Trust Accounting Certificate: Instructions (pdf format)
IOLTA Compliance Statement (pdf format)
Rule 1.15 - Rules of Professional Conduct Governing the IOLTA Program
Need Help Establishing an IOLTA Account?
OBF Grant Application Form (pdf format)
IOLTA-Friendly Banks
IOLTA Financial Institution Guidelines

On May 10, 2004, the Oklahoma Supreme Court amended Rule 1.15(d) of the Oklahoma Rules of Professional Conduct, making participation in the Interest On Lawyers' Trust Account program a requirement for all OBA members who hold client funds in connection with a representation. Beginning July 1, 2004, client funds that are nominal in amount or to be held for a short period of time must be placed in an interest bearing pooled trust account with the interest going to the Oklahoma Bar Foundation (OBF), the official charitable arm of the OBA.

WHAT IS IOLTA? IOLTA is an acronym for Interest On Lawyers' Trust Accounts. Under IOLTA, client funds that cannot earn net interest (after deducting transaction and administrative costs and bank fees) for the client are deposited in an interest bearing trust account. Interest earned by pooling these funds in an IOLTA account is paid to the OBF. Client funds that are capable of earning net interest for the client may NOT be placed in an IOLTA account.

WHERE DOES THE MONEY GO? IOLTA funds help support civil legal aid for the poor and elderly, provide equal access to justice, law-related education programs grades P-K through 12, high school mock trial programs, advocacy programs for abused and neglected children, and many other vitally needed law-related charitable programs and activities throughout Oklahoma. Since 1986, over $5 million has been granted to help provide charitable services such as these, elevating the public image of the legal profession and all Oklahoma attorneys.

WHAT HAS CHANGED? Participation in the IOLTA program has been voluntary since the program was established in 1983. Beginning July 1, 2004, client funds which are nominal in amount or to be held for a short period of time must be placed in an interest bearing pooled trust account with interest going to the IOLTA program. Attorneys are required to complete an annual trust accounting certificate of compliance or justifiable reason for non-compliance with RPC Rule 1.15(d).

WHO PARTICIPATES? All OBA members that practice within the state of Oklahoma and hold client funds in connection with a representation must participate in the IOLTA program. Attorneys that do NOT handle client trust funds are not required to establish an IOLTA account.

WHAT FUNDS QUALIFY? Funds that are nominal in amount or to be held for a short period of time must be placed in an interest bearing account with the interest going to the OBF. The tax identification number of the OBF will be assigned to the IOLTA account.

WHAT IS NOMINAL? Attorneys should consider whether the client's funds could be invested to provide a positive net return or benefit to the client, taking the following factors into consideration: a) the amount of interest the funds would earn during the period the funds are expected to be deposited; b) the cost of establishing and administering the account, including the cost of lawyer's services, bookkeeping costs and the cost of preparing any tax reports required for interest accruing to a client's benefit; and c) the capability of the financial institution to calculate and pay interest to individual clients.

WHAT TYPES OF FUNDS SHOULD GO INTO AN IOLTA ACCOUNT? Examples of the types of qualified funds placed into trust accounts include: retainers received from clients, until they are actually earned; funds which belong in part to the client and in part to the lawyer; funds of the client that are being held for disbursement at a later time; personal injury settlements and awards; deposits required to close property transactions; prepaid court costs. Unless an escrow or client's trust account is established for the sole benefit of the client, all pooled client trust accounts must be an IOLTA account.

WHAT ABOUT FLAT-FEE AGREEMENTS AND "NONREFUNDABLE" AGREEMENTS? The Oklahoma Bar Association Legal Ethics Committee has offered advisory opinions on how attorneys should handle fees. Ethics Opinions are available on the OBA's website.

WHERE SHOULD "NON-IOLTA" FUNDS BE DEPOSITED? Client trust funds that do not meet the nominal or short-term requirements of the IOLTA program under existing Rules of Professional Conduct and other applicable law should ordinarily be placed in a separate account that earn interest for the client's benefit. The client's tax I.D. number should be used on such interest-bearing accounts instead of the OBF's tax identification number.

WHAT IF THE BANK FEES EXCEED THE INTEREST EARNED ON THE IOLTA ACCOUNT? If an IOLTA account is not routinely earning interest greater than the applicable service charges, the attorney should attempt to locate and do business with an IOLTA-friendly bank that has agreed to waive or reduce fees on IOLTA accounts due to the charitable nature of the accounts. OBF maintains a list of IOLTA Honor Roll and IOLTA-friendly banks. If an IOLTA friendly bank cannot be found in or reasonably near the community where the lawyer's office is located and the interest earned by the IOLTA account is not sufficient to cover the applicable service charges, the attorney should attach an explanatory statement to the Trust Accounting Certificate showing justifiable reason for noncompliance with requirements of Rule 1.15(d), and switch the account to a non-interest bearing account. The certificate of non-compliance must be filed annually with the annual bar dues statement. Attorneys must notify the OBF and switch the trust account back to an interest bearing IOLTA account should conditions change.

WHO PAYS THE SERVICES CHARGES ON IOLTA ACCOUNTS? Only reasonable applicable service fees may be netted or deducted from interest earned by the IOLTA account. Applicable service fees are routine maintenance fees only. A more comprehensive list of permissible service charges may be obtained from the OBF. Service charges directly attributable to the IOLTA account are deductible solely from interest earned by the account; the principal of the account cannot be used to pay or offset service charges of any kind. Since IOLTA accounts contain client funds held in trust by attorneys, invasion of principal to pay service charges is improper. OBF has successfully negotiated with several banks in Oklahoma to waive service fees on IOLTA accounts. The OBF recommends that attorneys and law firms patronize IOLTA-friendly financial institutions.

DOES THE IOLTA PROGRAM PAY FOR CHECKS OR DEPOSIT SLIPS? No, the only allowable fees to be netted or deducted from interest earned are reasonable, applicable service fees assessed by the bank. Other fees and charges (e.g. check printing charges, wire transfers, ATM fees and NSF charges) are considered ordinary business expenses of the attorney or law firm and must not be deducted from the interest earned by the account.

HOW IS AN IOLTA ACCOUNT ESTABLISHED? The attorney or law firm must take a completed "IOLTA Notice to Financial Institution" enrollment form to the financial institution where the IOLTA account will be maintained. This form directs the financial institution to establish the interest bearing IOLTA account. Once the enrollment form is completed and the IOLTA account is established, the attorney or law firm must immediately mail or fax a copy of the completed enrollment form to the OBF; the original is to remain on file with the financial institution. Financial institutions that have not previously participated in IOLTA may obtain "Financial Institution Guidelines" from the OBF for more detailed information regarding administration of IOLTA accounts and how to be included in the IOLTA-friendly group.

IS ADDITIONAL RECORD KEEPING REQUIRED? Once the account is established there should be no additional record keeping by the attorney or law firm beyond the routine bookkeeping activities associated with the proper maintenance of a client trust account and the filing of the annual trust account certificate showing compliance with the provisions of Rule 1.15(d).