The Delaware Interest on Lawyer Trust Accounts Program (IOLTA) was first authorized on September 29, 1983 by an Order of the Delaware Supreme Court. The program has been active continuously since its inception. Its success reflects and depends upon the close cooperation of Delaware's legal and financial communities. The fund is comprised of interest accruing on lawyers' aggregated escrow accounts that contain client deposits which are small in amount or held for a short period of time. The interest collected on participating accounts is transferred to the Delaware Bar Foundation (the Foundation) and distributed in the form of grants to agencies that promote and improve legal services for the poor, and the administration of justice, as well as for such other programs of public interest as may be approved by the Supreme Court.

     Under Rule 1.15 of the Delaware Lawyers’ Rules of Professional Conduct, each active lawyer is required to determine whether moneys placed in his or her trust account are either (1) large and/or long-term deposits; or (2) small and/or short-term deposits. With respect to the former category, a lawyer has a fiduciary obliga­tion to hold each such deposit in its own separate account at interest for the benefit of the recipient. Small and/or short-term deposits, however, are unlikely to generate a sufficient amount of interest while held in escrow to offset the administrative cost of opening a separate account for each such deposit, thereby generating interest for the beneficia­ry. Rule 1.15 requires that the moneys that fall into the second category be pooled and the interest thereon be paid to the Foundation. The Foundation receives the interest directly from all Delaware banks where such accounts have been established and combines all of the deposits into a Foundation IOLTA account which is then used to fund legal services to the poor, law related education, improvements to the administration of justice and such other programs that serve the public interest. The funds in the IOLTA account can only be used for the purposes approved by the Delaware Supreme Court.

     On June 10, 2010, the Delaware Supreme Court entered an order amending Rule 1.15 of the Delaware Lawyers’ Rules Of Professional Conduct, as it relates to its IOLTA (Interest On Lawyer Trust Accounts) program to make participation in the IOLTA program mandatory and to require that IOLTA funds be maintained in financial institutions that provide so-called “interest rate comparability” to IOLTA accounts. The revised rule can be found on the Court's website, http://courts.delaware.gov. Interest rate comparability means that the interest rate payable by financial institutions for IOLTA accounts must be comparable to rates paid by the same institution on its other accounts with similar attributes. The Court took this action upon the recommendation of the Court’s Advisory Committee on Interest On Lawyer Trust Accounts Program (the “IOLTA Committee”) and the Delaware Bar Foundation following a year-long process of multiple meetings with numerous Delaware lawyers and bankers. Delaware is the 43rd jurisdiction to convert its IOLTA program from opt out to mandatory status and the 33nd jurisdiction to adopt interest rate comparability. The new rule provisions become effective November 1, 2010, which means that lawyers have until November 1 to comply with these new provisions. Participation by Delaware lawyers is now required, not optional, with a limited ability of the Bar Foundation to exempt accounts which cannot be expected to generate enough interest to cover certain account fees. After November 1, IOLTA accounts may only be maintained at eligible financial institutions. As the Court's designated administrator of the IOLTA program, the Foundation will maintain a list of those financial institutions on its website that are eligible to hold IOLTA accounts. That list is expected to be completed and posted on this website no later than October 1, 2010. The Foundation is working on new website additions to assist both lawyers and financial institutions to understand the new rule provisions. It encourages lawyers and financial institutions to check the website later this summer for new additions and more helpful information. As always, questions can be directed to the Foundation's offices at (302)658-0773.

• Participation Letter, Interest on Lawyers' Trust Accounts Program (IOLTA)
• Rules Governing all Escrow Accounts