How does the attorney know when to place trust funds in an IOLTA account?
A. Lawyers continue to exercise their discretion in determining whether a given client’s trust deposit is of sufficient size or will be held for sufficient duration to justify the cost of being individually invested for a client. The IOLTA program does not impose any new decisional burden upon attorneys. A Maryland State Bar Association study estimated that it would cost at least $50 to create and administer a separate client interest-bearing account. Therefore, $50 serves as a benchmark or “safe harbor” to guide lawyers in determining whether funds should be placed in an IOLTA account. The following table shows the approximate time required to generate $50 gross interest at prevailing interest rates. Principal No. of Days $10,000 182 20,000 91 30,000 61 50,000 36 100,000 18 Thus, funds are placed in an IOLTA account only when they are nominal in amount, or being held for a short period of time. If the trust funds are not placed in an IOLTA account, they may be otherwise deposited or i
Related Questions
- How does a lawyer or law firm determine which client funds should be deposited in an IOLTA account and which should be invested on behalf of individual clients?
- If an attorney deposits a check into a trust account is there a set period of time they must wait before issuing checks drawn on those funds?
- How does the attorney know when to place trust funds in an IOLTA account?
