What is IOLTA?

In 1984, the Supreme Court of Texas established a mechanism for funding legal aid for low-income Texans by collecting interest on client trust accounts. Through the Texas Interest on Lawyers’ Trust Accounts (IOLTA) Program, attorneys voluntarily pooled the interest earned on trust accounts to provide civil legal services to the poor. The same year, the Court created the Texas Access to Justice Foundation, a nonprofit corporation, to administer the program, including the collection and granting of IOLTA funds.

The voluntary IOLTA Program generated $500,000 for grants during 1987-88. In 1989, participation in the IOLTA Program became mandatory for Texas attorneys. The program in Texas currently generates approximately $12 million yearly without taxing the public and at no cost to lawyers or their clients. Only client funds that are nominal or held for a short period of time may be deposited into IOLTA accounts.

The interest on the IOLTA accounts is remitted to the Foundation, which grants the money to nonprofit organizations that provide free civil aid to low-income Texans.

The Rules Governing the Operation of the Texas Access to Justice Foundation, adopted by the Supreme Court of Texas in 1988, prohibit the use of IOLTA funds to directly fund class action suits, lawsuits against governmental entities, or lobbying for or against political candidates or issues.

All fifty states and the District of Columbia have approved IOLTA programs. In Australia and Canada, where the IOLTA concept originated, the programs have been operating since the 1960s.

For more information about IOLTA at the national level, visit www.iolta.org.

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