These questions and answers are designed to help with the completion of the Annual IOLTA Compliance Reporting form – the printed or online version.
19. 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?
Answers to Questions about the IOLTA Compliance Report
A. 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.
A. Log into the Attorney Information System.
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. Our online form indicates the IOLTA accounts that we currently have on file for you in our database. Please simply confirm whether these accounts are still open or if they have been closed.
A. If you have IOLTA accounts that are not listed, it is due to one or more of the following reasons:
- You are part of a law firm and your funds are deposited into the law firm’s IOLTA account. The accounts may belong to many attorneys in that firm but will be listed only under only one person’s name, the IOLTA Reporting Attorney (usually the signer unless you have indicated otherwise).
- You have opened an account(s) within the past 90 days.
There is no need for you to take any action if any of the above describes your situation. If you have accounts that you believe should be listed, please contact your financial institution to ensure accurate reporting in the future. Meanwhile, you report that you have deposited your IOLTA-eligible trust funds in an interest-bearing account and list the account information.
A. Certify that you maintain and deposit all IOLTA-eligible funds in your firm’s IOLTA Account(s). Please be sure to fill in the name of the IOLTA Reporting Attorney for your law firm. The Reporting Attorney shall be authorized to report on all law firm IOLTA accounts. If you do not know the name of the IOLTA Reporting Attorney, please put in the name of your law firm.
Please note that the only the report by your firm’s IOLTA Reporting Attorney will list all of the banks and 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 or law firm.
A. Yes. Please note that you do not have to fill in the account information, but you do have to return the form. Certify that you maintain and deposit all IOLTA-eligible funds in your firm’s IOLTA Account(s). If you do not know the name of the IOLTA Reporting Attorney, put in the name of your law firm. See also the preceding question.
A. Certify that you are the IOLTA reporting attorney chosen and authorized by your firm to file the annual law firm IOLTA Compliance Report and provide your firm’s account information . The IOLTA Reporting Attorney shall be authorized to report on all law firm IOLTA accounts. You should list all of the banks and account information for your firm and fill in your name as the IOLTA Reporting Attorney for your law firm.
A. If your escrow account is set up as a non-interest bearing account and not an IOLTA because it usually contains less than $3,500 on a monthly basis, you may annually elect to waive participation in the IOLTA program, pursuant to Maryland Code, Business Occupations and Professions, Section 10-303(c).
Please note that if you need to change the status of your trust account(s), you must call the bank and follow the bank’s procedures. Maryland Legal Services Corporation and the Court of Appeals cannot convert the account(s) for you.
A. If you are a Maryland admitted attorney, but practicing in other jurisdictions and if you participate fully in the other jurisdiction’s IOLTA program, certify that you maintain your IOLTA account(s) in a state other than Maryland and fill in the name of at least one one of the other jurisdictions in the space provided. It is not necessary to provide your out-of-state IOLTA account information.
A. If you and/or your firm are fully participating in the IOLTA program of other jurisdictions, see answer to question above. Any IOLTA-eligible funds that are NOT maintained in other jurisdiction’s IOLTA program are fully subject to Maryland’s IOLTA requirement and such accounts must be reported accordingly.
A. You do not have to open an IOLTA account to be in compliance 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. For more information about establishing IOLTA accounts, see Questions 22 and 23 below.
Q19. 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. MLSC cannot change your address. You must update your address and contact information online using the Attorney Information System (AIS) available at www.mdcourts.gov/lawyers/ais.
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.
A. Lawyers continue to 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 trust 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 a 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.
A. The process of establishing an IOLTA account is simple, and once it is done no further time or effort on your part is required. Fill out the Notice of New IOLTA Account form and submit it to an approved IOLTA financial institution and send a copy to MLSC. That is all you have to do! MLSC and your financial institution will do the rest.