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The Connecticut Bar Foundation was designated by the judges of the Superior Court as the 501(c)(3) organization to administer the IOLTA program. The Interest on Lawyers’ Trust Accounts (IOLTA) program was established by the Connecticut Legislature in 1984 to assist in the delivery of legal services to the poor. References to “client” include “client or third person” references to “lawyer” include “lawyer or law firm or other organization with which the lawyer is professionally associated” and references to “financial institution” include “banks, savings and loan associations, and open-end investment companies.” What is IOLTA?

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51-81c, the Connecticut Rules of Professional Conduct, Rule 1.15, and Connecticut Practice Book Sections 2-27 and 2-28.

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The capability of the financial institution to pay net interest to individual clients through the use of subaccountsįind more information about the IOLTA and trust accounting requirements on the IOLTA Resources page, and view the full text of Rule 1.15.The following information is designed to assist attorneys in complying with IOLTA under Connecticut General Statutes Sec.The cost of establishing and administering a separate account.The amount of interest funds would earn during the time they are likely to be held.Lawyers should consider three factors in making the determination: Under Rule 1.15(g), lawyers should exercise reasonable judgment in determining whether client funds should be deposited in an IOLTA account or a separate client trust account.

Lawyers may not deposit client funds in accounts that do not bear interest, or in their business or operating accounts. Funds that are capable of generating net interest for an individual client should be deposited into a separate, interest-bearing trust account with interest paid to the client. Rule 1.15(f) requires lawyers to deposit all nominal or short-term client funds in an IOLTA account. Interest-bearing client trust accounts established to hold the funds of client, with the client receiving the interest.IOLTA accounts, with interest remitted to the Lawyers Trust Fund.There are only two types of client trust accounts permitted under the rule: Under Rule 1.15, which provides for the safekeeping of property belonging to clients and third persons, lawyers must deposit all funds belonging to clients and third persons into client trust accounts. (Learn more about Illinois’ legal aid system and about LTF.) IOLTA requirements In 2012 IOLTA revenues of $2.9 million helped the Lawyers Trust Fund make grants to 32 non-profit organizations across Illinois, which provided assistance to low-income Illinoisans regarding more than 180,000 legal matters. Interest generated on IOLTA accounts is an important source of funding for civil legal aid in Illinois. Under Rule of Professional Conduct 1.15(f), Illinois lawyers are required to deposit short-term or nominal funds of clients and third persons into IOLTA accounts. An IOLTA account is a pooled, interest- or dividend-bearing business checking account (such as a NOW account) for the deposit of client funds which pays all interest earned to the Lawyers Trust Fund. “IOLTA” stands for Interest on Lawyer Trust Accounts. The rule change order issued by the Supreme Court is available here. Nonetheless, the basic requirements regarding safekeeping of property, lawyers’ use of IOLTA accounts, payment of comparable interest rates on IOLTA accounts, and management of unidentified funds in IOLTA accounts are fundamentally unchanged. These are the most comprehensive revisions to RPC 1.15 since the current rule took effect in 2011 and include significant changes to the organization of the rule’s provisions, including the adoption of new Rules 1.15A, 1.15B, and 1.15C. On March 1, the Illinois Supreme Court announced changes to Rules of Professional Conduct 1.5 and 1.15 that will take effect July 1, 2023. PRACTICE UPDATE: Revised Safekeeping Rules Take Effect July 1, 2023