WHAT IS THE BASIC CONCEPT OF IOLTA?
Very often, the amount of money that a lawyer handles for a single client is either nominal in amount or to be held only for a short time. It would not be feasible to establish separate interest-bearing accounts for these client funds. The cost of administering separate accounts, including the lawyer’s time and bank charges, would be greater than the amount of interest that would be generated. In the past, client funds would be held by each attorney in a common trust checking account on which the depository bank paid no interest. In accordance with the program adopted by the NJ Supreme Court, the interest earned on this common account is now forwarded directly by the financial institution to the IOLTA Fund without any direct involvement by the attorney once the IOLTA Trust account has been established. The lawyer retains the right to determine in any specific case whether to place client funds in a separate interest-bearing account for the benefit of the client or not to earn interest,
