Bar News - February 18, 2015
President's Perspective: The Location of Your Trust Account Matters
By: Lisa Wellman-Ally
Let’s talk about Interest on Lawyers Trust Accounts, commonly known as IOLTA.
In addition to serving as president of the NH Bar Association, I am a member of the NH Bar Foundation Board of Directors. The Bar Foundation manages the IOLTA funds that are generated by attorneys’ trust accounts. Dozens of financial institutions participate in the IOLTA program, but there are nine Leadership institutions that offer 2 percent interest on the accounts, as well as several Partner institutions that offer at least 1 percent. We’re grateful to these institutions, because the IOLTA funds they generate help fund legal services organizations and programs in our state, where public resources for these programs are scarce.
Rule 50 requires all attorneys who handle client money to operate an IOLTA account. The interest-bearing pooled IOLTA account is for those client funds held in trust that are either small or are only held for a short period of time. The interest earned on those accounts, paid to the NH Bar Foundation, is then granted to Pro Bono, LARC, NH Legal Assistance, and the Disability Rights Center to provide direct legal services to the poor.
Another hat I wear is as the president of my local credit union, the NH Community Federal Credit Union. A new federal law recently granted credit unions the authority to open IOLTA accounts, which means the banking options for lawyers just got a lot better. With a wide range of banks and now credit unions available for IOLTA, I encourage all attorneys to open an account at a financial institution that will provide the highest interest rate on their account.
For some of you, the convenience of maintaining an IOLTA account in the same bank where you have your other banking services is paramount. But opening a second account in a Leadership or Partnership Bank, or a participating credit union, can help increase the amount of funds available for legal services to the poor. I encourage all attorneys who are required to have an IOLTA account to shop around and find the best rate available.