Frequently Asked Questions About IOLTA

What is IOLTA?
IOLTA stands for “Interest on Lawyers Trust Accounts.” In Washington state, IOLTA applies both to lawyers and to limited practice officers (LPOs). ¹ Attorneys and LPOs routinely receive client funds to be held in trust for future use. If the amount is large or if the funds are to be held for a long period of time, the attorney or LPO normally places these monies in an account to earn interest for the benefit of the client. However, when the amounts are small or they are to be held for a short period of time, it is impractical to establish separate interest bearing accounts for individual clients. Through the IOLTA rule, the Washington Supreme Court provides for these funds being in pooled accounts with the interest paid to the Legal Foundation of Washington.

What are IOLTA funds used for?
IOLTA funds are used to support 32 nonprofit organizations across Washington state—programs that provide civil legal aid to low-income people with nowhere else to turn.

I am a new lawyer. I didn’t learn how to handle client funds in law school. Are there any resources available to help me?
Yes. The Washington State Bar Association offers CLE seminars on trust account management and the appropriate handling of client funds. They also produce an excellent brochure that can help you with the basics. WSBA brochure “Managing Client Trust Accounts: Rules, Regulations and Common Sense”

Are banks required to offer IOLTA accounts?
No. Most financial institutions choose to participate in the IOLTA program as a service to their customers.