Jurisdiction Reference
Illinois IOLTA
Program: Lawyers Trust Fund of Illinois IOLTA Program
Current Illinois guidance under Rules 1.15 through 1.15C on interest-bearing client trust accounts, mandatory IOLTA, eligible banks, account enrollment, annual registration, required journals and ledgers, three-way reconciliation, overdraft reporting, and closure.
General information, not legal advice — always confirm against the official Illinois sources below.
Ask about Illinois's IOLTA rules
Deposits, reconciliation, reporting, recordkeeping — answered from Illinois's official sources. Not legal advice.
Quick reference
Plain-language summaries of common Illinois trust-accounting requirements. Use these to orient yourself, then verify the exact rule text through the official sources.
| Topic | Summary | Category |
|---|---|---|
| Segregate client and third-person property | Hold property of clients or third persons connected with a representation separately from the lawyer's own property. Funds must be placed in a client trust account; tangible property must be identified and appropriately safeguarded. | Illinois Rule of Professional Conduct 1.15(a) |
| Use one of the two permitted interest-bearing account types | Illinois permits client funds to be held either in an IOLTA account with income paid to the Lawyers Trust Fund or in a separate interest-bearing client trust account with net income paid to the client. Do not use a non-interest-bearing or operating account for client funds. | Illinois Rules 1.15 and 1.15B; LTF IOLTA Basics |
| Deposit nominal or short-term funds in IOLTA | Place all nominal or short-term client and third-person funds, including advances for costs and expenses, in a pooled IOLTA account with the Lawyers Trust Fund designated as income beneficiary. | Illinois Rule 1.15B(a) |
| Use a client-benefit account when net income is possible | Place funds capable of generating net income for an individual client in a separate interest-bearing trust account for that client's benefit. Exercise reasonable judgment using amount, duration, rates, costs, and administrative expense. | Illinois Rule 1.15B(b) |
| Use an eligible financial institution | Maintain an IOLTA account only at an institution eligible under Rule 1.15B, including interest-rate comparability, electronic interest remittance, and agreement to report trust-account overdrafts to the ARDC. | Illinois Rule 1.15B; LTF Eligible Financial Institutions |
| Set up ownership, beneficiary, and tax information correctly | Identify the lawyer or law firm as account owner, identify the account as a client trust account, designate the Lawyers Trust Fund as income recipient, and use the Fund's tax-identification number—not the lawyer's—as instructed by LTF. | LTF Establishing an IOLTA Account |
| Complete the enrollment notice | Complete the lawyer portion of the Notice to Financial Institution/Notice of Enrollment, provide the bank portion to the institution, and return the LTF copy by the stated email or fax procedure. | LTF Establishing an IOLTA Account and enrollment form |
| Report trust-account information at annual registration | Provide the client trust-account information required during annual attorney registration, including whether the lawyer maintains, uses, or is exempt from maintaining covered accounts. | Illinois Supreme Court Rule 756; LTF IOLTA Resources |
| Keep receipts and disbursements journals | Prepare and maintain a receipts journal identifying each deposit and a disbursements journal identifying each payment, with dates, sources or payees, descriptions, and amounts. | Illinois Rule 1.15A(b)(1) |
| Maintain contemporaneous client ledgers | Keep a separate contemporaneous ledger for each client or third-person beneficiary showing every receipt, charge, withdrawal, disbursement, person for whom funds are held, and running balance. | Illinois Rule 1.15A(b)(2) |
| Preserve supporting account records | Retain check registers and stubs, deposit records, electronic-transfer documentation, bank statements, canceled checks or images, fee agreements, billing statements, client accountings, and other records specified by Rule 1.15A. | Illinois Rule 1.15A(b) |
| Prepare three-way reconciliations at least quarterly | Reconcile the adjusted bank balance, checkbook or register balance, receipts-minus-disbursements balance, and total client-ledger balances. Prepare a written three-way reconciliation at least quarterly; monthly reconciliation is the safer practice. | Illinois Rule 1.15A(b)(7) and (c); ARDC Client Trust Account Handbook |
| Notify, deliver, account, and protect disputes | Promptly notify interested clients or third persons when funds or property arrive, promptly deliver undisputed property, provide an accounting on request, and keep only the disputed portion separate until resolution. | Illinois Rule 1.15(d) and (e) |
| Retain records and plan for account continuity | Preserve the required trust-account and entrusted-property records for seven years after the representation ends and arrange for their maintenance when a law practice closes, dissolves, merges, or is sold. | Illinois Rules 1.15 and 1.15A; Illinois Supreme Court Rule 769 |
Official sources
The authoritative material for this jurisdiction. Confirm every requirement here before acting on it.
Illinois Supreme Court Rules 1.15–1.15C
Official current rules for safekeeping property, required records, trust accounts, overdraft notification, and definitions.
OpenLawyers Trust Fund IOLTA Resources
Official lawyer guidance on the 2023 rule structure, annual reporting, multistate accounts, ownership, beneficiary, and TIN.
OpenEstablishing an Illinois IOLTA Account
Official step-by-step eligible-institution, account setup, titling, tax, and enrollment instructions.
OpenARDC Client Trust Accounts
Official FAQs, required-record summaries, sample forms, self-audit resources, and reconciliation tools.
OpenARDC Client Trust Account Handbook
Detailed official handbook covering creation, use, journals, ledgers, reconciliations, and common trust-account risks.
OpenLTF IOLTA Forms and Reports
Official enrollment, account-closing, unidentified-funds, rate, remittance, and management forms.
OpenNotes
- Illinois reorganized its trust-account rules effective July 1, 2023. Current guidance must read Rules 1.15, 1.15A, 1.15B, and 1.15C together rather than relying on older paragraph numbers.
- Illinois requires a written three-way reconciliation at least quarterly; the ARDC handbook recommends monthly reconciliation as the more protective operating standard.
- The Lawyers Trust Fund receives IOLTA income but is not the account owner. The lawyer or firm owns the account relationship, while LTF is the income beneficiary and supplies the TIN.
Illinois — Frequently asked
Common questions for Illinois trust accounts. General information only — verify against the official sources above.
When does an Illinois lawyer need an IOLTA account?
A lawyer who handles nominal or short-term client or third-person funds connected with a representation needs an IOLTA account unless those funds properly belong in a separate interest-bearing trust account for the owner's benefit.
What changed in Illinois on July 1, 2023?
The trust-account rules were reorganized. Rule 1.15 states general safekeeping duties, Rule 1.15A specifies required records, Rule 1.15B governs trust accounts and overdraft notification, and Rule 1.15C contains definitions.
What are the only two permitted client trust-account types?
Illinois permits an IOLTA account with income remitted to the Lawyers Trust Fund or a separate interest-bearing client trust account that pays net income to the individual client. Client funds should not be held in a non-interest-bearing or operating account.
Which funds go into IOLTA?
Funds that are nominal in amount or expected to be held only briefly, including advances for costs and expenses, go into a pooled IOLTA account.
When should a separate client-benefit account be used?
Use one when the amount and expected duration can generate net income for the client after banking and administrative costs. The lawyer should exercise reasonable judgment and revisit the decision if circumstances change.
Which institutions may hold an Illinois IOLTA account?
Only institutions eligible under Rule 1.15B. They must satisfy rate-comparability and electronic-remittance requirements and agree to report covered overdrafts to the ARDC.
Whose name appears on the account?
The lawyer or law firm is the account owner and should appear on the account and checks. The Lawyers Trust Fund is the income beneficiary, not the owner.
Which taxpayer identification number is used?
Use the Lawyers Trust Fund's TIN for the IOLTA account as directed by LTF. The Fund supplies it on request and is the payee for tax-reporting purposes.
How is an Illinois IOLTA account enrolled?
Choose an eligible institution, request an interest-bearing demand deposit account identified as client trust, complete the official notice/enrollment form, give the bank its portion, and return the LTF portion.
Does Illinois require annual trust-account reporting?
Yes. Supreme Court Rule 756 requires lawyers to provide specified client trust-account information as part of annual registration.
May advance fees be deposited in the operating account?
Fees and expenses paid in advance generally remain client property until earned or incurred and belong in trust. Transfer them only when the fee is earned or the expense is incurred under the governing agreement and rules.
What records must the receipts and disbursements journals contain?
The receipts journal identifies each deposit's date, source, description, and amount. The disbursements journal identifies each payment's date, payee, purpose, and amount.
What belongs in each client ledger?
Every receipt, charge, withdrawal, transfer, disbursement, date, source or payee, purpose, person for whom the funds are held, and running balance for that client or third person.
How often is three-way reconciliation required?
A written three-way reconciliation is required at least quarterly. The ARDC handbook says monthly reconciliation is preferable and helps identify errors before they become shortages.
What balances are compared in an Illinois reconciliation?
Compare the adjusted bank-statement balance with the checkbook or register balance, receipts-minus-disbursements balance, and total of all client-ledger balances. The reconciled figures must agree.
How long are Illinois trust-account records retained?
Required records generally must be preserved for seven years after the representation ends. Practice-closing arrangements must ensure the records remain available.
What happens after an overdraft or negative balance?
An eligible institution reports the event to the ARDC. The lawyer should immediately identify the cause, stop unsafe disbursements, protect all client balances, correct records, and cooperate with any inquiry.
How are disputed funds handled?
Keep only the genuinely disputed amount in trust until entitlement is resolved and promptly distribute every undisputed portion. Maintain a clear ledger and communications record.
Can a multistate firm use one IOLTA account?
The proper account generally follows the state where the lawyer's bona fide office is situated and the governing safekeeping rule, unless the client directs otherwise. A firm with offices in multiple states may need a separate IOLTA account for each office jurisdiction.
How should an Illinois IOLTA account be closed?
Resolve all client balances and outstanding items, complete the final reconciliation, obtain the final statement, submit the LTF account-closing notice, address unidentified funds through the official process, and retain all records for the required period.