Q. Must I open a trust account even though I never hold funds belonging to someone else?

A. Most lawyers in private practice need to have a trust account because they handle client or third party funds at some point in the course of their practice.  Lawyers should understand which funds are client and third-party funds that must be held in trust pursuant to Rule of Professional Conduct 1.15. While most would recognize that escrow funds or settlement funds must be deposited into a trust account, some do not realize the same is true for funds advanced by a client to pay filing fees, and for bond deposit refunds where the lawyer has agreed to retain only a portion of the refund as his fee and to pay over the balance to the client or the client's relative.  And very importantly, Rule 1.15 requires that funds received to secure payment of legal fees and expenses be deposited in a client trust account, to be withdrawn by the lawyer only as fees are earned and expenses incurred.  See the Client Trust Account Handbook for a detailed discussion of what funds must be maintained in a trust account.



Q. What if I currently have a non-interest bearing trust account for pooled client funds?

A. Rule 1.15(a) prohibits use of non-interest bearing trust accounts.  Trust funds can be held in only two types of accounts, 1) an IOLTA account, a pooled interest-bearing trust account established with an eligible financial institution with the Lawyers Trust Fund of Illinois designated as income beneficiary, for the deposit of nominal or short-term funds of clients or third persons; or 2) a separate, single-client, interest-bearing non-IOLTA trust account with the client designated as income beneficiary.  A lawyer with a non-interest bearing account should convert it to one of these two types of interest-bearing accounts.  Instructions for establishing an IOLTA account are available from the Lawyers Trust Fund.



Q. I went to my bank to open an IOLTA account, and no one knew what I was talking about. Now what do I do?

A.  There are more than 400 Illinois banks eligible to hold IOLTA deposits under Rule 1.15.  Unfortunately, not all bank employees are familiar with the operation of IOLTA accounts.  Instructions for banks and notice of enrollment forms are available at  For more assistance, bank employees and lawyers can also contact LTF Director of Banking Terri Smith at 312-938-3001 or



Q. What happens if I don’t provide the trust account information required by Rule 756(d)?

A. You will not be registered. The failure to provide the information will be treated the same as a failure to pay the annual fee. Under Rule 756, the ARDC is required to strike from the master roll of attorneys any lawyer who has failed to comply by February 1 of the registration year, and if you are stricken from the master roll for failure to properly register, you will not be authorized to practice law until you are reinstated by complying with all of the registration requirements.



Q. Can I open a non-IOLTA trust account for the benefit of one client?

A.  When client funds are neither nominal nor expected to be held for a short period of time, they should be deposited into a separate interest- or dividend-bearing non-IOLTA client trust account with the client designated as the income beneficiary.  Pursuant to Rule 1.15(f), client funds that are nominal in amount or expected to be held for a short period of time should be deposited in an IOLTA account. 

In determining whether funds are nominal in amount or are expected to be held for a short period of time, Rule 1.15(g) provides that a lawyer or law firm "should exercise reasonable judgment" taking into consideration such factors as:

(1) interest - the amount of interest which the funds would earn during the period they are expected to be held and the likelihood of delay in the relevant transaction or proceeding; 

(2) costs - the cost of establishing and administering the account, including the cost of the lawyer's services;

(3) capability - the capability of the financial institution, through subaccounting, to calculate and pay interest earned by each client's funds, net of any transaction costs, to the individual client.  

Whether it is an IOLTA account or a non-IOLTA client trust account, the account must be interest or dividend bearing.  Under no circumstances may the lawyer or law firm receive the interest generated on the account.



Q. I have a license in Missouri and Illinois. Our firm’s office is in Missouri, but occasionally I’ll handle an Illinois case for an Illinois client. Our firm has a trust account at a Missouri bank. Must I also have an Illinois account?

A. Rule 1.15(a) states: "Funds [of clients or third persons] shall be kept in a separate account maintained in the state where the lawyer's office is situated, or elsewhere with the consent of the client or third person."  When a lawyer participates in an IOLTA program in another state where the law office is situated, the lawyer's ethical obligation is satisfied by compliance with the IOLTA rule of the state in which the office is situated.  See also ILRPC 8.5(b) (Choice of Law).

Further guidance from the Lawyers Trust Fund states:

"The location of your IOLTA account is determined not by where you are licensed, but by the state where your office is situated, where you practice, and where your clients reside or do business, unless otherwise directed by your client. 

For example, a Missouri lawyer whose sole office is in Missouri but who occasionally represents clients in Illinois need not establish an Illinois IOLTA account to handle client funds.  However, the lawyer should handle client funds as required by the safekeeping of property rules in Missouri, including participation in that state's IOLTA program as appropriate.  In contrast, a lawyer or law firm with bona fide offices situated in both Florida and Illinois would require an IOLTA account in each state."

Q. Do I disclose the Missouri trust account on the report form?

A. Yes.



Q. I don’t have a trust account now, but what if I open one during the year after I submit my registration form, am I required to supplement my answers on the report form?

A. The rule does not require a supplemental report. You will report the account in the next year's registration.



Q. I am also an agent for a title insurance company. Do I disclose the trust account I maintain as a title insurance agent?

A. Rule 1.15(a) comes into play when a lawyer comes into possession of the property of clients or third persons “in connection with a representation.”  If the funds received are in connection with the representation of clients in real estate transactions, the trust account must be disclosed. If the lawyer’s holding of property for another was clearly personal (e.g., treasurer of the high school alumni association), the lawyer would not disclose that trust account on the report form.



Q. I am an associate in a firm, and I have no authority over the firm's trust account. Can I just let the firm partners report the firm's account?

A. No. The rule requires that each lawyer report trust account information. Each member of a firm, partner or associate, has responsibility to ascertain that the firm has an appropriate account. The ARDC has procedures that allow partners and associates in firms to join in a report by a designated firm partner, but the procedure is available only where the firm collects registration forms and submits the collected forms and payment of the firm lawyers' registration fees as a package. See Law Firm Reporting.



Q. Our firm has an account that is used to maintain retainers paid by our clients.  Our agreements with the clients provide that the firm will bill against the retainer and withdraw the billed amounts until the retainer is exhausted, at which time the client will be billed for any further amounts due.  If a representation is concluded and the retainer has not been exhausted, the balance is returned to the client.  Is this a 'trust account' which must be reported on the registration form?

A. Yes.  Rule 1.15(c) requires that funds received to secure payment of legal fees and expenses be deposited in a client trust account, to be withdrawn by the lawyer only as fees are earned and expenses incurred.  Such a trust account is subject to all the requirements of Rule 1.15, and must be reported on the registration form.  Note that Rule 1.15 (c) does provide for some exceptions to the use of trust accounts for the deposit of fees, but those only apply to fixed fees, general retainers, or advance payment retainers.  See Rule 1.15(c)