IOLTA Account Requirements

Account Name Use the attorney or law firm's name on the account. The account name and checks may be designated as "Client Trust Account or "Client Escrow Account." Please note that the IOLTA account and the checks printed for the account CANNOT identify the Lawyers Trust Fund of Illinois as designee, trustee or owner.
Tax Information The IOLTA account should bear the taxpayer identification number (TIN) of the Lawyers Trust Fund of Illinois. The IRS Form W-9 should bear the Lawyers Trust Fund's tax identification number as payee and certify exemption from backup withholding taxes. Please send all W-9's to the Lawyers Trust Fund for certification. Because the Lawyers Trust Fund is tax-exempt, no Form 1099 needs to be issued for the IOLTA account. A payer is not liable for penalty under Section 6676(b) for filing an information return with a mismatched TIN number when, pursuant to IRS Regulation Section 35a.9999-1, A-29, and IRS Publication 1281 (Rev. 8-90), p. 42, the payee is an exempt organization.
Interest Calculation Interest on IOLTA accounts should be calculated on the average monthly balance in the account, or as otherwise computed in accordance with the bank's standard practices. The IOLTA rule (Article VIII, Section 1.15(d)(2)) requires that attorneys place their IOLTA accounts in banks at which "(t)he rate of interest payable on (the IOLTA) account shall not be less than the rate paid by the depository institution to depositors other than lawyers or law firms." In other words, banks must pay a rate of interest on IOLTA accounts that is at least equal to the rate paid on similar business checking accounts.


Interest Remittance Procedures Each lawyer or law firm shall direct the eligible financial institution to remit monthly earnings on the IOLTA account directly to the Lawyers Trust Fund of Illinois. For each individual IOLTA account, the eligible financial institution shall provide: a statement transmitted with each remittance showing the name of the lawyer or law firm directing that the remittance be sent; the account number; the remittance period; the rate of interest applied; the account balance on which the interest was calculated; the reasonable service fee(s) if any; the gross earnings for the remittance period; and the net amount of earnings remitted. Remittances shall be sent to the Lawyers Trust Fund electronically unless otherwise agreed. Fees in excess of the earnings accrued on an individual IOLTA account for any month shall not be taken from earnings accrued on other IOLTA accounts or from the principal of the account. When approved, checks should be mailed to: Lawyers Trust Fund of Illinois, 12976 Collections Center Drive, Chicago, IL 60693.
Interest Remittance Reports Each remittance must be accompanied by an Interest Remittance Report and sent electronically to IOLTAREPORT@ltf.org unless otherwise approved by the Lawyers Trust Fund. If approved, reports can be submitted via fax to (312) 938-3091 or by mail to the Lawyers Trust Fund of Illinois, 12976 Collections Center Drive, Chicago, IL 60693. The report must contain the following information: 1) Dates of reporting period; 2) Rate of interest paid; 3) Gross interest; 4) Acceptable service charges, if any; 5) Net interest remitted. Negative netting is not permitted. Under no circumstances can the negative interest balance be deducted from the corpus of an IOLTA account. Fees charged in excess of the earnings accrued on an indvidual account for any month cannot be taken out of earnings accrued on other IOLTA accounts nor from the principal of the account.

The Lawyers Trust Fund has created an Interest Remittance Report Form for banks to use. If it is more convenient, you may create your own forms, as long as the required information listed below is included.

Each report should indicate:
  • Name, address and telephone number of the bank;
  • Name and telephone number of designated contact person;
  • ABA routing number;
  • Dates of the reporting period, including first and last days on which interest was earned. For each account, the report should include:
  • Name of attorney or law firm on the IOLTA account;
  • Account number;
  • Rate of interest;
  • Account balance on which interest is calculated;
  • Gross interest earned;
  • Allowable service charges (if any) deducted; (See Account Fees and Charges, below.)
  • An explanation of any service charges in excess of $20;
  • Net interest earned.

As of June 1, 2007 banks are required to submit their Interest Remittance Report electronically. Please check here for details or call Terri L. Smith (312/938-3001 or 800/624-8962) to obtain technical specifications.


Account Fees and Charges
Most of the financial institutions that participate in the IOLTA program in Illinois waive all service charges and handling fees on these accounts. Most banks have decided to waive fees and charges due to the fact that the interest earned on IOLTA accounts is used for charitable purposes that are important to their attorney customers and to the community.

Allowable reasonable fees for IOLTA accounts are per check charges, per deposit charges, a fee in lieu of a minimum balance, federal deposit insurance fees, automated investment ("sweep") fees, and a reasonable maintenance fee, if those fees are charged on comparable bank accounts maintained by non-IOLTA depositors. All other fees are the responsibility of, and may be charged to, the lawyer or law firm maintaining the IOLTA account.

Under no circumstances can the negative interest balance be deducted from the corpus of an IOLTA account. These accounts contain client funds held in trust by attorneys. Any invasion of the corpus puts the attorney in the position of misappropriating client funds.


Some Helpful Operational Tips
  • Code all IOLTA accounts to make them easily identifiable as IOLTA accounts, to insure that the interest is sent to the Lawyers Trust Fund. (Note: We are often contacted by banks that have failed to remit interest for significant periods of time because IOLTA accounts have not been properly identified. This creates accounting problems for the bank, for the Lawyers Trust Fund, and for the attorney customer. It also means that the attorney is, at least technically, not in compliance with the Illinois Rules of Professional Conduct.)

  • Flag all IOLTA accounts for the same closing date.

  • Report any errors in remittances to the Lawyers Trust Fund. Refunds for excess payments will be made upon receipt of account documentation.

  • Notify the Lawyers Trust Fund when an account is opened or is closed, either by fax (312/938-3091) or by mail (Lawyers Trust Fund, Two Prudential Plaza, 180 North Stetson Ave., Suite 820, Chicago, Illinois 60601), using the Notice of Account Closing form.

IOLTA Instructions for Banks: A Quick Recap
  • Use the Lawyers Trust Fund's TIN # (contact the LTF for details) for all IOLTA accounts.

  • Do not identify the Lawyers Trust Fund as the designee, trustee or owner in the account name or on printed checks.

  • Send all W-9's to the Lawyers Trust Fund for certification.

  • No Form 1099 needs to be prepared for IOLTA accounts.

  • Remit interest electronically on IOLTA accounts monthly.

  • When approved, remittance made by ACH should be sent to: Bank of America (contact the LTF for details.

  • When approved, remittance made by check should be mailed to: Lawyers Trust Fund of Illinois, 12976 Collections Center Drive, Chicago, IL 60693.

  • Send an Interest Remittance Report for each remittance payment, which includes an itemization of interest earned, approved service charges for each account, dates of reporting period, met interest and account balance.

  • Send Interest Remittance Reports to: Lawyers Trust Fund of Illinois, Two Prudential Plaza, 180 North Stetson Ave., Suite 820, Chicago, Illinois 60601, email to IOLTAREPORT@ltf.org, or fax to 312-938-3091.

  • Negative netting is prohibited. Banks cannot take funds from the corpus of the account.

For More Information
We hope that this information is useful to you as you assist your attorney and law firm customers in meeting their ethical obligations under the IOLTA rule. The Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois publishes an informative booklet on attorneys' client trust accounts: The Client Trust Account Handbook: A Guide to Creating and Maintaining Client Trust Accounts for Illinois Attorneys. Click here to link to the handbook's table of contents.

If you any questions about the IOLTA or the Lawyers Trust Fund, please call Terri L. Smith, Director of Banking/MIS at 800.624.8962 or 312.938.3001.


Two Prudential Plaza   180 North Stetson Ave.   Suite 820   Chicago, IL 60601   (312) 938-2906 [Main]   (312) 938-3091 [Fax]    1-800-624-8962 [Toll Free]