Client Trust Accounting & IOLTA

Client Trust Account Protection Program Client Trust Accounting Resources IOLTA Guidelines for Attorneys

California Rules of Professional Conduct, 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.

Any lawyer who handles client funds that are too small in amount or held too briefly to earn interest for the client must participate in the Interest on Lawyers’ Trust Accounts (IOLTA) program. IOLTA accounts can only be kept at approved financial institutions. The interest earned from pooled IOLTA benefits nearly 100 nonprofit legal service organizations throughout California. IOLTA increases access to justice for individuals and families living in poverty and improves our justice system.

Client funds that can earn revenue for the client in excess of the costs to hold those accounts must be deposited into a non-IOLTA trust account such that all interest accrues for the benefit of the client. The client’s taxpayer identification would be documented when opening the trust account and any interest will accrue to the client.

California Rule of Court 9.8.5 and State Bar Rules, title 2, division 1, rule 2.5 require licensees to register annually all client trust accounts, including IOLTA and non-IOLTA, that were open at any point during the reporting period, complete a self-assessment, and certify compliance with the rules of safekeeping.

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