Key Takeaways
- Responsible brokers must maintain a trust or escrow account at a federally-insured financial institution in Wyoming
- All client funds must be deposited by the first banking day after receipt unless otherwise agreed in writing
- Trust accounts must be labeled with the word "trust" or "escrow" in the account name
- Commingling broker funds with client funds is strictly prohibited
- Monthly reconciliation of trust accounts is required and must be maintained for inspection
Wyoming Trust Account Requirements
Wyoming responsible brokers must maintain trust accounts to hold client funds separate from their operating funds.
Trust Account Basics
What is a Trust Account?
A trust account (also called an escrow account) is a bank account where responsible brokers hold funds belonging to others:
| Fund Type | Examples |
|---|---|
| Earnest money deposits | Buyer's good faith deposit |
| Security deposits | Tenant deposits on rentals |
| Rent collections | Collected on behalf of landlords |
| Advance fees | Collected before services performed |
| Other client funds | Any money belonging to others |
Where to Open
Trust accounts must be at:
- A federally-insured financial institution
- Located in Wyoming
- Any type: checking, demand, passbook, or statement account
Account Naming Requirements
| Requirement | Details |
|---|---|
| Must include | Word "trust" or "escrow" |
| Maintained in name of | Responsible Broker |
| Withdrawal type | Must permit immediate withdrawal |
Key Requirement: The account name must be identified by the word "trust" or "escrow."
Deposit Requirements
Timeline
| Situation | Deposit Deadline |
|---|---|
| All money belonging to others | First banking day after receipt |
| Unless | All parties agree otherwise in writing |
Alternative: Funds Holder
Instead of maintaining their own trust account, a responsible broker may use a designated funds holder as an alternative.
Proper Deposits
All client funds must be deposited into the broker's trust account—not:
- Salesperson's personal account
- Broker's operating account
- Any other non-trust account
Critical Rule: Salespersons cannot hold client funds. Only responsible brokers maintain trust accounts.
Money Subject to Trust Account Rules
Money belonging to others includes but is not limited to:
| Source | Example |
|---|---|
| Purchase transactions | Earnest money |
| Property management | Rent, security deposits |
| Advance fee contracts | Fees collected before services |
| Lease contracts | Tenant deposits |
| Future investments | Funds held for later investment |
Prohibited Practices
Commingling
Commingling is mixing client funds with broker's personal or business funds. It is strictly prohibited.
| Allowed | NOT Allowed |
|---|---|
| Client funds in trust account | Client funds in operating account |
| Small broker deposit to maintain account | Large broker funds in trust account |
| Interest earned (per agreement) | Using client funds for business expenses |
Conversion
Conversion is using client funds for unauthorized purposes. It is a serious violation that can result in:
- License revocation
- Criminal charges
- Civil liability
- Payment from Recovery Fund
Commission Disbursement
| Rule | Details |
|---|---|
| Earned commissions | Must be withdrawn promptly |
| Licensee fees | Cannot be paid directly from trust account |
| When earned | Only after transaction consummated or terminated |
Important: A licensee is not entitled to earnest money or compensation until the transaction has been consummated or terminated.
Record Keeping Requirements
Required Records
Brokers must maintain:
| Record | Description |
|---|---|
| Account journal | All receipts and disbursements |
| Transaction ledger | Records for each transaction |
| Bank statements | Monthly statements |
| Reconciliation worksheets | Monthly proof of agreement |
| Deposit records | Documentation of each deposit |
| Check records | Documentation of each disbursement |
Transaction Ledger Details
Each transaction ledger must show:
- Names of both parties (buyer/seller or landlord/tenant)
- Dates and amounts received
- Address and description of real estate
- Date, payee, check number, and amount of disbursements
Reconciliation Requirements
Wyoming requires monthly reconciliation of trust accounts:
What Must Agree
| Element | Must Match |
|---|---|
| Cash balance in account journal | Bank balance |
| Sum of all ledger balances | Bank balance |
| Bank account balance | Both of above |
Reconciliation Worksheet
The reconciliation worksheet must:
- Be maintained in hard copy or electronic form
- List each beneficiary's ledger balance
- Be available for inspection
- Be prepared monthly
Exception to Monthly Reconciliation
| Exception | When Allowed |
|---|---|
| No banking activity | No reconciliation required for that month |
Withdrawal Rules
When to Withdraw
| Situation | Action |
|---|---|
| Money due to broker | Withdraw promptly |
| Disputed funds | Follow dispute procedures |
| Closing proceeds | Disburse per closing instructions |
Cooperative Transactions
In cooperative transactions between different brokerages:
| Situation | Handling |
|---|---|
| Buyer's broker receives earnest money | Deliver to listing broker for deposit |
| Cash or check | Goes to listing broker's trust account |
| Promissory note | Listing broker holds it |
| Unless | All parties agree otherwise in writing |
Interest on Trust Accounts
| Feature | Wyoming Rule |
|---|---|
| Interest bearing | May or may not be |
| Interest disposition | As agreed in writing by all parties |
| Default | If no agreement, check company policy |
Advance Fee Requirements
For money collected before services are performed:
| Requirement | Details |
|---|---|
| Deposit in trust | Required until services performed |
| Withdrawal | Only for actual expenses or after services rendered |
| Accounting | Full itemized accounting within 20 days of any withdrawal |
By when must a Wyoming responsible broker deposit client funds into a trust account?
What word must appear in the name of a Wyoming real estate trust account?
How often must Wyoming responsible brokers reconcile their trust accounts?