What is IOLTA?
Attorneys routinely receive client funds to be held in trust for future use. If the amount is large or the funds are to be held for a long period of time, the attorney customarily places these funds at interest for the benefit of the client. However, in the case of amounts that are small or to be held for a short time, it is impractical to establish separate interest-bearing accounts for individual clients.
Through the Interest on Lawyer Trust Accounts (IOLTA) program, attorneys place these nominal and short-term funds into a commingled escrow account that can generate interest income. Financial institutions send this interest income to Maryland Legal Services Corporation for grants to programs that provide civil legal services for low-income Marylanders.
The Maryland General Assembly established IOLTA in Maryland concurrently with MLSC in 1982 as a voluntary program. The program became mandatory for Maryland attorneys in 1989. Click here for more information about statutes and court rules governing IOLTA.
The United States IOLTA programs, modeled on similar programs begun successfully in Canada, Australia and elsewhere in the 1970s, originated in Florida in 1981 to help replace federal and state funding cuts to civil legal services. Maryland was the fourth state to establish an IOLTA program. All 50 states as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands have IOLTA programs. MLSC is a proud member of the National Association of IOLTA Programs.