reason in plain language

• Write a clear purpose line, for example: “Reallocating portion of general retainer to Litigation Matter per client email dated May 2.”
• Avoid vague terms like “adjustment” without context.
• If funds are earmarked for a specific expense (e.g., appraisal fee), say so.

8) Cite the authority

• Point to the exact retainer clause that allows re-allocation, or attach the client’s written direction.
• If you rely on an email, print it to PDF, show the sender, date, and content.
• If funds were received with a memo that directs how to use them, include that memo.

9) Reference the original deposit(s)

• List the trust receipt number(s), date(s), and amount(s) that funded the source balance.
• If the transfer involves multiple receipts, break down the amount by receipt if your system requires it.
• This creates a clean chain from receipt to transfer.

10) Confirm available balance and holdbacks

• Check the source matter for any holds, undertakings, or earmarked amounts. Do not move funds that are restricted.
• Ensure the source matter has at least the transfer amount available after any holds.
• Note any holdbacks in the form or attach a schedule.

11) Obtain internal approvals

• The preparer signs and dates the form.
• The responsible lawyer for the source matter reviews and signs. They confirm the authority and purpose.
• If your firm requires it, obtain a second sign-off (e.g., accounting manager).
• Print names beneath signatures for clarity.

12) Attach supporting documents

• Attach the client direction, retainer extract, trust receipt(s), relevant emails, and any undertakings that show permissibility.
• If attachments are lengthy, prepare a short schedule that lists each document and page count.
• Mark confidential material as needed per firm policy.

13) Post the entry in your accounting system

• Post a debit to the source matter trust ledger for the transfer amount on the form date.
• Post a credit to the destination matter trust ledger for the same amount and date.
• Use the same narrative in both entries, matching the form reason.
• Do not post any bank entry. This is a ledger-only movement.

14) Verify the postings

• Run updated trust ledger listings for both matters. Confirm the amounts and narratives match the form.
• Confirm the firm’s trust listing still balances to the trust bank account total. It should, as no bank movement occurred.
• If your system uses batch controls, print or export the batch report and attach it.

15) Notify stakeholders

• Send a brief note to both responsible lawyers confirming the transfer, amount, and reason.
• If your client expects confirmation, send a short client update. Keep it simple: amount, from/to matter, reason, and date.
• Record the notifications in the file.

16) File and retain

• Save the signed form and attachments to both matter files and to your central trust transfer register.
• Use consistent naming, such as “TT-2025-0043 Matter-Matter Transfer – Source to Destination – $7,500 – 2025-05-14.”
• Retain the record for the required period under Alberta rules.

17) Common pitfalls to avoid

• Do not transfer to cover a negative balance caused by error or premature payment. Fix the root cause instead.
• Do not split an amount across dates to make it “fit.” Use the correct date and explain variances.
• Do not rely on oral client consent. Get it in writing.
• Do not ignore trust conditions or undertakings that restrict use.
• Do not exceed the source matter’s available balance.

18) Use schedules when detail is heavy

• If the transfer pulls from multiple receipts, add Schedule A with a receipt-by-receipt breakdown.
• If multiple destination matters receive allocations, add Schedule B showing the split and totals.
• If authority is complex, add Schedule C with the relevant retainer clauses highlighted.

19) Special scenarios

• Same client, different matters: A retainer letter may allow re-allocation among that client’s files. Cite it and proceed with this form.
• Different clients, linked matters: Only move funds if you have explicit written consent and a lawful basis. Document it carefully. If unsure, seek direction before proceeding.
• Error correction: If a receipt was posted to the wrong matter, use this form to correct it. Explain the error and attach the original receipt and the correction note.

20) Final review checklist

• Is the reason clear and specific?
• Do you have written authority on file?
• Do the source and destination entries match in amount and date?
• Are all signatures and printed names present?
• Are the attachments complete and legible?
• Have you notified the right people?

If you follow these steps, you will create a defensible, complete record of the transfer. Your ledgers will stay accurate. Your audit trail will be clear. And your client will understand how their funds were used.

Legal Terms You Might Encounter

• Trust account. This is the bank account where you hold client money. It is not the firm’s money. Your transfer moves funds within that trust account from one matter record to another. The form documents that movement and why it happened.
• Matter trust ledger. Each matter has its own trust ledger. It shows all deposits, transfers, and withdrawals for that file. Your form entry updates the ledger for both matters. The transferor ledger decreases, and the transferee ledger increases.
• Transferor matter. This is the matter that currently holds the funds. You will list it as the source on the form. Confirm the client, matter number, and balance before you move anything.
• Transferee matter. This is the matter that will receive the funds. You will list it as the destination on the form. Confirm the client, matter number, and the purpose for receiving the funds.
• Client authorization. This is written direction from the client about their money. It can be a retainer agreement, email, or signed instruction. Your form should align with the authorization. If moving funds between different clients, you usually need express authorization.
• Trust purpose or condition. This is the reason the funds were deposited and any limits on their use. It could be a retainer for fees, a purchase price holdback, or a settlement condition. The transfer must respect the purpose or condition. If the purpose changes, get updated written direction.
• Narrative or reason for transfer. This explains why you are moving the money. Keep it specific and factual. For example: “Reallocate initial retainer to litigation matter per client email dated [date].” The form’s narrative creates the audit trail.
• Unbilled fees and disbursements. These are costs not yet invoiced to the client. You usually cannot pay fees from trust until you issue a bill. A matter-to-matter transfer does not replace billing. Use this form to reallocate trust funds, not to pay fees.
• Source document. This is the document that supports the transfer. Examples include a client email, a retainer clause, or a reconciliation note showing error correction. Attach or reference the source document on the form.
• Trust reconciliation. This is the process of matching trust ledgers to bank statements and listings. Your transfer must appear on both the transferor and transferee ledgers. It should reconcile with the bank activity and the matter listings.
• Residual balance. This is a small amount left in trust after work ends. Use the form to move a residual balance to the correct matter for final billing or refund processing. Record who authorized the use of any leftover funds.

FAQs

Do you need client consent to transfer trust funds?

Yes, if the transfer changes the matter or the purpose of the funds. For the same client across two matters, you still need clear written direction. For different clients, obtain written authorization from each client. Keep the authorization with the form.

Do you transfer trust funds to pay your fees?

Only after you deliver a bill and have authorization. A matter-to-matter transfer moves funds within trust. It does not pay your invoice. If your goal is to pay fees, issue the bill first. Then handle the payment according to your policy.

Do you need to notify the client about the transfer?

You should. Include the transfer on the client’s trust activity statement. If the transfer affects how their funds will be used, send a short notice. Clarity reduces questions and complaints.

Can you transfer funds held under a trust condition or holdback?

Not until the condition is met or amended in writing. If the receiving matter has a different purpose, get updated instructions first. Attach those instructions to the form.

What if you discover an old allocation error?

You can correct it with a transfer. Write a clear narrative that names the error and its date. Attach the supporting email or reconciliation note. Make sure the ledgers now reflect the original intended allocation.

Can you transfer between pooled and separate trust accounts using this form?

You can record a move between a pooled trust matter and a separate interest-bearing matter for the same client. Use the form to capture the reason and authority. Confirm account types and any interest implications before you move funds.

Do you need two signatures on the form?

Many firms require dual approval for trust movements. Check your policy. If two signatures are required, do not post the transfer until both sign. Keep the signed form with your trust records.

How detailed should your reason be?

Be specific and brief. State the business purpose, the client direction, and any related file reference. Avoid vague phrases like “to correct” without context. A clear reason protects you in an audit.

Checklist: Before, During, and After the Matter-Matter Trust Transfers

Before signing

• Confirm the transfer is necessary. Consider billing instead if paying fees.
• Verify the client identity for both matters. Match names exactly.
• Confirm matter numbers and file titles. Check both in your system.
• Check available trust balances on the transferor matter. Leave enough to meet any conditions.
• Gather written authorization. Use a retainer clause, client email, or direction letter.
• Identify the purpose for the funds on each matter. Ensure the purpose allows the movement.
• Collect supporting documents. Include invoices, settlement terms, or reconciliation notes.
• Check interest implications if a separate trust account is involved.
• Review internal approval requirements. Confirm who must sign.
• Confirm date of transfer and posting period. Avoid backdating unless your policy allows and you keep a clear record.

During signing

• Verify transferor matter details: client name, matter number, and description.
• Verify transferee matter details: client name, matter number, and description.
• Confirm the exact amount. Avoid round-number guesses.
• Specify the currency if your firm handles more than one.
• Write a clear reason for transfer. Name the authority and date.
• Reference the source document by title and location.
• Note any conditions or restrictions that still apply after transfer.
• Check the signature blocks. Ensure required signers sign and date.
• Review totals again before finalizing.
• Confirm the form will be stored with both matters, not just one.

After signing

• Post the transfer in your accounting system on the proper date.
• Attach the form and source documents in both electronic files.
• Update the trust ledgers for both matters. Verify the entries post correctly.
• Reconcile the transfer against the day’s trust activity.
• Issue updated trust activity statements to the affected client(s).
• Notify responsible lawyers for both matters. Include a short summary.
• If the transfer corrects an error, add a file note explaining the fix.
• Set a follow-up to review any remaining balances.
• Retain the form per your firm’s retention schedule.
• Prepare a revised plan for billing or refund, if the transfer supports that next step.

Common Mistakes to Avoid

Moving money between different clients without written authority

• Consequence: Audit exceptions, client complaints, and regulatory scrutiny. Don’t forget to obtain clear written consent from each client. File that consent with the form.

Using a transfer to pay fees without issuing a bill

• Consequence: Breach of trust handling rules and discipline risk. Don’t use this form to pay yourself. Bill first, then handle payment.

Entering the wrong matter number or client name

• Consequence: Misapplied funds and reconciliation delays. Don’t rely on memory. Cross-check the file numbers and names before you sign.

Providing a vague or missing rationale

• Consequence: Weak audit trail and questions from reviewers. Don’t write “administrative transfer.” State the exact reason and the authority.

Skipping supporting documents

• Consequence: Inability to prove authority or purpose later. Don’t forget to attach the client direction, retainer clause, or reconciliation note.

What to Do After Filling Out the Form

Submit for internal approval

• Send the completed form to the required signers.
• Hold the posting until all approvals are recorded.
• Confirm any dollar thresholds that require extra approval.

Post the accounting entry

• Record the transfer in the accounting system on the agreed date.
• Use the same narrative as the form.
• Link the entry to both matters so it appears on both ledgers.

Reconcile and verify

• Check that the transfer reduces the source matter correctly.
• Check that it increases the destination matter correctly.
• Confirm the daily trust reconciliation balances.
• If the transfer fixed an error, confirm no duplicate entries exist.

Notify stakeholders

• Send a short confirmation to the responsible lawyer(s).
• If appropriate, notify the client. Include the reason and amount.
• Update any task lists for related work, such as billing or refunds.

Handle amendments or reversals

• If you posted the wrong amount, prepare a correcting transfer.
• If authority changes, obtain new written direction before any change.
• Document the reason for the amendment. Attach it to both files.

Plan the downstream steps

• If the destination matter needs funds for a near-term payment, prepare the payment checklist now.
• If the transfer supports future billing, schedule the invoice.
• If a residual balance remains, plan for refund or final distribution.

Store and retain

• File the signed form and all attachments in both matters.
• Ensure the documents are searchable by matter number and date.
• Follow your firm’s retention and destruction policies.

Audit readiness

• Keep a clean trail: authorization, form, posting, reconciliation, and notices.
• Save emails or notes that explain the business reason.
• Maintain consistency across the form, the ledger, and the client statement.