Delaware IOLTA Program

1. A lawyer holding client funds must initially and reasonably determine whether the funds should or should not be placed in an interest-bearing depository account for the benefit of the client. In making such a determination, the lawyer must consider the financial interests of the client, the costs of establishing and maintaining the account, any tax reporting procedures or requirements, the nature of the transaction involved, the likelihood of delay in the relevant proceedings, whether the funds are of a nominal amount, and whether the funds are expected to be held by the lawyer for a short period of time.

While each lawyer is required to comply with the IOLTA provisions of the Rules, members or associates of law firms may meet those requirements using law firm IOLTA accounts. You are not required to maintain an individual IOLTA account. If you are unsure whether your firm is placing all eligible funds in IOLTA participating accounts, contact your firm administrator. A Delaware attorney must be listed on a Delaware IOLTA account.

Rule 1.15 defines allowable reasonable service charges that may be netted against the interest earned on IOLTA accounts. They are “(a) per check or electronic debit charges; (b) per deposit or electronic credit charges; (c) a fee in lieu of minimum balance; (d) FDIC insurance fees or FDIC account guarantee fees; (e) a sweep fee; and (f) a reasonable IOLTA account administrative fee.” Check printing charges, wire transfer fees, bank or certified checks, cash management fees and overdraft costs, etc., are the responsibility of and may be charged to the lawyer or law firm maintaining the account. Lawyers with questions regarding applicable account fees should contact their financial institution to request a service charge disclosure. Lawyers may request the financial institution to waive fees, but, if unsuccessful, Rule 1.15 allows lawyers to maintain up to $2000 of the firm’s funds in the IOLTA account to cover the fees.

Any lawyer or law firm should direct additional questions concerning IOLTA to the Delaware Bar Foundation.  You may contact the Foundation by calling (302)658-0773, or emailing its executive director, Megan Greenberg mgreenberg@delawarebarfoudation.org.