ATTORNEY IOLTA FAQ

No form is required by our program, but some banks request this Notice to Financial Institution to Establish New Interest-Bearing Account. You can download that form if requested by the bank you are choosing for your IOLTA account.

You are not required to have a trust account unless you have appropriate client funds to deposit under Rule 1.15. If you do not regularly represent clients, it is fine to go without a trust account until one is needed. If you want to have an account open and ready, you can research banks to find one that does not have as strict of an account activity policy.

There are many banks that waive service fees for IOLTA accounts. Go to the list of approved banks and look for a bank that does not have an asterisk by its name. An asterisk indicates that the bank charges fees.

There are many banks that waive service fees for IOLTA accounts. Go to the list of approved banks and look for a bank that does not have an asterisk by its name. An asterisk indicates that the bank charges fees.

Check your records to determine whether any checks are outstanding. If there are none, arrange for the bank to send the final interest payment (if any) to the IOLTA program and follow your bank's procedures for closing the account. If there are checks outstanding, the account must remain open until the checks clear. If the checks are old, you should follow the steps for handling stale checks, described above.

When the account has been closed, fill out the IOLTA notification request form with your name, the firm name, the bank name, the last four digits of the account number and the date the account was closed.

Yes, they are. Most banks, savings and loans, and other institutions offer accounts which are specifically set up to comply with the IOLTA requirement that interest be submitted directly by the financial institution to the IOLTA program. In 1990, the Supreme Court required attorneys to maintain their IOLTA accounts only in financial institutions that have agreed to report trust overdrafts (Rule 1.15(k)). The Lawyers Professional Responsibility Board maintains a list of approved financial institutions.

The financial institution in which the accounts are maintained calculates the interest, in all cases. It will forward periodically to the Minnesota IOLTA Program accumulations of interest along with remittance advice, reporting the amounts of interest earned in each law firm's pooled account, the account number, and the period during which the interest accrued. The Minnesota IOLTA Program continues to work with the financial community to see that the procedures adopted are as convenient as possible for attorneys, law firms and banking institutions.

In considering IOLTA programs in Minnesota and other states, the Internal Revenue Service has ruled that there are no income tax consequences, either to attorneys or to clients whose funds are deposited in pooled accounts.

Lawyers are not required to give any notice to clients whose deposits are nominal in amount or to be held for a short period of time. However, the Supreme Court, in its opinion establishing IOLTA, said that "many, if not most, lawyers will, as a matter of good client relations and courtesy, want to notify their clients of their participation in this program in some manner, and we encourage them to do so."