Trust Accounts

Attorneys routinely receive client funds, such as unearned retainers or settlements, which they place in financial institutions. Since the funds are being held for the benefit of the client, attorneys must place these funds in an account separate from their general operating account or any personal account.

Client trust accounts:

1. If the client funds will generate interest income sufficient to offset the expense of investing them in a separate account for the client (large sums of money or funds to be held for a long period of time), the attorney should invest the funds for the client. The same principle applies if the bank offers, and an attorney chooses to utilize, a sub-accounting product that creates separate interest-generating accounts for individual clients that are tied to one master account. The following diagram illustrates this basic concept.

Chart Illustrating funds going into Master Account

2. In 1984, the Supreme Court of Texas set up the Interest on Lawyers’ Trust Accounts (IOLTA) Program to allow attorneys to pool short-term and nominal deposits into one account with the interest paid to the Texas Access to Justice Foundation. As of July 1, 1989, all Texas attorneys who handle qualifying client funds must establish an IOLTA account.

Determine if you need an IOLTA account.

 

Recent News

 

Sept. 10, 2018

Texas Brand Bank Joins Prime Partner Program

Sept. 5, 2018

Austin Capital Bank Joins Prime Partner Program

July 9, 2018

TAJF Proud to Join Equal Justice Works to Fund Disaster Legal Corps

June 29, 2018

Foundation Establishes Randy Chapman Fellowship to Impact Legal Aid in Texas 

June 19, 2018

Foundation Creates Families in Crisis on the Border Legal Aid Fund 

March 27, 2018

Foundation Creates David Hall Fellowship to Increase Legal Aid in Southwest Texas 

Jan. 24, 2018

TAJF Executive Director Named "Distinguished Lawyer"

Nov. 6, 2017

November 6-10 Is Texas Veterans Legal Aid Week

Nov. 1, 2017

November Recognized As Prime Partner Bank Month

Oct. 23, 2017

TAJF Awards Funds to Help Those Impacted by Harvey

Sept. 26, 2017

TAJF Announces 2017 Equal Justice Works Fellows

Sept. 26, 2017

New Campaign Seeks to Honor Veterans and Raise Funds for Legal Services

Aug. 28, 2017

Donate to the Hurricane Harvey Legal Aid Fund. Help the Survivors Rebuild their Lives.

 

More news

© 2018 Texas Access to Justice Foundation