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Supreme Court Rules

Section/Rule:4- 1.155
Subject: Rule 4 - Rules Governing the Missouri Bar and the Judiciary - Rules of Professional Conduct Publication / Adopted Date:July 1, 2013
Topic:IOLTA AccountsRevised / Effective Date:


4-1.155 IOLTA ACCOUNTS

(a) IOLTA accounts shall be maintained in compliance with the following provisions:
(b) Allowable reasonable fees may be deducted from interest or dividends earned on an IOLTA account. Fees or charges in excess of the interest or dividends earned on the IOLTA account, for any month or quarter, shall not be taken from interest or dividends of any other IOLTA account. No fees or charges may be assessed against or deducted from the principal of any IOLTA account. All other fees are the responsibility of the lawyer or law firm and may be charged to the lawyer or law firm. Eligible institutions may elect to waive any or all fees on IOLTA accounts.

(c) The advisory committee may refuse to approve a financial institution and may revoke approval as provided in the regulations approved by this Court.
Comment

[1] Lawyers must maintain an IOLTA account unless they have been exempted by the foundation or all of their trust accounts are non-IOLTA accounts. Funds of a client or third party must be placed in an IOLTA account if the funds are of such a nominal amount or are expected to be held by the lawyer for such a short period of time that the funds cannot earn interest or dividend income for the client or third party in excess of the costs incurred to secure such income. Otherwise, the funds must be placed in a non-IOLTA account to earn interest for the client or third party.

[2] It is expected that a lawyer or law firm will exercise good faith judgment in determining whether funds of a client or third party should be placed in an IOLTA account or non-IOLTA account. All relevant factors should be considered in this determination, including, for example, the cost of establishing and maintaining accounts for the benefit of clients or third persons, service charges, accounting fees and tax reporting procedures, the nature of the transactions involved, and the likelihood of delay. It is also expected that placement of the funds will be reviewed at reasonable intervals if the funds remain on hand to determine if changed circumstances require further action with respect to such funds.

[3] The IOLTA requirements conform with the decision in Brown v. Legal Foundation a/Washington, 538 U.S. 216 (2003). IOLTA funds must be deposited with institutions paying interest and dividends comparable to rates paid to the institution's own other similarly-situated non-IOLTA customers. This recognizes that additional options have developed and are being offered in the marketplace by financial institutions from which qualifying IOLTA balances should also benefit. Apart from the important goal of fairness in the treatment of IOLTA funds, the most recent rule changes are important to the purposes of the IOLTA program: providing a source of funds to support civil legal services to the poor, improving the administration of justice, and promoting other programs for the benefit of the public as are specifically approved from time to time by this Court.

(Adopted Oct 30, 2012, eff. July 1, 2013.)