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Requirement for Trust Account in Iowa

The jurisdiction of the work governs whether the funds arise from practice in Iowa. E.g., if the matter you are handling would be litigated in a forum in Iowa, the matter arises from Iowa practice and any client funds received would need to be placed in an Iowa trust account.

The practice of depositing funds received from clients for matters arising from practice in Iowa in a trust account located outside Iowa violates Iowa Court Rule 45.1, which provides in pertinent part:

Funds a lawyer receives from clients or third persons for matters arising out of the practice of law in Iowa shall be deposited in one or more identifiable interest-bearing trust accounts located in Iowa.

No exception or accommodation is included in the rule for attorneys who already maintain a trust account in another jurisdiction. The requirement of physical location of the account in Iowa helps ensure that interest payable under the Interest on Lawyer Trust Account (IOLTA) program will be properly paid to the Iowa Lawyer Trust Account Commission. In addition, physical placement of such accounts in Iowa ensures that the depository institution will be subject to the jurisdiction of Iowa courts and amenable to Iowa process and the audit processes of the Client Security Commission.

If you actually have not received any client funds for matters arising from the practice of law in Iowa, there is no need at this time to establish a trust account in Iowa. However, a trust account in Iowa must be established and used at the time you do receive client funds for matters arising from the practice of law in Iowa. Our trust account auditors do periodically perform audits to ensure compliance with this rule.

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