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#2237842 - 06/10/20 06:27 PM Dormant IOLTA -
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
We have an IOLTA account that is now dormant due to death of related client. We have been remitting the interest up until this point and want to know if the account should continue to have interest remitted until the account is escheated to state? Or can we move this to a non-interest bearing account?

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#2237844 - 06/10/20 06:32 PM Re: Dormant IOLTA - Chocaholic
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,365
Illinois
This is governed by the Lawyers Trust Fund rules of your state which you agreed to when enrolling as an eligible institution. Perform an internet search on "Lawyers Trust Fund of [Your State]" and you'll find their website with contact information for you to submit your question.
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#2237845 - 06/10/20 06:33 PM Re: Dormant IOLTA - Chocaholic
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
State law issue, but I doubt that you are allowed to cease interest on an IOLTA account. I might contact the BAR association and see if they can assist you as that money belongs to a client of the deceased attorney.
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#2237862 - 06/10/20 07:32 PM Re: Dormant IOLTA - rlcarey
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Thank you, its the client that is deceased.

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#2237866 - 06/10/20 07:38 PM Re: Dormant IOLTA - Chocaholic
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,365
Illinois
That confuses me a little. Was this the law firm's only client? Why wouldn't the activity from the law firm's other clients keep the account active? Regardless it would be the law firm's responsibility to escheat the funds in that instance since an IOLTA account holds funds for many clients. How would the bank know which funds belong to which of the law firm's clients?
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#2237867 - 06/10/20 07:38 PM Re: Dormant IOLTA - Chocaholic
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,931
Galveston, TX
If the attorney's client is deceased then the attorney needs to turn the money over their client's estate.

Must not be much of an attorney - I am at a loss for words.
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