Jurisdiction Reference
New Mexico IOLTA
Program: State Bar of New Mexico IOLTA Program
New Mexico requires lawyers to segregate client and third-party property under Rule 16-115, maintain detailed trust-account records under Rule 17-204, and place all IOLTA-eligible funds in approved interest-bearing accounts under Rule 24-109. Lawyers must make and periodically revisit the net-interest determination, clearly identify accounts, use institutions approved for both trust and IOLTA functions, direct net earnings to the State Bar’s access-to-justice program, and comply with overdraft reporting, signer supervision, reconciliation, delivery, dispute, and record-retention duties.
General information, not legal advice — always confirm against the official New Mexico sources below.
Ask about New Mexico's IOLTA rules
Deposits, reconciliation, reporting, recordkeeping — answered from New Mexico's official sources. Not legal advice.
Quick reference
Plain-language summaries of common New Mexico trust-accounting requirements. Use these to orient yourself, then verify the exact rule text through the official sources.
| Topic | Summary | Category |
|---|---|---|
| Mandatory IOLTA for eligible funds | Establish and maintain one or more interest-bearing IOLTA accounts for all client or third-party funds that qualify as IOLTA-eligible under the rule. | N.M. R. 24-109 NMRA; Rule 16-115 NMRA |
| Good-faith IOLTA determination | Evaluate whether funds can earn net interest for the owner using amount, expected holding period, financial-institution costs, accounting and tax costs, and other relevant circumstances. | Rule 24-109 NMRA |
| Periodic reassessment | Review the IOLTA account at reasonable intervals and move funds when changed circumstances make a client-benefit account economically appropriate. | Rule 24-109 NMRA |
| Client-benefit interest | Place funds capable of producing a net return in a separate or pooled interest-bearing arrangement that credits the earnings to the client or third person. | Rules 16-115 and 24-109 NMRA |
| Approved financial institution | Use a depository approved by the Disciplinary Board; an IOLTA institution must also be approved by the State Bar of New Mexico under Rule 24-109. | Rule 17-204(A)(2) NMRA |
| Account identification | Clearly identify the depository account as an “Attorney Trust Account” or “IOLTA Account” and inform the institution of its trust purpose and identity. | Rule 17-204(A)(2) NMRA |
| IOLTA rate and allowable charges | Use an eligible product paying the rate required by Rule 24-109, deduct only allowable reasonable service charges, and never make IOLTA earnings available to the lawyer or firm. | Rule 24-109 NMRA |
| Interest remittance and reporting | Direct the institution to remit net IOLTA interest and required account information to the State Bar of New Mexico for access-to-justice grants. | Rule 24-109 NMRA; State Bar IOLTA program |
| Overdraft notification | Maintain the account at an institution that reports any properly payable item presented against insufficient funds to Disciplinary Counsel, whether honored or not. | Rule 17-204(A)(3) NMRA |
| Authorized signers and supervision | Ensure a New Mexico-licensed attorney is a signatory and supervise any delegated nonlawyer signature authority without surrendering responsibility for transactions. | Rule 17-204 NMRA |
| Complete records and reconciliation | Maintain current bank records, deposit and disbursement journals, individual client ledgers, supporting documents, and regular reconciliations for the required retention period. | Rules 16-115 and 17-204 NMRA |
| Delivery, disputed funds, and closure | Promptly notify, deliver, and account for funds due; keep disputed portions separate; and close only after final distribution, reconciliation, notices, and record preservation. | Rule 16-115(D)-(E) NMRA; Rule 17-204 |
Official sources
The authoritative material for this jurisdiction. Confirm every requirement here before acting on it.
New Mexico Rule 16-115 NMRA — Safekeeping Property
Current Supreme Court-approved professional-conduct rule for segregation, advance funds, delivery, accounting, disputes, and fiduciary care.
OpenNew Mexico Rule 17-204 NMRA — Trust Account Recordkeeping
Official discipline rule covering account identification, approved institutions, overdraft notice, signers, records, and reconciliations.
OpenState Bar of New Mexico — IOLTA Rules
Official program portal linking Rules 16-115, 17-204, and 24-109 NMRA in one current location.
OpenState Bar of New Mexico — IOLTA Information and Forms
Official enrollment materials, financial-institution forms, and the Disciplinary Board trust-account manual.
OpenNotes
- New Mexico trust-account compliance spans three rule sets: Rule 16-115 governs safekeeping, Rule 17-204 governs records and depository oversight, and Rule 24-109 governs mandatory IOLTA operations.
- Use the State Bar’s current eligible-financial-institution list and enrollment form; approval for a general trust account and approval for an IOLTA account are coordinated but separately addressed in the rules.
- This page is general information, not legal advice. Confirm current NMRA text and consult the Disciplinary Board, State Bar IOLTA program, or qualified ethics counsel for fact-specific guidance.
New Mexico — Frequently asked
Common questions for New Mexico trust accounts. General information only — verify against the official sources above.
When must a New Mexico lawyer use a trust account?
When holding money or other property belonging to a client or third person in connection with representation, the lawyer must keep it separate from personal and business property and place money in a compliant trust account.
Which funds are IOLTA-eligible in New Mexico?
Funds are IOLTA-eligible when they cannot earn income for the client or third person in excess of the costs of securing, calculating, and distributing that income. Rule 24-109 makes IOLTA mandatory for those funds.
How is the net-interest decision made?
Consider the amount, expected holding period, available rates, service charges, accounting and tax-administration costs, and any other circumstance affecting whether the owner can receive a positive net return.
Must the IOLTA decision be revisited?
Yes. Rule 24-109 directs the lawyer or firm to review IOLTA holdings at reasonable intervals and take further action when changed balances, duration, rates, or costs alter the economic result.
What if funds can earn net income for the owner?
Place them in a separate interest-bearing account or a properly administered pooled account that allocates interest to the client or third person, with records supporting the allocation and charges.
Which institutions may hold a New Mexico IOLTA account?
The institution must be approved for trust accounts by the Disciplinary Board and approved for IOLTA by the State Bar under Rule 24-109. Check the State Bar’s current eligible-institution list.
How should the account be titled?
Clearly designate it as an “Attorney Trust Account” or “IOLTA Account,” identify the lawyer or firm, and tell the institution that it holds fiduciary funds subject to New Mexico reporting requirements.
Who receives New Mexico IOLTA interest?
The institution remits net interest to the State Bar of New Mexico, which administers the program and distributes funds through the access-to-justice grant process; the lawyer or firm may not receive the earnings.
How is a New Mexico IOLTA account enrolled?
Complete the current Attorney Notice of Enrollment, take it to an eligible institution, send the required copy to the State Bar after opening or conversion, and retain a copy with account records.
What happens after an overdraft or insufficient-funds item?
The approved institution reports a properly payable item presented against insufficient funds to the Office of Disciplinary Counsel whether or not it is honored. Investigate, correct, document, and respond promptly.
Who may sign on a New Mexico trust account?
A lawyer licensed in New Mexico must be a signatory. A lawyer may delegate signature authority to a nonlawyer where permitted, but remains responsible for supervision and every transaction.
Where do advance fees and costs go?
Fees and expense deposits that remain client property are held in trust until earned or incurred. Withdraw only supported amounts and promptly provide required notice, delivery, and accounting.
How are disputed funds handled?
Keep the disputed portion separate until the competing interests are resolved, promptly distribute undisputed portions, notify interested persons, and maintain a clear ledger and supporting file.
What records and reconciliations are required?
Maintain bank statements and item images, deposit records, receipts and disbursements journals, individual client ledgers, fee and transfer support, and timely three-way reconciliations for the rule’s retention period.
How should a New Mexico IOLTA account be closed?
Stop new deposits, account to each owner, resolve residual and disputed balances, let outstanding items clear, notify the bank and State Bar as required, complete a final reconciliation, and preserve records.