Professional Services Accounting ARTICLE -
New Client Funds and IOLTA Rules
Target Audience: Law Firm Professionals, Lawyers, MA Supreme Court Rulings, New Client Funds Interest
In September 2003, the Massachusetts Supreme Court issued revisions to Rule 1.15, Safeguarding Property, specifically relating to Client Fund Accounts (including IOLTA Accounts).
- Among the monies which must be treated as client funds are:
- All advances for fees and most retainers received from clients, until they are actually earned by the lawyer;
- Funds which belong in part to the client and in part to the lawyer;
- Funds of the client that are being held for disbursement at a later time;
- Personal injury awards including PIP funds, alimony payments, real estate conveyancing monies and litigation settlements.
The revisions to Rule 1.15 were effective July 1, 2004.
Significant changes to the rules included requiring that bank accounts are reconciled at least every 60 days, and the requirement to maintain a separate ledger of Bank Charges. Modifications have been made to the detailed Operational and Accounting Requirements.
Please contact us if you require further information about the Client Funds and IOLTA rules, or click here to review the Feeley & Driscoll's Law Firm Services Group and Professional Services Group of Fleet Boston Financial presentation entitled "Client Trust Accounting Controls a review the new Massachusetts requirements for managing clients’ funds – effective 1/1/04."
Find out how our expertise in professional services accounting can add value to your business. Email us or call us at 1 (888) 875-9770.
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