September 8, 2006
New Model Rules: changes to IOLTA accounts
One of the crucial changes contained in the new model rules of professional conduct encompasses the area of IOLTA accounts. IOLTA - an acronym for Interest on Lawyers' Trust Accounts - was originally developed as a method of raising money for charitable purposes, with particular emphasis on funding civil legal services for the poor.
Client trust accounts that the lawyer is holding for the client, perhaps pending settlement, are set up as IOLTA accounts. James David Caruso of Arnold & Caruso in Toledo, a member of The Supreme Court Task Force on Rules of Professional Conduct said, “Under the new model rules, lawyers will be required to maintain more detailed records of their IOLTA accounts to comply with these regulations.” For example, “The Rules for the first time impose time requirements for the retention of client documents. Rule 1.15 requires lawyers to maintain all account records from their IOLTA account and records regarding other property held by the lawyer for the client for a period of seven years after termination of the matter.”
Caruso explains, “Rule 1.15 also spells out in detail the requirements for maintaining an IOLTA account. A record for each client on whose behalf the lawyer is holding money or property must be kept which contain the client’s name, amount and source of funds; date, amount, name of payee and purpose of distribution of funds; and a current balance. Additionally, a record of each bank account of the lawyer must be kept which includes the name of the account; date, amount and name of the client affected by the credit or debit; and the balance. Unlike the DR 9-102(A) that permitted client advances for expenses to be placed in the lawyer’s general account, R 1.15 requires advances for expenses to be placed in the IOLTA. “
Join attorney Caruso as he discusses these as well as other modifications to professional conduct on Sept. 29 from 9:00 to 11:45 a.m. in the seminar “The DaVinci Rules.” Stephanie Krznarich of Ohio Lawyers Assistance Program will round out the program to complete the full Rule X CLE requirements for ethics, professionalism and substance abuse.
Register online today at www.cbalaw.org or phone 614/221.4112 for event # 3646-1. The cost is $85 prepaid/$95 day of for members, $125 prepaid/$135 day of for non-members and $55 prepaid/$65 day of for paralegals.