Understanding Compliance

Lawyers handle money that belongs to clients. Often, the amount of money that a lawyer handles for a single client is nominal and/or is held for only a short period of time. Traditionally, lawyers have placed these individual deposits together into pooled trust accounts, called general trust accounts. All general client trust accounts must be IOLTA accounts. IOLTA accounts are interest-bearing general trust accounts from which banks forward the interest, net of service charges, to the State Bar’s IOLTA program, which uses the money to fund legal-related charitable causes. 

In contrast, dedicated trust accounts — interest-bearing accounts maintained for the sole benefit of a single client or transaction — are not IOLTA accounts. Similarly, a lawyer’s or law firm’s operating accounts should not be established as IOLTA accounts.

For more information about attorney obligations for IOLTA account compliance, see FAQs for Attorneys.

All NC IOLTA accounts must have an North Carolina-licensed attorney associated with the account unless the account is established as a Settlement Agent account. An amendment to the Good Funds Settlement Act allows for nonlawyers meeting the definition of a settlement agent to open NC IOLTA accounts. For more information about Settlement Agent accounts, see the Settlement Agent FAQs.