Rule 43(a), Ariz.R.Sup.Ct. states: “Funds belonging in whole or in part to a client or third person in connection with a representation shall be kept separate and apart from the lawyer's personal and business accounts. All such funds shall be deposited into one or more trust accounts that are labeled as such.”
IOLTA - Interest on Lawyers Trust Account
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As an Arizona lawyer, am I required to have an IOLTA or other trust account?
Are there other types of trust accounts I can set up other than an IOLTA?
Rule 43(f)(1)(B), Ariz.R.Sup.Ct. states: “a separate interest-bearing or dividend-earning trust account for the particular client or client's matter on which the interest or dividends, net of any reasonable service or other charges or fees imposed by the financial institution or investment company in connection with the account, will be paid to the client;” or
Rule 43(f)(1)(C), Ariz.R.Sup.Ct. states: “a pooled interest-bearing or dividend-earning trust account, with subaccounting provided by the lawyer or the law firm, which will provide for computation of interest or dividends earned by each client's funds and the payment thereof, net of any reasonable service or other charges or fees imposed by the financial institution or investment company in connection with the account, to the client.”
Please review Rule 43(f)(2), Ariz.R.Sup.Ct. to determine which type of account may best fit your needs.
Is there a special form I need to provide to the bank to open an IOLTA?
Yes – you will need the Notification to IOLTA Approved Financial Institution to open the account. Once you have opened or closed an IOLTA you will need to submit the IOLTA Enrollment Form to the Arizona Foundation for Legal Services and Education.
For your convenience NB|AZ has these forms available when you open an IOLTA with us.
Can the bank charge fees on my IOLTA? If so, how can I pay these?
Yes, fees can be charged on the IOLTA. You may deposit funds into the IOLTA to cover these fees. Rule 43(a) Ariz.R.Sup.Ct. states: “(a) No funds belonging to the lawyer or law firm shall be deposited into a trust account established pursuant to this rule except as follows: 1. Funds to pay service or other charges or fees imposed by the financial institution that are related to operation of the trust account, but only in an amount reasonably estimated to be necessary for that purpose may be deposited therein.”
Rule 42, E.R. 1.15(b) Ariz.R.Sup.Ct. also allows fund to be deposited to cover fees charged. It states: “(b) A lawyer may deposit the lawyer's own funds in a client trust account only for the following purposes and only in an amount reasonably estimated to be necessary to fulfill the stated purposes:
(1) to pay service or other charges or fees imposed by the financial institution that are related to operation of the trust account[.]”
Can I accept credit card deposits into my IOLTA?
Yes, you can accept credit card deposits into your IOLTA. Multiple sections of Rule 43, Ariz.R.Sup.Ct. address credit card deposits. See Rule 43(a)(2), (b)(3) and comment [2009 Amendment] and Rule 42, E.R. 1.15 and comment [2009 Amendment], Ariz.R.Sup.Ct.
Rule 43(a)(2) Ariz.R.Sup.Ct. addresses fees charged for credit card transactions: “(2) Funds to pay merchant fees or credit card transaction charges or to offset debits for credit card chargebacks, but only in an amount reasonably estimated to be necessary for those purposes may be deposited therein.”
Rule 42, E.R. 1.15 Ariz.R.Sup.Ct. allows funds to be deposited to cover credit card fees. It states: “(b) A lawyer may deposit the lawyer's own funds in a client trust account only for the following purposes and only in an amount reasonably estimated to be necessary to fulfill the stated purposes:
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(2) to pay any merchant fees or credit card transaction fees or to offset debits for credit card chargebacks.”
Rule 42, E.R. 1.15, Ariz.R.Sup.Ct.
Additional tips from the State Bar of Arizona.