Interest on Lawyers' Trust Accounts

An IOLTA is a type of trust account used by attorneys to hold clients funds that are too small in amount or held for too short a time to earn interest for the individual client. The interest earned on these pooled funds is directed to the State Bar or a designated foundation to support legal aid programs and other justice-related public services. 

An IOLTA account is used to keep client funds separate from an attorney's personal or business accounts in order to comply with California ethics rules and legal requirements. 

• Retainer payments

• Settlement checks

• Court filing fees

• Other small or short-term client funds

Pooled Funds (such as IOLTA) hold money from multiple clients is one account when they are small amounts and aren't large enough to earn interest individually (such as retainers or court fees).

While the funds are combined into one account, the attorney is still required to keep meticulous records to ensure each client's money is tracked separately.  

The interest earned on the total balance is sent to the state's IOLTA program to support legal aid and access-to-justice services. The