IOLTA

Interest on Lawyers Trust Accounts

IOLTA History

IOLTA programs were first established in Australia and Canada in the late 1960s and income generated was used to provide legal services to the poor and to fund other charitable causes. In the United States, IOLTA programs operate under each state’s specific rules and regulations. State courts created the majority of IOLTA programs; state legislatures established others. In many states the charitable arm of the state bar association administers IOLTA; other states have created separate entities to operate IOLTA. IOLTA revenue has become a major source of funding for civil legal services in the United States.

Today, all 50 states, the District of Columbia, and the U.S. Virgin Islands operate IOLTA programs. Forty jurisdictions require lawyers to participate in IOLTA. Lawyers can opt out of participation in ten others, and participation is voluntary in two others.

Vermont IOLTA

The Vermont Supreme Court approved a voluntary the IOLTA program in 1984. Since 1 March 1990, Vermont lawyers and law firms have been required to hold pooled client trust funds, which are nominal or short-term funds, in a special interest-bearing IOLTA account for the benefit of the Vermont Bar Foundation.  Link to Honor Roll.

Vermont Bar Foundation

The Vermont Bar Foundation collects and invests IOLTA generated interest income, and then distributes it in fulfillment of its mission.

Article III of the Vermont Bar Foundation By-laws provides:

The objects for which the Foundation is established are:

(a) To advance the science of jurisprudence and improve the administration of justice; to seek uniformity in judicial decisions; to contribute to schools, foundations and colleges and their departments engaged in the teaching and study of law, and their law libraries and law scholarship funds; to support legal aid facilities for the indigent and legal services corporations established under the provisions of Title 11 V.S.A., Chapter 19; to expend funds to provide for the defense of persons accused of unpopular crimes, acts or beliefs who are financially unable to employ counsel or defray the cost of proper defense; to contribute to public law libraries; to contribute to public programs providing for the physical improvement of courts and other agencies engaged in the administration of justice;

(b) To receive gifts, devises and bequests of real or personal property, and to hold and manage the same under terms and conditions not inconsistent with the objects expressed herein.

To read the By-laws in full visit: VBF By-Laws (PDF)