What is required for documentation of disbursements from trust accounts?

Verification of payment purpose is essential for documenting disbursements from trust accounts because it ensures that funds are being correctly allocated according to the intended purpose of each transaction. Trust accounts hold client funds which must be managed in compliance with legal and regulatory standards. By verifying the payment purpose, licensees can maintain a clear record that demonstrates the funds are used appropriately—for example, paying for repairs, closing costs, or other services related to the property or transaction. This level of documentation protects both the client and the licensee by providing a transparent record that can be audited, if necessary, ensuring accountability and adherence to ethical practices in real estate transactions.