When you are entrusted with a client’s funds you are obligated under Massachusetts Rules of Professional Conduct 1.15 to hold it in trust. Money which is received from a client that has not been earned must be placed in either an IOLTA account or, depending on the amount held and the time held, a separate trust account. (However, note that Rule 1.15 does not require flat fees to be deposited into an IOLTA account. RPC 1.15, Cmt. 2A.) If you plan to hold client funds, open an account as soon as possible and certainly before you receive any money from a client.

You can find a list of approved banks, most are approved, at Board of Bar Overseers’s website: http://www.mass.gov/obcbbo/faq.htm#q9. An appropriate name for the account must be selected. The naming convention is governed by Mass. R. Prof. C. 1.15(e) which requires words such as “trust account”, “escrow account”, “client funds account”, “conveyance account”, or “IOLTA Account”. When opening an account, complete this form and send it to the Massachusetts IOLTA Committee along with a deposit slip or voided check. It is also helpful to: (1) order checks which are a different color from your operating account and (2) keep approximately $150.00 in the account for bank charges. This will keep you from inadvertently using client funds to pay for firm expenses.

For additional training on IOLTA, attend a free session run by the Board of Bar Overseers and help at the Boston Bar Association.

GENERAL REQUIREMENTS

Massachusetts IOLTA Committee Client Funds Manual 2015

We are Reconciled: IOLTA Accounts

Step Up to the Plate and Learn to Do Your IOLTA Trust Accounting

Attorney Funds May be Deposited into IOLTA Account to Cover Bank Charges

IOLTA Accounting: Part One (The Legal Toolkit Podcast)

IOLTA Accounting: Part Two (The Legal Toolkit Podcast)

THREE-WAY RECONCILIATION

Uh Oh!! IOLTA Accounts and Escrow Accounts (James Bolan, Esq.)

Three-Way Reconciliation Sample Forms

Minnesota State Bar Association IOLTA Guides for QuickBooks and GnuCash

Two-Minute Tips: How to Reconcile Your Trust Account [Video] (Beverly Michaelis)

BOARD OF BAR OVERSEERS ARTICLES

RECORD TIME: Countdown to the New Rule on Trust Accounting

Records for Other People’s Money

Lost and Found – What To Do With Missing Clients’ Funds

Clients’ Funds – No Casual Matter

More Dishonored in the Breach: Bounced Checks and Bad Bookkeeping

Working with Clients’ Trust Accounts

FURTHER READING FROM OUR LENDING LIBRARY

Law Practice Accounting Using QuickBooks (PC and Mac) (Lynette Benton, Forthcoming)

QuickBooks in One Hour for Lawyers (Lynette Benton, American Bar Association)