An IOLTA account is an interest-bearing checking account that an attorney or law firm maintains for client funds nominal in amount or held for a short period of time. The account is a demand account established in the name of the attorney or law firm. The account is often referred to as a client trust account.

In the Rules Governing the Operation of the Texas Access to Justice Foundation, Rule 4 states:

Deposit of Certain Client Funds.

An attorney licensed by the Supreme Court of Texas, receiving in the course of the practice of law in this state, client funds that are nominal in amount or are reasonably anticipated to be held for a short period of time, must establish and maintain a separate interest or dividend-bearing insured depository trust account at an eligible institution and deposit such funds in the account. “Interest or dividend-bearing insured depository trust account” means a federally insured checking account or investment product, including a daily financial institution repurchase agreement or a money market fund at an eligible institution as defined in Rule (7). A daily financial institution repurchase agreement must be fully collateralized by, and an open-end money market fund must consist solely of United States Government Securities. A daily financial institution repurchase agreement may be established only with an eligible institution that is deemed to be “well capitalized” or “adequately capitalized” as defined by applicable federal statutes and regulations. An open-end money market fund must hold itself out as a money market fund as defined by applicable federal statutes and regulations under the Investment Company Act of 1940 and have total assets of at least $250,000,000.

The funds covered by this rule shall be subject to withdrawal upon request and without delay. All IOLTA-eligible client funds may be deposited in a single unsegregated account. Attorneys who practice in a law firm or for a professional corporation may utilize the interest-bearing trust account of such firm or corporation to comply with Rule 4. No funds belonging to the attorney or law firm, except funds reasonably sufficient to pay for fees or obtain a waiver of fees or to keep the account open, may be deposited in such an account. The interest earned on the account shall be paid in accordance with and used for the purposes set forth in these Rules. The Foundation shall hold the entire beneficial interest in the interest earned. Funds to be deposited under these Rules shall not include those funds evidenced by a financial institution instrument, such as a draft, until the instrument is fully credited to the financial institution in which the account is maintained. The term "draft" as herein used is defined in Section 3.104 (b) (1) of the Texas Business and Commerce Code. A draft or similar instrument need not be treated as a collected item unless it is the type of instrument which the financial institution generally treats as a collected item. Nothing in this or any other of these Rules prohibits the deposit of client funds into a general account or changes the legal relationship between depositor and financial institution from that established by contract or by applicable state and federal law.

There are many factors that should be considered in determining whether an attorney needs an IOLTA account. For more information, visit the Do You Need an IOLTA Account section.

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 an Eligible Financial Institution section for more information.

If your institution does not currently hold IOLTA accounts, please email or call 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.

Recent News

Aug. 25, 2021

TAJF Receives $20 Million from TDHCA to Provide COVID-related Housing Legal Services

June 16, 2021

Texas Legislature Provides Funding for the State's Legal Aid System

May 11, 2021

TAJF Executive Director honored with national Innovations in Equal Justice Award

Apr. 15, 2021

Help sexual assault survivors and support legal aid - Justice Eva Guzman, Houston Chronicle

Mar. 3, 2021

Hurting from the pandemic and storm, more Texans need legal aid - Chief Justice Nathan Hecht, Austin American-Statesman

Nov. 5, 2020

Texas Veterans Legal Aid Week goes virtual, free clinics held Nov. 9 - 13

Oct. 21, 2020

Stop TX Eviction Launches to Keep Renters Housed

Oct. 1, 2020

TAJF Creates New Tate Rural Justice Fellowship

Sept. 22, 2020

Hispanic Issues Section Raises Funds for Legal Aid

Sept. 2, 2020

TAJF Adds Houston Attorney Travis Torrence to Board

Aug. 25, 2020

TAJF Names Former Texas Supreme Court Justice Deborah Hankinson as Board Chair

Aug. 12, 2020

TAJF Sponsors Five Equal Justice Works Fellows

Aug. 10, 2020

American Bar Association Appoints TAJF Executive Director to New Positions

June 25, 2020

Nearly 50 Prime Partner Banks Remain Committed to Funding Civil Legal Aid

More news