Interest on Lawyers' Trust Accounts

Keep your clients' money secure while the earned interest grows funds for local charitable causes.

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Interest on Lawyers' Trust Accounts

By opening an Interest on Lawyers' Trust Account (IOLTA) with CU1, attorneys can turn their unsegregated trust accounts into a powerful tool for good. The interest generated is sent to the Alaska Bar Foundation (ABF), which then provides grants to programs offering vital civil legal services to those in need.

The Alaska IOLTA program's mission is to fund civil legal services for the economically disadvantaged. ABF utilizes the interest income from IOLTA accounts to support nonprofit legal service providers across the state.

Here's what's required to open an IOLTA:

Business license for the lawyer
EIN for the Bar Association

Features:

No minimum balance required
No monthly maintenance fee
No wire fees from CU1
Interest is sent to the Alaska Bar Association's IOLTA Committee
Access to balances online, by phone or in person

Ready to learn more?

Visit your local CU1 branch or call us at (907) 339-9485 or (800) 478-2222 to get started.

Frequently Asked Questions

: There are no tax consequences for either the lawyer or the client if IRS requirements are met. The IRS has
ruled that the IOLTA program must apply to the nominal and short-term funds of all clients of a participating lawyer.
: IOLTA has no effect on clients. The practical effect of the IOLTA program is to shift a part of the economic benefit from depository institutions to tax exempt organizations. There is no economic injury to any client. The program creates income where there was none before.
: The bank automatically sends the interest directly to the ABF. The client trust account statements remain the
same. Since ABF is the recipient of the interest, the bank uses the ABF federal ID number and sends the 1099’s to ABF.
: ABF pays all normal banks charges relating to the operation of IOLTA accounts. Client funds are never
affected.

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