State-Specific IOLTA Rules: What Georgia and Florida Lawyers Need to Know
April 22, 2025
Trust Account Reconciliations: Ensuring Accuracy and Compliance for Indiana and California Attorneys
April 29, 2025
Building a System for Trust Account Compliance
Managing client funds is a fundamental responsibility for attorneys, and establishing a streamlined trust account compliance system is essential to uphold ethical standards and avoid potential pitfalls. This guide provides actionable steps, tools, and templates tailored to the specific requirements of the Massachusetts and Michigan Bar IOLTA Rules.
What is IOLTA?
Interest on Lawyers’ Trust Accounts (IOLTA) programs require attorneys to hold client funds that are nominal in amount or expected to be held for a short period in special interest-bearing accounts. The interest generated supports legal aid and access to justice initiatives.
Massachusetts IOLTA Rules: What You Need to Know
Regulated by: Massachusetts Rule of Professional Conduct 1.15
Massachusetts requires attorneys to properly handle client funds by depositing them into an IOLTA account when appropriate. Here’s what you need to comply with:
Mandatory IOLTA Participation
- Who Must Participate? Attorneys who hold nominal or short-term client funds must deposit them into an IOLTA account.
- Why? Since these funds don’t generate significant interest for the client, Massachusetts directs the earned interest to fund legal aid programs.
Approved Financial Institutions
- Where Can You Open an IOLTA Account? Only at banks that are certified by the Massachusetts IOLTA Committee.
- Why Does This Matter? These institutions agree to the state’s reporting and overdraft requirements, ensuring transparency.
- How to Find an Approved Institution? The Massachusetts IOLTA Committee maintains an updated list of approved financial institutions. (Check the list here)
Record-Keeping & Compliance
To comply with Rule 1.15 of the Massachusetts Rules of Professional Conduct, attorneys must:
Keep detailed records of all deposits, withdrawals, and balances for each client’s trust funds. Maintain accurate ledgers for every client, tracking their funds separately. Perform regular reconciliations to ensure the trust account matches records. Follow overdraft reporting requirements—banks must notify the Board of Bar Overseers of any overdraft.
Full Massachusetts IOLTA Guidelines: Massachusetts IOLTA CommitteeMichigan IOLTA Rules: What You Need to Know
Regulated by: Michigan Rules of Professional Conduct 1.15
Like Massachusetts, Michigan requires attorneys to properly handle client trust funds by following strict IOLTA rules.
Mandatory IOLTA Participation
- Who Must Participate? Attorneys who hold nominal or short-term client funds must deposit them into an IOLTA account.
- Why? The interest from these accounts is used to fund access to justice programs through the Michigan State Bar Foundation.
Approved Financial Institutions
- Where Can You Open an IOLTA Account? Attorneys must use a financial institution that is approved by the Michigan State Bar Foundation.
- Why Does This Matter? These banks agree to Michigan’s IOLTA reporting rules, including automatic overdraft notifications to the Attorney Grievance Commission.
- How to Find an Approved Institution? Michigan attorneys can find a list of eligible banks on the State Bar Foundation website. (Check the list here)
Record-Keeping & Compliance
Michigan attorneys must follow Rule 1.15 of the Michigan Rules of Professional Conduct, which requires:
Detailed tracking of client funds to ensure no commingling with law firm funds. Maintaining accurate records of all IOLTA transactions for at least five years. Conducting monthly three-way reconciliations to verify bank statements, client ledgers, and trust account records match. Overdraft reporting compliance—banks must report any insufficient funds in a trust account to the Attorney Grievance Commission. Full Michigan IOLTA Guidelines: Michigan State Bar FoundationSteps to Create a Streamlined Trust Account Compliance System 
- Educate Your Team:
- Training: Ensure that all staff members handling client funds are well-versed in IOLTA requirements and trust account management.
- Resources: Utilize available materials such as the Massachusetts IOLTA Committee’s guidelines and the Michigan State Bar Foundation’s attorney brochures. (https://www.msbf.org/wp-content/uploads/2023/01/IOLTA-Attorney-Brochure.pdf)
- Establish Clear Procedures:
- Deposit Protocols: Define which funds should be placed in IOLTA accounts versus non-IOLTA trust accounts. (https://www.michbar.org/file/pmrc/articles/0000145.pdf)
- Disbursement Procedures: Set clear guidelines for when and how funds can be disbursed, ensuring compliance with state rules.
- Implement Robust Record-Keeping:
- Individual Client Ledgers: Maintain detailed records for each client, documenting all transactions.
- Regular Reconciliations: Perform monthly reconciliations of trust accounts to promptly identify and address discrepancies.
- Utilize Technology:
- Accounting Software: Adopt legal-specific accounting software that offers trust accounting features to automate and streamline processes.
- Templates: Use standardized templates for deposit slips, disbursement forms, and reconciliation reports to maintain consistency.
- Conduct Regular Audits:
- Internal Reviews: Schedule periodic internal audits to ensure ongoing compliance.
- External Audits: Consider engaging external professionals for unbiased assessments of your trust account practices.
Tools and Templates for Compliance 
- Massachusetts Resources:
- IOLTA Guidelines: Comprehensive information on Massachusetts IOLTA requirements. maiolta.org
- Record-Keeping Checklists: Tools to ensure adherence to Rule 1.15’s record-keeping mandates. (https://massbbo.my.site.com/s/iolta-resources)
- Michigan Resources:
- Attorney Guidelines Brochure: Detailed guidance on IOLTA compliance under Michigan Rules of Professional Conduct 1.15. (https://www.msbf.org/wp-content/uploads/2023/01/IOLTA-Attorney-Brochure.pdf)
- IOLTA Handbook: A comprehensive manual for financial institutions and attorneys on managing IOLTA accounts.
Take Control of Your Trust Account Compliance Today
Managing trust accounts doesn’t have to be overwhelming—but without the right system in place, one small mistake can turn into a major problem. Whether you’re practicing in Massachusetts or Michigan, the key to staying compliant is having a structured, foolproof system that keeps you organized, audit-ready, and stress-free.
Need help setting up a trust account compliance system that works? At Prestige Accounting & Consulting, we specialize in helping law firms create streamlined, compliant, and efficient trust account management processes—so you can focus on practicing law, not stressing over audits.
Schedule a consultation with Prestige Accounting & Consulting now and get peace of mind knowing your trust accounts are in expert hands! 
