Interest on Lawyers’ Trust Accounts is known by its acronym as IOLTA. It is a method of raising money, primarily for providing legal services to those unable to afford it.
Rule 1.15 requires that attorneys who handle money belonging to their clients, including settlement checks, fees advanced for services not yet performed or money to pay court fees, deposit the funds in one or more clearly identifiable trust accounts.
If the amount is large or the funds are to be held for a long period of time, the attorney must place the money at interest for the benefit of the client. However, if the client funds are not capable of earning income for the client in excess of the costs of securing such income, then they are pooled in a single account with similar funds of other clients.
The interest generated by the IOLTA accounts is collected by the Trust Fund Program and distributed to about 100 nonprofit legal aid organizations that provide civil legal aid to indigent people.
Under amended Business and Professions Code sections 6091.2, 6212, and 6213 effective Jan. 1, 2008, the law requires California lawyers to place IOLTA accounts only at financial institutions that pay interest rates or dividends to IOLTA customers comparable to rates paid to similarly situated non-IOLTA customers.
For more information about becoming an IOLTA-eligible financial institution, please email firstname.lastname@example.org or call 415-538-2252 to request the following documents:
For questions, email email@example.com or call 415-538-2252.