Practicing attorneys need a Lawyer Trust Account (IOLTA) to separate client funds from operating funds. Holding nominal and short-term funds from clients and third persons in a trust protects attorneys and their clients. When attorneys receive retainer fees, for example, that money should be stored in a trust account until the work begins. As the work is performed, attorneys are paid from the IOLTA account. Interest earned on the trust account is paid to the Lawyers Trust Fund of Illinois, which funds free legal clinics and service to people who cannot afford legal help on their own. As an eligible financial institution offering the Lawyer Trust Account (IOLTA), Town and Country Bank and Peoples Prosperity Bank make it easy to manage the account by sending interest earned directly to the IOLTA program.
Lawyers Trust Fund of Illinois
Maintaining an IOLTA trust account is a requirement for attorneys under the Illinois Rule of Professional Conduct, Section 1.15. Failure to do so could result in disciplinary action. Thus, participation in IOLTA is both a professional duty as well as an opportunity to support funding for civil legal aid in Illinois at no personal cost. For any questions about keeping an IOLTA account in compliance, our friendly and experienced staff are always happy to offer assistance.
Partner with a local IOLTA-eligible Community Bank
As an eligible Illinois financial institution, Town and Country Bank and Peoples Prosperity Bank offer an IOLTA checking account with tiered interest based on the minimum account balance.
IOLTA vs. Separate Client Trust Accounts
While lawyers must keep all short-term client funds in an IOLTA account, funds capable of accruing net interest for an individual client should be held in a separate, interest-bearing trust account. The interest from these accounts is paid to the client, not IOLTA. Overall, lawyers are prohibited from holding client funds in their business or operating accounts, or in any account that doesn’t earn interest.
Top 3 Tips for Managing your Lawyer Trust Account
- Don’t borrow from an IOLTA account. It is unethical to use lawyer trust money before the work has been performed. If cash flow is a challenge, talk to us about other solutions.
- Operating funds and client money can’t mix. Managing what goes into an IOLTA account is ultimately the responsibly of the attorney, but we are always available for advice based on our considerable experience helping law firms with IOLTAS and other financial management needs. In a nutshell, an IOLTA account shouldn’t be used for operating expenses, savings, or a place to hide assets.
- Good record-keeping is a must! Attorneys must keep detailed records of each client’s trust account transactions. All trust account checks should record the client’s name and file number. And attorneys should be able to produce records showing how much money each client has in trust at the time.
Partner with us to maximize operational efficiency!
At Town and Country Bank and Peoples Prosperity Bank, our professional associates understand the needs of law firms. We are proud to offer expertise and competitive pricing on deposits for operations, IOLTAS and other client trusts, loans and lines of credit, trust and investment services, and a full array of treasury management products. Our goal with every law firm client is to be a full partner in providing value to the firm as well as its clients. To learn more about lawyer trust accounts or to set up a meeting, contact our Trust and Investment Services team today! We look forward to putting our experience and expertise to work for you.