Trust account reconciliation rules by state: attorneys and brokers
Updated · Rotomal
How often you must reconcile depends on the state and on who holds the money. For attorneys, California, Arizona and Iowa require a monthly three-way reconciliation; North Carolina requires a monthly bank reconciliation plus a quarterly three-way report; Illinois and Alabama set quarterly as the minimum, and the Alabama State Bar notes that the comments recommend monthly. For real estate brokers, California, North Carolina, Oregon, Florida and Utah require monthly reconciliation, and Texas requires a monthly accounting to each beneficiary when the account had activity. Each row below links to the rule or the regulator's own guidance.
Attorneys: reconciliation rules by state
| State | Frequency | What must agree | Rule | Link |
|---|---|---|---|---|
| California | Monthly | Account journal, client ledgers plus bank charges ledger, adjusted bank balance; attorney certifies | Rule 1.15(d)(3), (e); Standard (1)(d) | calbar.ca.gov ↗ |
| Arizona | Monthly | Client ledgers, general ledger, reconciled bank statement | Ariz. R. Sup. Ct. 43 | azbar.org ↗ |
| Iowa | Monthly | Bank statement balance, receipts and disbursements journal, sum of client ledgers | Iowa Ct. R. 45.2(3)(a)(9) | legis.iowa.gov ↗ |
| North Carolina | Monthly bank reconciliation; three-way report at least quarterly | General ledger, total of client ledgers, adjusted bank balance; signed and dated | 27 NCAC 02 Rule 1.15-3(d) | ncbar.gov ↗ |
| Illinois | At least quarterly | Journals, client ledgers, checkbook and bank | Rule 1.15A(b)(7) | iardc.org ↗ |
| Alabama | Quarterly; comments recommend monthly | Three-way (bar workbook template) | Rule 1.15(e)(9), as cited by the Alabama State Bar | alabar.org ↗ |
| South Carolina | Monthly | Monthly reconciliations; the opinion also faults a missing trial balance and running client balances | Rule 417, SCACR, as applied in In re Davis (2000) | sccourts.org ↗ |
The Illinois ARDC's own self-audit also asks whether you reconcile monthly, soon after the bank statement arrives, even though the rule's minimum is quarterly.
Real estate brokers: reconciliation rules by state
| State | Frequency | What it requires | Rule | Link |
|---|---|---|---|---|
| California | Monthly, unless no activity | Total of separate beneficiary records reconciled with the trust journal, after a bank reconciliation; more than $200 of broker funds in trust is commingling | Reg. 2831.2 | dre.ca.gov ↗ |
| North Carolina | Monthly | Bank statement, books and property trial balance; keep a worksheet per month | Commission Rule A.0117(e) | bulletins.ncrec.gov ↗ |
| Oregon | Monthly | Adjusted bank balance, journal or register, sum of ledgers; principal broker signs and dates | OAR 863-015-0275 | secure.sos.state.or.us ↗ |
| Florida | Monthly | Written statement comparing total trust liability with reconciled bank balances; broker signs and dates | Rule 61J2-14.012(2) | law.cornell.edu ↗ |
| Texas | Monthly, if any activity | An accounting to each beneficiary of trust money | 22 TAC 535.146(c)(6) | trec.texas.gov ↗ |
| Utah | Monthly | Trust records reconciled with bank records and with client account records | R162-2f-403a(10)(d)-(e) | law.cornell.edu ↗ |
Florida and Utah wording was checked on Cornell LII's copy of the state code; North Carolina's on the commission's own bulletin rather than the rule text.
Retention periods we verified
| State and who | Keep records for | Rule |
|---|---|---|
| California attorneys | Five years after final appropriate distribution of the funds | Rule 1.15(d)(5); Standard (1) |
| North Carolina attorneys | Six years (reconciliations and review reports) | Rule 1.15-3(d), (e), (h) |
| Iowa attorneys | Six years after the representation ends | Iowa Ct. R. 45.2(3)(a) |
| Illinois attorneys | At least seven years after the representation ends (ARDC self-audit) | Rule 1.15A(a), (b) |
| Texas brokers | Four years from the date a document is received or created | 22 TAC 535.146(e) |
What three-way means everywhere
The names differ but the test is the same: on one date, the bank balance adjusted for items in transit, the trust journal or checkbook balance, and the total of the individual client or transaction ledgers must be equal. A bank-to-books match alone is a two-way reconciliation; it can pass while one client's money is paying another client's costs, which is why the ledger total is the third leg.
Not in the table yet
We add a state only after reading the rule, or the regulator's guidance on it, at the source. These are often cited but we have not yet verified them from official text, so they are left out: New Jersey attorneys (Court Rule 1:21-6; the court site blocked our check), Florida attorneys (Rule Regulating The Florida Bar 5-1.2) and Texas attorneys. Check them with the bar directly.
Keeping up when the rule is yours to meet
Whatever the frequency, the record has to exist, agree and carry a signature. Trust Reconciler produces that record monthly from QuickBooks Online or Xero, laid out for your state's rule, which we confirm with you at onboarding.
Questions
Which states require a monthly three-way reconciliation for lawyers?
Of the states we verified, California, Arizona and Iowa; South Carolina also requires monthly reconciliations. North Carolina requires a monthly bank reconciliation and a quarterly three-way report; Illinois and Alabama set quarterly as the minimum.
Is a quarterly reconciliation enough in North Carolina?
Only for the three-way report. Rule 1.15-3(d) also requires the trust balance in your records to be reconciled with the bank statement every month, and reconciliations must be signed, dated and kept for six years.
Do brokers follow the same rules as attorneys?
No. Brokers follow their state real estate commission's rules and attorneys their state bar or supreme court rules. The arithmetic of a three-way check is the same.
Is this legal advice?
No. It is a summary of published rules as of 29 October 2026, not legal or accounting advice. Rules change; confirm with your bar, commission or counsel.
Sources
- State Bar of California: Monthly Trust Account Reconciliation and Review Certification. Source: calbar.ca.gov
- State Bar of California: Rule 1.15 and record-keeping standards (five-year retention). Source: calbar.ca.gov
- State Bar of Arizona: Trust account basics (rev. May 2018). Source: azbar.org
- Iowa Court Rules, chapter 45, client trust account rules (October 2025). Source: legis.iowa.gov
- North Carolina State Bar: Rule 1.15-3, records and accountings. Source: ncbar.gov
- Illinois ARDC: sample record-keeping forms (Rule 1.15A(b)(7), done at least quarterly). Source: iardc.org
- Illinois ARDC: client trust account self-audit. Source: iardc.org
- Alabama State Bar: trust account Excel workbooks (Rule 1.15(e)(9), quarterly). Source: alabar.org
- Supreme Court of South Carolina: In the Matter of Matthew E. Davis, Opinion 25056 (2000). Source: sccourts.org
- California DRE: Ten most common violations found in DRE audits. Source: dre.ca.gov
- NCREC bulletin (February 2017): reconcile trust accounts monthly. Source: bulletins.ncrec.gov
- Oregon Secretary of State: OAR 863-015-0275. Source: secure.sos.state.or.us
- Florida Administrative Code Rule 61J2-14.012 (Cornell LII copy). Source: law.cornell.edu
- Texas Real Estate Commission: trust account FAQs (Rule 535.146). Source: trec.texas.gov
- Utah Admin. Code R162-2f-403a (Cornell LII copy). Source: law.cornell.edu
Guides and answers
- Real estate attorney trust account reconciliation: the monthly three-way check
- CTAPP compliance reviews: what California attorneys need ready
- Real estate broker trust account reconciliation, step by step
- Three-way trust reconciliation when your books are in QuickBooks Online
- Three-way reconciliation checklist: formula, blank form and free templates
- TREC trust account rules for Texas brokers
- Florida broker monthly escrow reconciliation (Rule 61J2-14.012)
- TrustBooks alternatives for firms on QuickBooks: an honest comparison