What is an IOLTA account?
A. IOLTA stands for “Interest on Lawyer Trust Accounts.” Attorneys routinely receive client funds to be held in trust for future use. If the amount is large or the funds are to be held for a long period of time, the attorney normally places these monies at interest for the benefit of the individual client. However, in the cases of amounts that are small or are to be held for a short time, it is impractical to establish separate interest-bearing accounts for individual clients. In this case, funds are placed in an IOLTA account, with interest earned on the account paid to the Maryland Legal Services Corporation Fund (MLSC), but it bears MLSC’s tax identification number (52-1266744). (Maryland Code Title 7, Section 408).
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?
- What is the Quickbooks method to account for retainers, IOLTA accounts for a law practice?
- What are a few of the reasons someone would be exempt from having an IOLTA account?
