Frequently Asked Questions for Attorneys

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 arise.

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 exist today?
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 the program?
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 form?
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 is low?
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.