IOLTA for Lawyers

Enrollment Requirements

If you are a lawyer in private practice in the state of Maryland, you must place all eligible client trust funds into an IOLTA account. Your escrow accounts and banking relations will remain the same, and Maryland Legal Services Corporation will pay reasonable and customary service charges on your IOLTA escrow account.

To establish IOLTA accounts, attorneys should complete the New IOLTA Account Enrollment form. Attorneys should give the original completed form to the bank and ensure the bank emails a copy to MLSC. Contact information can be found on page 2 of the form.

Download the Enrollment Form: [PDF] | [Word Doc]

Click here to see a list of financial institutions currently approved by the Attorney Grievance Commission to hold IOLTA deposits pursuant to Maryland rule 19-411.

IOLTA Honor Roll

By opening your IOLTA account at an IOLTA Honor Roll financial institution, you are going above and beyond in support of civil legal services for low-income Marylanders. Learn more about the Honor Roll.


All lawyers must comply with Maryland’s IOLTA law, but compliance does not necessarily require having an IOLTA account. You must open an IOLTA account if you are holding short-term or nominal trust funds of at least $3,500 on a regular basis.

If you are hold client trust funds but the average monthly balance is less than $3,500, you are eligible for a waiver, and you should open a non-interest-bearing escrow account. The waiver is elected when you submit the Annual IOLTA Compliance Report.

If you do not hold any client trust funds due your professional activities (retired, government service, not in private practice, corporate counsel, etc.), you do not need to open an escrow account. You will certify such activities when you submit the Annual IOLTA Compliance Report.

If either of the above circumstances change, you must establish an IOLTA account and notify MLSC.


Compliance Reporting Requirements

All Maryland-admitted attorneys are required to report annually on their compliance with Maryland’s IOLTA program. The Administrative Office of the Courts will send all annual compliance filing notifications electronically – no paper reports will be mailed. Annual compliance reports MUST be filed online using the Attorney Information System. The annual notices will be sent in mid-July, with an annual deadline to file compliance reports of September 10.

MLSC cannot update your contact information. You must ensure your information is up-to-date in AIS.

If you have technical questions regarding registering for or using AIS, please contact Service Now at (410) 260-1114. If you have questions regarding IOLTA, please review the below FAQs and contact us.

Please note one change in compliance options this year for clarity: If you conduct legal activities in Maryland, but hold your IOLTA account in the District of Columbia or a contiguous state, select option 4 and indicate the jurisdiction. If you do not conduct legal activities in Maryland (and therefore do not need a Maryland IOLTA account, even if you may hold an IOLTA account in another state), please select option 5.


FAQs for Lawyers

General IOLTA Questions

Q: How does an attorney know when to place trust funds in an IOLTA account?

A: Lawyers exercise their discretion in determining whether a given client’s trust deposit is of sufficient size or will be held for sufficient duration to justify the cost of being individually invested for a client. Funds are placed in an IOLTA account only when they are nominal in amount or being held for a short period of time. If the funds are not placed in an IOLTA account, they shall be otherwise deposited or invested, separate from the attorney’s own accounts, as directed by the client or determined by the attorney.

A Maryland State Bar Association study estimated that it would cost at least $50 to create and administer a separate client interest-bearing account. Therefore, $50 serves as a benchmark for the lawyer to place the client funds into an IOLTA account when “the interest that it would earn: (1) would not exceed $50; or (2) would exceed $50, but would not cover the cost of administering an interest bearing account on which interest is payable to the client or beneficial owner.” MD. Bus. Occ. Code Ann. §10-303.

Q: What effect does IOLTA have on clients?

A: IOLTA has no effect on clients. When no interest is earned on funds in attorney trust accounts which are nominal or short-term, no one benefits except the financial institutions. The ABA’s Standing Committee on Ethics and Professional Responsibility, in Formal Opinion 348 (1981) approving attorney participation in state IOLTA programs, found “that the practical effect is to shift a part of the economic benefit from depository institutions to tax-exempt organizations. There is no economic injury to any client. The program creates income where there was none before.”

While some lawyers may prefer to inform their clients about the IOLTA program, such notification is not required. State law requires attorneys to place nominal and short-term client trust funds into an IOLTA account.

Q: What are the tax consequences?

A: The Internal Revenue Service approved IOLTA in Revenue Ruling 81-209. There are no tax consequences for either the lawyer or the client if IRS requirements are met. The IRS stated that the IOLTA program must apply to the nominal and short-term funds of all clients of a participating lawyer. If an individual could elect not to participate in the program, an “assignment of income” problem would arise and taxable income result. Under the IOLTA requirement of Maryland law, no tax liability or tax benefits are created by the program for you or your client. Since MLSC is the recipient of the interest, your financial institution is instructed to use the MLSC federal ID number on your IOLTA account.

Q: Are attorneys with very small trust accounts required to participate in the IOLTA program?

A: No. Maryland Business Occupations Code Ann., Section 10-303 (c) permits the Administrative Office of the Courts, in consultation with MLSC, to excuse an attorney or law firm from participating if it “demonstrates that it will cost the MLSC Fund more in service charges to open and maintain an attorney trust account for the purposes of the MLSC Fund than will be generated in interest by the attorney trust account.”

While the charges vary between participating financial institutions, in most instances an attorney who does not maintain an average monthly balance of at least $3,500 in a trust account will not be required to participate. The Annual IOLTA Compliance form permits attorneys to request a waiver from the IOLTA requirement by affirming that their combined trust account balance does not exceed an average monthly balance of at least $3,500. In addition, an IOLTA account may be terminated by the attorney if the balance drops below $3,500 and is reasonably expected to remain so.

Q: Does IOLTA impose additional administrative burdens or bookkeeping requirements upon lawyers?

A: No. The burden for attorneys of accounting for client funds remains the same; separate attorney trust accounts are already mandated by statute and rule. No income to clients or attorneys would be created, as confirmed by Internal Revenue Service rulings. The IOLTA statute simply requires that some attorney trust accounts be re-designated as IOLTA accounts, with a simple notice and sign-up procedure taking about ten minutes.

Your bank automatically sends the interest directly to MLSC. Your client escrow account statements will remain the same. Upon request, MLSC will provide you with an annual informational statement of the interest your account generated for legal services.

Q: Are there any other administrative or reporting requirements that I need to be aware of to ensure my compliance with Maryland’s IOLTA Program?

A: The Maryland Court of Appeals adopted Maryland Rule 19-409, effective January 1, 2002, requiring all Maryland-admitted attorneys to report annually on their compliance with the IOLTA program. IOLTA compliance reporting must be completed online through the Attorney Information System (AIS). You must first register with AIS in order to complete the online reports. There are no additional reports or administrative requirements mandated by Maryland’s IOLTA program.

Q: Who pays the bank service charges? Will they be charged against attorney or client funds?

A: MLSC will pay for regular and ongoing customary service charges relating to the operation of the IOLTA account, but will not absorb the costs of special charges covered in Maryland Rule 19-411(b)(1)(D), which states that financial institutions shall “not deduct from interest on the [IOLTA] account that otherwise would be payable to the Maryland Legal Services Corporation any fees for wire transfers, presentations against insufficient funds, certified checks, overdrafts, deposits for dishonored items, and account reconciliation services.” Financial institutions must not deduct these charges from the principal in the IOLTA accounts but may charge the attorneys these fees.

Attorneys should convert IOLTA accounts to non-interest-bearing accounts if their financial institution’s service charges regularly exceed interest generated on the accounts (Maryland Business Occupations Code, Section 10-303(c)). MLSC must bear the cost of the maintenance of an IOLTA account under these circumstances. Bearing these costs defeats the purpose of the IOLTA program, which is to generate funding for civil legal services.

Q: What is the Maryland Affordable Housing Trust (MAHT) program, and how does it affect IOLTA?

A: During the 1992 Session, the Maryland General Assembly enacted a new program, modeled on IOLTA, to help fund affordable housing in Maryland. The Maryland Affordable Housing Trust statute requires real estate title companies to place their small or short-term client trust funds which are held in escrow into an MAHT account generating interest for affordable housing. MAHT is administered by the Maryland Department of Housing and Community Development.

In some instances, attorneys who maintain private real estate law practices and operate title companies may have a choice whether to place a client escrow deposit into their IOLTA or MAHT account. Whenever possible, MLSC encourages attorneys to deposit all eligible trust funds into their IOLTA to help provide critically needed legal services to low-income Marylanders, in keeping with an attorney’s obligations under Rule 6.1 of the Maryland Rules of Professional Conduct.

Q: What do I do with unclaimed principal balances in an existing IOLTA account?

A: Under Commercial Law Article §§17-310 through 17-312 and Maryland Rule 19-414, unclaimed funds are to be sent to the Unclaimed Property Fund at the Maryland Comptroller's Office. Contact 410-767-1700 or for more information. Also see Maryland Rule 19-414 for definitions and duties. 

Q: Do I have to open or change my IOLTA account over to an Honor Roll financial institution?

A: No. Financial institutions that are members of the IOLTA Honor Roll help support legal aid to Maryland’s low-income population by paying premium rates on IOLTA accounts. While we strongly encourage attorneys to use Honor Roll financial institutions and help support the provision of critically needed legal aid to those Marylanders unable to afford such services, you are not required to do so.

Q: How does FDIC insurance apply to IOLTA accounts?

A: The FDIC treats IOLTA accounts as Fiduciary accounts, meaning that, as long as certain requirements (including the account name indicating it is an IOLTA/trust account and other record-keeping) are met, the account is insured per client up to the standard FDIC limit of $250,000. Please see for more information. Please note that, since the $250,000 limit is an aggregate, if a particular client also has a personal account at the financial institution where you hold your IOLTA account, their personal account will count toward that individual client’s $250,000 limit.

Compliance Reporting Questions

Q: What are the compliance options?

A: When completing the Annual IOLTA Compliance Report, you will declare your compliance with the IOLTA program by choosing one of the following options:

  • You maintain a Maryland IOLTA account and deposit IOLTA-eligible trust funds there.
  • You belong to a law firm with a reporting attorney and:
    • You deposit all IOLTA-eligible trust funds into your law firm’s IOLTA account, which will be reported by your firm’s “reporting attorney” OR
    • You are the designated “reporting attorney” for your law firm and are reporting on the firm’s IOLTA account, which holds all IOLTA-eligible trust funds.
  • You elect a waiver of participation in the IOLTA program because you hold client trust funds, but the average monthly balance is less than $3,500.
  • You conduct legal acitivites in Maryland but maintain your IOLTA account(s) in the District of Columbia or a contiguous state to Maryland and are in compliance in that jurisdiction.
  • You do not have a client trust account due to your professional activities (no legal activities in Maryland, retired, government service, not in private practice, corporate counsel, etc.).
Q: I have new IOLTA account(s) since the last compliance report. What should I do?

A: If you have any new IOLTA accounts, you will report that you have deposited your IOLTA-eligible trust funds in an interest-bearing account. The online form indicates the IOLTA accounts that we currently have on file for you in our database. Please confirm whether these accounts are still open or if they have been closed.

If your new IOLTA accounts do not appear on the form, please see the next question.

Q: I do not see my IOLTA account(s) listed in the reporting system. What should I do?

A: If you have IOLTA accounts that are not listed, it may be because you are part of a law firm and your funds are deposited into the law firm’s IOLTA account. The account may belong to many attorneys in that firm but will be listed only under the IOLTA Reporting Attorney (usually the signer unless you have indicated otherwise). You may also not see your account listed if you opened it within the past 90 days. There is no need for you to take any action if any of the above describes your situation.

If the above situations do not apply, please contact your financial institution to ensure accurate reporting in the future. Meanwhile, report that you have deposited your IOLTA-eligible trust funds in an interest-bearing account and list the account information.

Q: I practice at a law firm and do not personally maintain escrow accounts. How should I submit compliance information?

A: Certify that you maintain and deposit all IOLTA-eligible funds in your firm’s IOLTA account(s) and fill in the name of the IOLTA Reporting Attorney for your law firm. Only the report from your firm’s IOLTA Reporting Attorney will include account information. You are not required to list the bank account information on your individual compliance report, but you must submit individual compliance information, listing the name of the IOLTA Reporting Attorney and law firm.

Q: Do I need to submit IOLTA compliance information if my law firm has already done so?

A: Yes. You are not required to list the bank account information on your individual compliance report, but you must submit individual compliance information, listing the name of the IOLTA Reporting Attorney and law firm.

Q: I am my law firm’s reporting attorney. How should I submit compliance information?

A. Certify that you are the IOLTA Reporting Attorney authorized by your firm to file the Annual IOLTA Compliance Report and provide your firm’s account information. List all account information for your firm. Your attorney colleagues must submit individual compliance information, listing the name of the IOLTA Reporting Attorney and law firm, but they do not need to report account information.

Q: I am a solo practitioner. How should I submit compliance information?

A: A solo practitioner should check whichever compliance option is applicable. See the first Compliance Reporting question above.

Q: I am a new admittee to the Maryland bar and have no IOLTA accounts. Do I have to set up an account immediately to comply?

A: You do not have to open an IOLTA account to comply with IOLTA. If you have no client accounts yet, choose the option that certifies that you do not have a client trust account due to your professional activities. Please note that an IOLTA account must be established if you are holding short-term or nominal trust funds of at least $3,500 on a regular basis. If this is not the case, you are eligible for a waiver, and you may open a non-interest-bearing escrow account. You may annually request a waiver on the report.

Q: I have a Maryland Affordable Housing Trust (MAHT) account instead of an IOLTA account. How should I submit compliance information?

A: Choose the option that certifies that you do not have a client trust account due to your professional activities. Do not report MAHT account information.

Q: I do not maintain escrow accounts at all. I bill my clients only after services have been rendered, and do not hold trust funds on behalf of my clients. How should I submit compliance information?

A: Choose the option that certifies that you do not have a client trust account due to your professional activities.

Q: How does a law firm update their Reporting Attorney Information?

A: When there is change in a law firm's reporting attorney, the information should be updated by both the new reporting attorney and each individual attorney at the law firm.

Individual Attorneys will make the update by first accessing the current year’s compliance report. They will select option 2a and use the “MD Bar Attorney Search” function to pick the name of the new reporting attorney. No additional selections are required.

The Current Year’s Reporting Attorney will make the update by completing 2a and selecting 2b which will indicate them as the firm's reporting attorney. They will then proceed to select the appropriate IOLTA compliance certification(s) for the firm within the same report.