Trust Account Certification
The Idaho Rules of Professional Conduct require each active, out of state active and house counsel member of the Idaho State Bar to certify annually under penalty of perjury that he or she maintains a separate client trust account in the state of Idaho for client funds or that he or she handles no client funds because of the nature of his or her practice.
In addition to certifying the existence of such an account, attorneys are required to (1) identify the account number, account name and the name and address of the financial institution where it is maintained, and (2) authorize their financial institution to notify the Idaho State Bar of any overdraft or instrument presented against insufficient funds.
The Interest on Lawyers Trust Accounts (IOLTA) program allows attorneys to invest small or short-term deposits so that these otherwise idle funds may be pooled to generate interest money channeled to the Idaho Law Foundation, Inc. for use in law-related public interest programs.
Frequently Asked Questions
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Who must have a trust account?
All active, out of state active and house counsel members of the Idaho State Bar must submit a trust account certificate with each annual licensing. However, if an attorney does not handle Idaho client trust funds, the attorney does not have to have an Idaho trust account. The certificate provides a place to check to indicate that the attorney understands the trust account requirements, but does not handle Idaho client trust funds so does not have an Idaho trust account.
Which accounts must be reported?
All Idaho client trust accounts used by the attorney during the last twelve months must be reported to the Idaho State Bar. If an attorney is licensed in other states, those states' accounts should not be included on the Idaho certificate. If the attorney works for a firm, the firm's Idaho trust accounts should be listed even if the attorney does not personally handle the funds or the attorney is not a signatory on the account. If an attorney had an account within the last twelve months that is now closed, it should be listed on the certificate with a line drawn through it or otherwise marked as account closed.
When should trust account certificates be completed?
All active and house counsel members must complete new trust account certificates with their annual licensing. Any time a new trust account is opened or account name is changed, the attorney(s) using the account should file a new certificate. If a trust account is closed without a new one being opened, it is not usually necessary to file a new certificate. A letter informing the Idaho State Bar of the account closure along with a list of the attorneys who used the account is sufficient.
What is the process for requesting a new trust account certificate?
Are there restrictions on the banks that can be used for trust accounts?
Idaho client trust accounts can only be in financial institutions that meet the following requirements:
Financial institutions physically located in Idaho; and
Financial institutions that have agreed to participate in the Interest on Lawyers Trust Accounts (IOLTA) program and to Automatic Reporting of Trust Account Overdrafts (ARTAO).
A list of Idaho State Bar Approved Financial Institutions is published annually.
Can a "pad" of money be put in the trust account?
A lawyer may deposit the lawyer's own funds in a client trust account for the sole purpose of paying bank service charges on that account, but only in an amount necessary for that purpose.
What is the process for opening a new trust account?
- Request a new trust account certificate by using the Trust Account Certificate Request Form or by contacting the Licensing Department at (208) 334-4500. Request a certificate for each attorney who will be using the new account.
- Choose an Idaho State Bar Approved Financial Institution.
- Take the Trust Account Certificate to the bank when opening the account. Remember, the branch where the account is opened must be in Idaho.
- Add the new account information to the certificate and, if appropriate, draw a line through any former, closed accounts.
- Leave a copy of the certificate with the bank if requested, but retain the original.
- Submit the original, signed certificate to the Idaho State Bar.
- If the new account is not an IOLTA account, submit a a written notice declining to participate in the IOLTA program. The notice can be a simple letter providing the account information (bank name, account name and number) and stating the account will not be part of the IOLTA program.
What is Interest on Lawyers Trust Accounts (IOLTA)?
The IOLTA program gathers the small amounts of interest earned on general client trust accounts. This interest does not belong to the attorneys or the banks and is not in sufficient amounts to allocate to individual clients. This money is pooled together and granted to organizations that meet the IOLTA grant requirements. More information on the IOLTA program.
What is Automatic Reporting of Trust Account Overdrafts (ARTAO)?
All Idaho client trust accounts are subject to automatic reporting of overdrafts. If an account is overdrafted, the bank will send notification to the Idaho State Bar along with notification to the attorney. More information on ARTAO.
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