Frequently Asked Questions
The Nebraska Supreme Court adopted
the conversion of the voluntary Interest On Lawyers Trust Accounts
(IOLTA) Program to an Opt-out Program in December 1992. The Opt-out
Program became effective January 1, 1993. Under the Code of Professional
Responsibility, Disciplinary Rule 9-102, every attorney trust account
was converted to an interest-bearing account. A lawyer or law firm
wanting to opt-out must file a Notice of Declination with the Chief
Justice of the Supreme Court or his/her designee for that year.
This Q & A has been created to help answer questions that may
Q. What is the IOLTA Program?
A. The program requires all lawyers who practice in
Nebraska and hold client funds in trust accounts to place their "pooled" nominal
and/or short term non-interest bearing client trust accounts
into interest-bearing IOLTA accounts. Those lawyers or law
firms who do not "opt-out" of the program by February 15 of
each year will be automatically enrolled in the program.
Q. Does this type of IOLTA program
A. Yes. There are currently 52 IOLTA Programs in the
United States - 13 states are Opt-out Programs, 2 states are
Voluntary Programs, and 37 states have Mandatory Programs.
Q. What if I do not have a commingled
non-interest bearing client account?
A. Those lawyers who do not hold client funds in a commingled
non-interest bearing client trust account are exempt from the
provisions of this new Rule. There will be an area on the affidavit
which will allow for indicating this exemption.
Q. Can lawyers still deposit individual
client funds into accounts which pay interest that can be passed
on to the client?
A. Yes. Lawyers are expected and encouraged to continue
the customary practice of establishing separate, interest-bearing
accounts for individual clients' funds when the sum is large
enough or the duration is long enough to justify the cost of
opening, administering, and closing the account. Any interest
accrued becomes the property of the client. If clients request
their money be placed in a separate trust account, the lawyer
is ethically bound to fulfill the clients' request.
Q. How much lawyer time and money
will participating in IOLTA involve?
A. No time and no money. The mechanics of converting
to an IOLTA account are simple. Once the affidavit is completed,
no further effort is required by the lawyer.
Q. What if I wish to "opt-out" of
A. If you choose not to participate in the program,
a written Notice of Declination will needed to be filed with
the Chief Justice or his/her designee of the Supreme Court
by February 15th each year.
Q. Is there a notice of Declination
A. No. There is no designated or established form for
a lawyer to use in filing his or her Notice of Declination.
Rather, a lawyer desiring to opt-out must prepare his or her
own form of Notice of Declination and mail it in letter form
to the Chief Justice.
Q. Who pays the service charges
or fees for the IOLTA account?
A. Bank service charges are paid from the interest earned
by the IOLTA account. Under no circumstances is the account
principal changed by IOLTA involvement, nor the lawyer billed
for IOLTA produced expenses.
Q. What if my account balance
A. Lawyers need not be concerned with this issue. IOLTA
reserves the right to exempt from active IOLTA participation
those trust accounts with small balances that will cost the
IOLTA Program more in service charges than will be generated
in interest by the account. Either way, there will be no difference
in the way the lawyer operates the trust account.