Overview
Law App supports both controlled money and investment money accounts. From an accounting software perspective, these are handled identically — the system records receipts, movements, and balances in the same way for both.
This is because the underlying recording requirements are fundamentally the same across all Australian jurisdictions. Both are trust money invested on behalf of the client so the client receives the interest earned. The concepts of controlled money and investment money exist in every state and territory, though the governing legislation differs.
What’s the Difference?
While the recording requirements are the same, the two types differ in how and why the money is directed. The distinction is about the direction of the funds and who initiates the decision.
Controlled Money
Controlled money arises when the client provides a written direction for their funds to be deposited into a separate account rather than the general trust account.
The client initiates this. The money goes directly into a controlled money account in the name of the law practice as trustee for the client.
Investment Money
Investment money is typically a decision made by the firm — for example, when trust money has been held in the general trust account for an extended period.
The firm moves the funds into an investment account to ensure the client’s money earns interest, rather than leaving it sitting idle.
Money Flow – Controlled Money
Money Flow – Investment Money
Legislation by State & Territory
The principles are the same Australia-wide, but the governing legislation and the name of the statutory interest fund differ by jurisdiction. Refer to your state or territory’s requirements below.
| Jurisdiction | Governing Legislation | Interest on General Trust Paid To | Regulator / Law Society |
|---|---|---|---|
| QLD | Legal Profession Act 2007 (Qld) | LPITAF (Legal Practitioner Interest on Trust Accounts Fund) | QLS |
| NSW | Legal Profession Uniform Law (NSW) | Public Purpose Fund (PPF) via Statutory Deposit | Law Society of NSW |
| VIC | Legal Profession Uniform Law (Vic) | Public Purpose Fund (PPF) via Statutory Deposit Account | VLSB+C |
| WA | Legal Profession Uniform Law (WA) | Solicitors’ Guarantee Fund | Legal Practice Board WA |
| SA | Legal Practitioners Act 1981 (SA) | Guarantee Fund (Law Society of SA) | Law Society of SA |
| TAS | Legal Profession Act 2007 (Tas) | Solicitors’ Guarantee Fund | Law Society of Tasmania |
| ACT | Legal Profession Act 2006 (ACT) & Legal Profession Regulation 2007 | Statutory Interest Account (SIA) | ACT Law Society |
| NT | Legal Profession Act 2006 (NT) | Fidelity Fund | Law Society NT |
How This Works in Law App
- Law App records controlled money and investment money using the same accounting processes
- Receipts, movements, and balances are handled identically in the system
- The choice between controlled money and investment money is managed by your firm, not the software
- Your firm determines the direction of funds based on whether the client has given a written direction (controlled) or the firm is investing on the client’s behalf (investment)
Reference
This information is consistent with trust accounting requirements across Australian jurisdictions. The core principles are drawn from the Legal Profession Act 2007 (Qld), the Legal Profession Uniform Law (NSW/Vic/WA), and equivalent legislation in other states and territories. For jurisdiction-specific guidance, contact your local law society or regulatory body using the links in the table above.
