California Just Put One Name on Every Trust Account. The Deadline to Report It Is July 1.
If your firm holds client funds in a trust account, California just changed what "being responsible for it" means on paper, and attorneys in other states should notice even if they never touch a California account.
Effective January 1, 2026, new requirements under California Business and Professions Code section 6091.3 require every attorney client trust account in the state, IOLTA and non-IOLTA alike, to have a named designated licensee. For a solo practitioner, that's automatically you. For a firm, the firm picks one named attorney who must be a signatory or primary account holder on the account, who is responsible for performing or supervising the monthly reconciliation, and who has to be able to answer any other licensee's questions about that account. The State Bar of California's own guidance spells out all three duties directly.
Firms with accounts that already existed before the rule took effect get a one-time window, January 1 through July 1, 2026, to notify their financial institution of who that designated licensee is. After that window, the clock resets to 30 days any time the designated licensee changes, retires, leaves the firm, or becomes ineligible to practice. The banks themselves then have their own new reporting duty: starting in 2026 and annually after, financial institutions have to electronically report trust account and designated-licensee information back to the State Bar.
Why a California rule is worth your attention anywhere
Every state already requires lawyers to safeguard client funds and reconcile trust accounts under some version of ABA Model Rule 1.15. What's different about California's move isn't the reconciliation requirement itself, it's putting one name on it, with a filing deadline, and a bank on the other end checking that the name is current. California is often the state that writes a vague, firm-level obligation into a specific, person-level, date-stamped one, and other large bars tend to study what California does with trust accounting before they write their own next rule. If you run a firm with more than one attorney, the question this rule is really asking, who in this building actually owns the reconciliation, is one every bar will eventually ask in some form, deadline or not.
The part firms get wrong isn't malice, it's drift
Trust account discipline cases rarely start with someone taking money. They start with a reconciliation that slipped a month, then another, while everyone assumed someone else was watching it. A rule that names one person and requires a filing forces the conversation that otherwise happens only after a client complaint or a bar audit: who is actually opening the bank statement every month, checking it against the client ledger, and signing off. If you can't answer that question for your own trust account right now, in any state, that's the actual finding here, not the California filing deadline.
What to do before July 1
If you practice in California: confirm who your designated licensee is in writing, make sure that person is a signatory on every trust account the firm holds, and notify your bank in the window the rule gives you rather than waiting for the bank to ask. If you practice anywhere else: use this as the prompt to write down, today, who reconciles your trust account each month and what happens if that person is out sick, on vacation, or leaves the firm. A one-page answer to that question is worth more than most firms have in writing.
This is also exactly the kind of recurring, paper-heavy compliance task that benefits from a second set of eyes that never forgets to show up. An agent that reads the monthly bank statement and the client ledger, flags a mismatch or a missed reconciliation window, and drafts the worksheet for your designated licensee to review (never files or moves money on its own) turns a rule like this from one more thing to remember into something that's already waiting on your desk each month. See how it works or visit our legal page if trust accounting is one more compliance date competing for your attention.
Sources: State Bar of California, IOLTA Guidelines for Attorneys (Client Trust Account Protection Program); State Bar of California, Client Trust Account Guidelines for Attorneys.