How to Set Up a New IOLTA Account: A Step-by-Step Guide

Step 1: Confirm Your State's IOLTA Bank Requirements

Not every bank is eligible to hold IOLTA funds. Most states require the bank to be on an approved list maintained by the state IOLTA program. The bank must agree to remit interest to the state bar foundation rather than to the attorney. Check your state bar's website for the current list of approved financial institutions before opening an account.

Step 2: Open the Account With the Correct Title

State rules typically specify how the account must be titled. Common formats include:

• [Firm Name] Attorney Trust Account
• [Attorney Name], Attorney, IOLTA Trust Account
• [Firm Name] as Trustee, IOLTA

Using the wrong title — even a minor variation — can itself be a rule violation in some states. Confirm the required format with your state bar before opening.

Step 3: Complete the IOLTA Notification Form

Most states require you to notify the state bar when you open a new IOLTA account. This typically involves submitting a form with the bank name, branch address, account number, and the name of the attorney responsible for the account. Some states require this within a specific number of days after opening.

Step 4: Request Overdraft Notification Agreement

In states with mandatory overdraft reporting, the bank must be signed up to notify the state bar if any trust account check is returned for insufficient funds. Most eligible IOLTA banks have this agreement in place by default — but confirm with your banker that it applies to your account.

Step 5: Set Up Your Recordkeeping System Before the First Deposit

This is the step most attorneys skip — and the one that leads to problems. Before you deposit a single dollar into your new trust account, set up your recordkeeping system. That means:

• A client ledger structure ready to receive the first matter
• A check register format for logging all deposits and disbursements
• A reconciliation template ready for the first statement close
• A file folder (physical or digital) designated for trust account bank statements

IOLTATrusts lets you set up a new account and your first client matter in minutes. When your first deposit arrives, the ledger is ready to receive it.

Step 6: Order IOLTA-Compliant Checks

Your trust account checks should be ordered separately from your operating account checks. Many attorneys use a different color stock for trust checks to prevent accidental use of the wrong checkbook. Include the account title and "IOLTA" designation on the check face.

Step 7: Brief Your Staff

Anyone who handles trust account transactions — entering deposits, cutting checks, recording disbursements — needs to understand the basic rules: no commingling, every transaction gets a client matter code, no disbursement without a confirmed balance. A five-minute briefing can prevent months of recordkeeping problems.