Q: What are attorneys’ responsibilities under the IOLTA rules if they do not handle client trust funds?

A: Licensed attorneys in Texas who do NOT handle client trust funds are not required to establish an IOLTA account. However, such attorneys are required to advise the Texas Access to Justice Foundation during the annual IOLTA compliance process that they do not handle client trust funds.

Q: Where do attorneys deposit client trust funds that do not meet the short-term or nominal fund requirements of IOLTA?

A: Client trust funds that do not meet the nominal or short-term fund requirements of an IOLTA account should be deposited in a separate demand account to earn interest for the benefit of that client. The attorney must use that client’s tax I.D. number instead of the Foundation’s tax I.D.

Q: Do attorneys have to pay for service charges on IOLTA accounts?

A: Allowable reasonable fees are the only fees and service charges that may be deducted by an eligible institution from interest earned on an IOLTA account. Allowable reasonable fees may be deducted from interest or dividends on an IOLTA account only at the rates and in accordance with the customary practices of the eligible institution for non-IOLTA customers. No fees or service charges other than allowable reasonable fees may be assessed against the accrued interest or dividends on an IOLTA account. Any fees and service charges other than allowable reasonable fees shall be the sole responsibility of, and may only be charged to, the attorney or law firm maintaining the IOLTA account.

Q: Does the IOLTA program pay for the checks, deposit slips and other related fees on the client trust accounts?

A: No. The Foundation will pay reasonable service charges on the IOLTA account. However, the Foundation does not pay for checks, wire transfers or other business expenses associated with the account.

Q: What do attorneys or law firms have to do to open an IOLTA account?

A: The attorney or law firm must take the IOLTA Notice to Financial Institution to the financial institution in which the IOLTA account will be opened. This form instructs the financial institution how to establish an IOLTA account. Once the account is opened, the financial institution must complete the form. The attorney, law firm or bank must then mail or fax a copy of the completed form to the Texas Access to Justice Foundation. For more information, please see How to Open an IOLTA account.