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May a lawyer or law firm establish a pooled interest-bearing trust account and pay the interest to the clients?

April 26, 2017account clients interest-bearing law firm Lawyer pay pooled Trust

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May a lawyer or law firm establish a pooled interest-bearing trust account and pay the interest to the clients?

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A. Yes. A lawyer or law firm may set up a pooled interest-bearing trust account, and then either the financial institution or the lawyer provides for computation of interest earned on each client’s funds, the payment of that interest to each client, and the necessary record keeping and filing of paperwork with the I.R.S. Banking regulations are restrictive on NOW accounts, and the lawyer or law firm may not be able to use that type of account for certain trust accounts where the clients receive the interest. Savings accounts or money market accounts are alternatives.