Friday, January 01, 2010
Trust Account Mandatory
KENTUCKY....
Because of declining interest rates, IOLTA (Interest on Lawyers' Trust Accounts) plummeted from $1.1million a few years ago to $400,000 last year. After being recommended by the American Bar Association twenty-two years ago, beginning in January, it will become mandatory for lawyers to participate in a banking program that raises money for legal aid to help the poor, making Kentucky one of forty other states requiring mandatory participation. In 1986, the Kentucky Supreme Court approved a lawyers' trust account program with voluntary participation, but, five years later, it made lawyers "opt out" of it, but, at the time, the court resisted making it mandatory. Under the accounts, interest generated by small sums of clients' money, which lawyers frequently hold for brief periods, will be pooled statewide and used for public-interest projects. Lawyers are exempt if they have no pooled client escrow account, or if a particular client has enough money in escrow to earn interest that would exceed expenses.
Because of declining interest rates, IOLTA (Interest on Lawyers' Trust Accounts) plummeted from $1.1million a few years ago to $400,000 last year. After being recommended by the American Bar Association twenty-two years ago, beginning in January, it will become mandatory for lawyers to participate in a banking program that raises money for legal aid to help the poor, making Kentucky one of forty other states requiring mandatory participation. In 1986, the Kentucky Supreme Court approved a lawyers' trust account program with voluntary participation, but, five years later, it made lawyers "opt out" of it, but, at the time, the court resisted making it mandatory. Under the accounts, interest generated by small sums of clients' money, which lawyers frequently hold for brief periods, will be pooled statewide and used for public-interest projects. Lawyers are exempt if they have no pooled client escrow account, or if a particular client has enough money in escrow to earn interest that would exceed expenses.
# posted by Homer Owens @ 10:58 AM 
