What does not get deposited into a trust account?

• A. Settlement funds received by another party to be held on behalf of a client
• B. Money advanced to the paralegal on account of fees for future services
• C. Money held for a potential settlement offer on a client's direction or order
• D. Money for disbursements that have been made on account of the client's matter

Answer: (D)

Funds held in a trust account are those that belong to clients or third parties and are kept separate from the firm’s own money until they’re used for their intended purpose. Money received as a retainer or advance for future services, and funds to be held for a potential settlement on the client’s direction, are classic examples of amounts that belong in trust because they’re intended to be paid out or applied for the client later. Likewise, settlement funds received to be held on behalf of a client are held in trust until they’re disbursed.

Disbursements that have already been paid on behalf of the client, however, are not deposited into the trust for safekeeping. Those funds have already left the trust to pay third parties and are treated as client expenses charged or reimbursed, not as money to be held for future use.