IOLTA Account Instructions

This page contains the key operational instructions for financial institutions that offer IOLTA accounts. The forms needed for opening and reporting activity on IOLTA accounts are available here.

Opening IOLTA Accounts

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


Maintaining IOLTA Accounts

Calculating Interest
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. Rule of Professional Conduct 1.15(f) 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.

Allowable Reasonable Fees
Most financial institutions that hold IOLTA accounts in Illinois waive services charges and fees on these accounts. These banks recognize that the interest earned on IOLTA accounts is used for charitable purposes that are important to their lawyer customers and to their communities.

Under Rule 1.15, only allowable reasonable fees may be assessed against the interest earned on IOLTA accounts. Pursuant to the rule, allowable reasonable fees for IOLTA accounts may include: per check charges, per deposit charges, fees in lieu of minimum balances, federal deposit insurance fees, automated investment (“sweep”) fees, and reasonable maintenance fees, if these 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.

Negative Netting Prohibited
Negative netting is not permitted under Rule 1.15. Fees charged in excess of the earnings accrued on an individual account for any month may not be taken out of earnings accrued on other IOLTA accounts or from the principal of the account. Under no circumstances can a negative interest balance be deducted from the corpus of an IOLTA account. These accounts contain client funds held in trust by lawyers. Any invasion of the corpus puts the lawyer in the position of misappropriating client funds, a serious violation of lawyers’ professional duties. 

Remitting Interest
Each lawyer or law firm should 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 should 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 allowable reasonable fee(s) if any; the gross earnings for the remittance period; and the net amount of earnings remitted. 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.

Remittances should be sent to the Lawyers Trust Fund electronically via ACH unless otherwise agreed to by LTF. If interest is remitted by check with LTF approval, checks should be mailed to: Lawyers Trust Fund of Illinois, 12976 Collections Center Drive, Chicago, IL 60693.

Remittance Reporting – LTF Form
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. Use of LTF’s Interest Remittance Report form [XLSX] is highly encouraged to ensure all of the required information is provided. The completed report must contain the following information:

  1. Dates of reporting period
  2. Rate of interest paid
  3. Gross interest
  4. Allowable reasonable fees, if any
  5. Net interest remitted
  6. Account balance

If an alternative submission method has been approved by LTF, submit reports via email to IOLTAREPORT@ltf.org, by fax to 312-938-3091, or by mail to the Lawyers Trust Fund of Illinois, 12976 Collections Center Drive, Chicago, IL 60693.

Remittance Reporting – Alternative Form
Financial institutions may use their own forms to accompany remittance. You must ensure that the form includes the following required information:

  1. Name, address and telephone number of the bank
  2. Name and telephone number of designated contact person
  3. ABA routing number
  4. Dates of the reporting period, including the first and last days on which interest was earned.
  5. For each account, the report must 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 reasonable fees (if any) deducted
    • Explanation of any allowable reasonable fees in excess of $20
    • Net interest earned.

Interest Remittance Reports must be submitted electronically. Please email to IOLTAREPORT@ltf.org, or contact Director of Banking Terri L. Smith-Ashford via email or at 312-938-3001 or 800-624-8962 to obtain technical specifications.

Key Operational Tips

  • Code all IOLTA accounts to make their IOLTA status easily identifiable and ensure 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, the Lawyers Trust Fund, and the lawyer. It also means that the lawyer 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 in writing to the Lawyers Trust Fund. Refunds for excess payments will be made upon receipt of adequate account documentation.
  • Use the Notice of Account Closing [PDF] to notify the Lawyers Trust Fund when an account is opened or is closed. Submit it by email (IOLTAREPORT@ltf.org), fax (312-938-3091), or mail (Lawyers Trust Fund, Two Prudential Plaza, 180 North Stetson Ave., Suite 820, Chicago, Illinois 60601).

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.
  • W-9 forms may be sent to the Lawyers Trust Fund for certification.
  • No Form 1099 needs to be prepared for an IOLTA account. These forms may be suppressed.
  • Remit IOLTA account interest electronically, and on a monthly basis.
  • Remittances made by ACH should be sent to LTF’s 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 fees for each account, dates of reporting period, met interest and account balance.
  • Send Interest Remittance Reports via email to IOLTAREPORT@ltf.org; via fax to 312-938-3091; or via regular mail to Lawyers Trust Fund of Illinois, Two Prudential Plaza, 180 North Stetson Ave., Suite 820, Chicago, Illinois 60601.
  • Remember: Negative netting is prohibited. Banks cannot take funds from the corpus of an IOLTA account or from the interest accrued on other IOLTA accounts.

For More Information
If you have any questions about IOLTA please contact LTF Director of Banking Terri L. Smith-Ashford via email or at 312-938-3001 or 800-624-8962.

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