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Open & Manage IOLTA Accounts
The Supreme Court of Texas has amended the IOLTA rules requiring Texas attorneys
to place IOLTA accounts at eligible financial institutions. If your financial institution
currently holds IOLTA accounts, and you would like to learn more about becoming
eligible, visit the Become Eligible section for
more information.
If your institution does not currently hold IOLTA accounts, please contact
Janice Cappiello at 512.320.0099, ext. 108, before opening IOLTA accounts.
You must acquire a bank code and a packet of instructions and forms from the Foundation
before qualifying for the eligibility process.
If your institution has been certified as eligible and it is determined that an
attorney or law firm must maintain an IOLTA account, the following steps should
be taken to open the account:
- The IOLTA account should be established in the name of the attorney or law firm
and be an interest-bearing trust account, such as a negotiable order of withdrawal
(NOW) account, with the interest earned paid to the Texas Access to Justice Foundation,
a 501(c)(3) nonprofit corporation. An incorporated law firm is permitted to use
an interest-bearing checking account (NOW account) as an IOLTA account.
- The tax identification number for all IOLTA accounts is that of the Foundation.
The Foundation is a tax exempt, nonprofit Texas corporation. All IOLTA accounts
are exempt from backup withholding because of the Foundation’s status as a
tax-exempt entity.
The tax identification number will not match the name on the account. Submit a substitute
W9 form to the Foundation for verification of the tax identification number. The
bank is not required to report to the IRS the interest earned on the IOLTA account
on behalf of the attorney or law firm.
- All IOLTA accounts should have the same closing date (or statement cycle) at the
end of the month.
- The IOLTA Notice to Financial
Institution form should be completed by the bank and attorney and returned to
the Texas Access to Justice Foundation via fax at 512.469.0112, or mail to P.O.
Box 12886, Austin, Texas 78711-2886. Banks should provide this form to all branches
to accommodate attorneys and law firms in establishing IOLTA accounts.
For more information on how to open an IOLTA account, please contact
Joyce Lindsey at 512.320.0099, ext. 107.
Service Charges
Allowable reasonable fees are the only fees and service charges that may be deducted
by an eligible institution from interest earned on an IOLTA account. Allowable reasonable
fees may be deducted from interest or dividends on an IOLTA account only at the
rates and in accordance with the customary practices of the eligible institution
for non-IOLTA customers. No fees or service charges other than allowable reasonable
fees may be assessed against the accrued interest or dividends on an IOLTA account.
Any fees and service charges other than allowable reasonable fees shall be the sole
responsibility of, and may only be charged to, the attorney or law firm maintaining
the IOLTA account.
FDIC Protection - Updated May 20, 2009
Deposits at FDIC-insured institutions are now insured
up to at least $250,000 per depositor through December
31, 2013. On January 1, 2014, the standard insurance
amount will return to $100,000 per depositor for all
account categories except for IRAs and other certain
retirement accounts which will remain at $250,000 per
depositor. (This supersedes the October 3, 2008
changes.)
The
extension announced on May 20, 2009, does not apply to
the Transaction Account Guarantee Program. The unlimited
coverage under the Transaction Account Guarantee Program
is only in effect for depositors at participating
institutions through December 31, 2009.
This
means that as of January 1, 2010, funds held in IOLTA
accounts, as well as those held in non-interest bearing
transaction accounts, will be treated the same as the
funds held in all other FDIC insured accounts: each
depositor's total funds held in the financial
institution will be insured up to a total of $250,000.
A link to the FDIC web page containing this
information can found at:
http://www.fdic.gov/deposit/deposits/changes.html
Closing IOLTA Accounts
An IOLTA account should only be closed when the attorney or law firm officially
closes the account. Once an account is designated as “closed” on the
IOLTA Remittance Report, it should not be listed on future reports.
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Recent News
July 20, 2010
Texas Rep. Pete P. Gallego Honored with Texas Access to Justice Legislative Hero Award
June 30, 2010
New booklet "A Lawyer's Guide to Client Trust Accounts"
created by Office of Chief Disciplinary Counsel helps address common questions.
May 11, 2010
Tyler Banks Recognized for Supporting Legal Services to the Poor
May 5, 2010
Texas Access to Justice Commission Raises Funds for Legal Services for Veterans
Apr. 27, 2010
League of Women Voters of Texas Receives Star of Justice Award for Access to Justice Efforts
Apr. 19, 2010
Access to Justice Commission Hosts Gala Benefiting Legal Services for Veterans
Apr. 13, 2010
"Going it Alone"
an article on self-represented litigants on TexasTribune.org Apr. 8, 2010
A blog post on
Dallas Morning News
about the Forum on self-represented litigants
Apr. 5, 2010
An op-ed by Chief Justice Jefferson & Commission Chair Reasoner on self-represented
litigants appears in the
Dallas Morning News,
Fort Worth Star-Telegram and
Houston Chronicle
Mar. 30, 2010
First Texas Forum on Self-Represented Litigants and the Courts to be held April 8-9 in Dallas
Mar. 12, 2010
Chief Justice Jefferson names Justice Hecht as new Foundation liaison
More news
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