The concept of the Interest on Lawyer Trust Accounts program is quite simple:
     This plan allows attorneys to invest small or short-term deposits so that these otherwise idle funds may be pooled to generate interest money channeled into a charitable foundation for use in law-related public interest programs. To the extent that interest on any single client’s deposit could be made available for the benefit of that client, the program does not alter long-standing, trust account practices within the legal profession which acknowledges the fiduciary option.

Q. What does the program do?
A. IOLTA funds can only be used to provide funding for the following purposes:

• To provide legal services to the poor;
• To provide law-related education programs for the public;
• To provide scholarships and student loans;
• To improve the administration of justice; and
• For such other programs for the benefit of the public as are specifically approved from time to time by the Supreme Court of Idaho.

The funding is administered by the ILF’s grant program.  Grant information can be accessed by clicking on the button at the bottom of this page

Q. Does the program operate successfully elsewhere?
A. The Idaho program was the third of its kind in the United States. Similar plans have now been established in 50 states and the District of Columbia.

Q. Does my participation in IOLTA deprive my clients of their interest money?
A. No. The program was not meant to utilize money from all clients trust deposits – only those nominal in amount or to be held for short periods of time. Clients’ funds that are substantial in amount or to be held for a long period of time are to be placed in a separate trust account solely for that specific client.

Q. Are there any administrative duties caused by the program?
A. No. IOLTA imposes no administrative burden on participating attorneys or law firms. A participating attorney or firm places nominal or short-term deposits into a single unsegregated account. This unsegregated account bears interest, but this should not affect how an attorney or law firm handles client’s trust deposits.

Q. What are the tax consequences of participation in the program?
A. There are none to the client or the attorney. The Idaho Law Foundation receives the interest from participating trust accounts and is exempt from federal income tax.

Q. How does the program affect financial institutions?
A. Participating financial institutions – not attorneys – are responsible for transmitting interest income to the Idaho Law Foundation. The court’s enabling opinion provides that the Foundation will absorb any financial institution’s special charges or fees for its involvement in IOLTA, by directing that interest payments be net of such charges and fees.

Q. Do all financial institutions know about this program?
A. Most financial institutions in Idaho are presently participating in the program.   If any financial institution needs additional information about the program, please advise the Foundation officials.

Q. How does my trust account become an IOLTA account?
A. By order of the State of Idaho Supreme Court every general attorney trust account will be converted to an interest-bearing account with the interest paid by the financial institution to the Idaho Law Foundation unless the lawyer or law firm files a Notice of Declination indicating his/her or their decision to “opt out” with the Executive Director of the Idaho State Bar by February 1 of each year. The Trust Account Certification, which is a part of the annual licensing procedure, authorizes the financial institution holding your general trust account to convert it to an IOLTA account. The ILF will convey that authorization to your bank, so you do not have to do anything to participate.

Q. How can my firm or financial institution learn more about IOLTA?
A. This information provides a basic orientation to Idaho’s Interest on Lawyer Trust Accounts program. Please refer to Idaho Bar Commission Rule 302 and Idaho Rule of Professional Conduct 1.15 for more information on maintaining trust accounts and complying with rules governing IOLTA accounts. Personnel at the Idaho Law Foundation are available to assist members of the legal and financial communities with other questions.