The Supreme Court of Illinois has announced amendments to existing lawyer trust account guidelines. The new amendments to Rule 1.15 of the Illinois Rules of Professional Conduct help clarify the obligations that all lawyers have to manage and protect client funds. Click here
to view a copy of the recent rule changes.
A lawyer has always been required to hold the money or property of clients or third persons that come into a lawyer’s possession separate from the lawyer’s own property. This is because a lawyer is a professional fiduciary who must safeguard client funds.
Beginning September 1, 2011, new trust account rules provide for three essential changes from current practice. The changes serve to benefit both the public and the profession.
First, lawyers will have to continue to segregate client funds, but the rule clarifies that they will have only two banking options as to where they hold client money. Beginning September 1st
, client funds can only be deposited into either:
- An IOLTA (Interest on Lawyers Trust Account) account. An IOLTA account is a pooled interest or dividend-bearing client trust account established with an eligible financial institution used for the deposit of nominal or short term client funds. The interest on an IOLTA account is paid to the Lawyers Trust Fund of Illinois (LTF). LTF is a tax-exempt, not-for-profit organization that uses the interest generated by IOLTA accounts to make charitable contributions to not-for-profit agencies that provide legal aid to the poor; or
- A separate, interest-bearing non-IOLTA client trust account established to hold the funds of a specific client or third person with that specific client designated as the income beneficiary.