When a California attorney holds money for a client, it goes into a client trust account. Most are IOLTA accounts: Interest on Lawyers' Trust Accounts.
What an IOLTA account is
An IOLTA account is a pooled bank account that holds client funds that are small in amount or held for a short time. The interest goes to the State Bar's Legal Services Trust Fund, which funds legal aid, not to the attorney. For larger amounts held for a longer time, an attorney may use a separate interest bearing trust account for the client's benefit.
The rules
Rule 1.15 of the California Rules of Professional Conduct and Business and Professions Code section 6211 require, among other things, that the attorney:
- keep client funds separate from the firm's own money;
- keep a ledger for each client and reconcile the account regularly;
- notify the client promptly when funds are received;
- pay out funds promptly as the client is entitled;
- account to the client on request.
California attorneys must also report on their trust accounts to the State Bar each year.
What you can expect
You receive written confirmation when your funds arrive and when payments are sent. If you ask, you receive an accounting of all funds held for you.
A note on wire instructions
The trust account details are given to you by the attorney directly, never published on a website, and must be confirmed by telephone before you send funds. Read how to verify wire instructions.