MY CARTIOLTA Basics: Video
This video shows the IOLTA basics, including what an IOLTA account is and when to use an IOLTA account.
IOLTA Basics: Overview
An IOLTA, or Interest on Lawyer’s Trust Account, is used to hold client funds separately from the funds of a law firm or individual lawyer. An IOLTA account is an interest-bearing checking account. The interest earned from all IOLTA accounts within a state is pooled together to assist low-income individuals to afford legal aid.
An IOLTA account is used in three main situations. First being when a lawyer receives funds from a client to perform legal services. Second being when a lawyer receives funds from a settlement that must be paid to a client. Third being when a lawyer receives funds or is otherwise holding property for clients that the lawyer has not yet earned or must return at a later date. A lawyer cannot hold their fund and the client’s funds in the same account, so IOLTA accounts are used to separate these funds and hold smaller amounts of money from clients for a short span of time.
An important note to make here is that if a lawyer intends to hold a large sum of money for a client, or intends to hold the funds for an extended period of time, the lawyer should NOT place those funds into an IOLTA account but should rather place the funds into an account to be held in trust for that particular client.
