Legal Definitions - IOLTA

IOLTA

IOLTA stands for Interest on Lawyers' Trust Accounts. It is a program that allows lawyers to hold their clients' money in a special account that earns interest. The interest earned is then used to fund legal aid programs for people who cannot afford a lawyer.

For example, if a lawyer is holding $10,000 of their client's money in an IOLTA account, the interest earned on that money might be $100. Instead of keeping that $100 for themselves, the lawyer would donate it to a legal aid program to help people who cannot afford a lawyer.

Another example is if a lawyer is holding money for a real estatetransaction in an IOLTA account. The interest earned on that money would be donated to a legal aid program, even though the money is not technically the client's.

IOLTA is a way for lawyers to use their clients' money to help people who cannot afford a lawyer. By earning interest on the money held in an IOLTA account, lawyers can donate that money to legal aid programs. This helps ensure that everyone has access to legal representation, regardless of their financial situation.