Also known as: accounts in trust · trust account
Written by attorneys · grounded in primary & secondary sources — see below
An account established by an individual to hold the account's assets in trust for someone else. The arrangement separates the assets from the individual's personal property while designating the beneficial interest for another.
Attorney Anita Ali maintains a client trust account at a local bank. To cover monthly service charges, she deposits fifty dollars of her own money into the account. The bank applies the deposit solely to those charges and no other purpose.
Client Austin Abbott pays attorney Aaron Adams a ten-thousand-dollar retainer before litigation begins. Adams deposits the full amount into his client trust account. He withdraws portions only after completing each stage of work and incurring related expenses.
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Depositor Alan Ackerman opens a savings account titled in trust for his brother. He retains the passbook and makes no disclosure to the beneficiary during his lifetime. Upon Ackerman's death the account remains open and the funds pass to the brother under the trust designation.
Lawyer Angela Acosta deposits nominal client funds into an IOLTA account at a participating bank. The bank calculates and remits the interest earned to the state legal foundation. The principal remains available for prompt return to the clients when their matters conclude.
A lawyer may deposit personal funds only in the amount necessary to cover bank service charges on that account.
A lawyer must deposit advance fees and expenses into a client trust account and may withdraw them only as fees are earned or expenses incurred.
The act of opening a savings account in trust for a third party, while retaining the passbook and providing no notice, creates a trust that takes effect if the depositor dies before the beneficiary with the account still open.
Interest generated by client funds in IOLTA accounts is transferred to a state legal foundation to support legal services for the needy rather than paid to the clients or the lawyer.
…to avoid commingling their clients' money with their own, but it is not unethical to pool several clients' funds in a single trust account. Before 1980 client funds were typically held in non-interest-bearing federally insured checking accounts. Because federal banking regulations in effect since the Great Depression…