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LAWYER TRUST ACCOUNTS

NEW REQUIREMENTS FOR BANKS THAT HANDLE LAWYER TRUST ACCOUNTS By Sonia J. Buck, Esq. The Maine Supreme Judicial Court’s July 1, 2015 revisions to the attorney IOLTA (Interest on Lawyer Trust Accounts) rules resulted in significant changes for Maine banks and credit unions carrying such accounts for their lawyer or law firm clients. IOLTA — BACKGROUND In the practice of law, it is routine for lawyers to receive client funds, for fee retainers, or other future client-related use. In most cases, these deposits are relatively small amounts, or funds that will only be held in trust for a short period of time.  It would not be efficient or practical to establish separate interest bearing accounts for each individual client deposit. Accordingly, lawyers with trust accounts are required to participate in the IOLTA program. Funds are placed in an interest bearing account with an IOLTA-eligible financial institution, with the interest paid to the Maine Justice Foundation. The Foundation manages the interest account and works with Maine non-profits to provide legal services pro bono publico (that is, “for the good of the public”). The organizations funded by Maine IOLTA include: Pine Tree Legal Services, Volunteer Lawyer’s Project, Legal Services for the Elderly, Cumberland Legal Aid Clinic, Maine Equal Justice Project, and the Immigrant Legal Advocacy Project. IOLTA is an effective and long-standing mechanism for raising money to fund charitable organizations providing civil legal services to Maine’s indigent population – those most vulnerable in need of access to justice. NEW REPORTING REQUIREMENTS A new reporting rule has been put into place that serves as an additional layer of lawyer regulation and oversight...