Jurisdiction Reference
Texas IOLTA
Program: Texas Access to Justice Foundation IOLTA Program
Current Texas guidance on IOLTA eligibility, annual compliance, approved financial institutions, account setup, trust-account operations, recordkeeping, disbursement, and account closure under the Texas Disciplinary Rules and Texas Access to Justice Foundation program.
General information, not legal advice — always confirm against the official Texas sources below.
Ask about Texas's IOLTA rules
Deposits, reconciliation, reporting, recordkeeping — answered from Texas's official sources. Not legal advice.
Quick reference
Plain-language summaries of common Texas trust-accounting requirements. Use these to orient yourself, then verify the exact rule text through the official sources.
| Topic | Summary | Category |
|---|---|---|
| Separate and designate client funds | Hold client and third-person funds connected with a representation separately from the lawyer's own property in an account designated as a trust or escrow account. Other entrusted property must be identified and appropriately safeguarded. | Texas Disciplinary Rule of Professional Conduct 1.15(a) |
| Use IOLTA for nominal or short-term funds | Deposit client or third-person funds that are nominal in amount or expected to be held for a short period in a pooled IOLTA account. Funds capable of earning net income for their owner belong in an appropriate separate interest-bearing arrangement instead. | Texas Disciplinary Rule 1.15; TAJF IOLTA Compliance |
| Use an eligible financial institution | Maintain a Texas IOLTA account only at a financial institution approved as eligible by the Texas Access to Justice Foundation. Eligibility includes the program's interest-rate comparability and remittance requirements. | TAJF Eligible Financial Institutions and Rules Governing the Texas IOLTA Program |
| Title the account correctly | Open the IOLTA account in the name of the lawyer or law firm, identify it as a trust or escrow account, and designate the Texas Access to Justice Foundation as the interest beneficiary using the program's tax-identification instructions. | TAJF Open and Manage IOLTA Accounts |
| Complete annual IOLTA compliance | Every licensed Texas lawyer must complete the annual IOLTA compliance process, including lawyers who do not practice privately or do not handle client funds and therefore report that no Texas IOLTA account is required. | TAJF IOLTA Compliance; State Bar Rules Article XI |
| Report account-status changes within 30 days | Notify TAJF within 30 days after opening or closing a Texas IOLTA account or when the lawyer's firm association or other reported IOLTA account status changes. | TAJF IOLTA Compliance |
| Place advance fees and expenses in trust | Deposit advance fees and expense payments belonging to the client into trust and transfer them to the operating account only as fees are earned or expenses are incurred. A label such as nonrefundable does not override the duties governing funds that remain client property. | Texas Disciplinary Rule 1.15; State Bar of Texas Client Trust Account Guide |
| Limit lawyer funds in the trust account | Do not commingle firm money with entrusted funds. The lawyer may keep only the limited amount of personal or firm funds reasonably necessary to cover bank charges or maintain a required minimum balance. | Texas Disciplinary Rule 1.15; State Bar of Texas Client Trust Account Guide |
| Notify, deliver, and account promptly | Promptly notify a client or third person when receiving property in which that person has an interest, promptly deliver funds or property the person is entitled to receive, and provide a full accounting on request. | Texas Disciplinary Rule 1.15(b) |
| Protect genuinely disputed funds | When the lawyer and another person claim interests in the same funds, keep the disputed portion separate until the dispute is resolved and promptly distribute every portion that is not in dispute. | Texas Disciplinary Rule 1.15(c) |
| Disburse only collected funds | Do not issue a trust-account payment against an uncollected deposit unless the lawyer has a documented basis permitted by the governing rules and banking facts. A lawyer remains responsible for protecting every other client's balance from chargebacks or reversals. | State Bar of Texas Client Trust Account Guide |
| Maintain client-level accounting records | Keep a check register or equivalent, deposit and disbursement records, bank statements, and a separate ledger for each client or matter so the ownership and running balance of every dollar can be identified. | Texas Disciplinary Rule 1.15(a); State Bar of Texas Client Trust Account Guide |
| Reconcile the trust account monthly | Compare the bank statement, trust-account register, and total of all client ledger balances each month. Investigate and correct differences promptly without using one client's funds to cover another client's shortage. | State Bar of Texas Trust Accounts guidance |
| Retain trust records for five years | Preserve complete records of entrusted funds and other client property for five years after the representation ends, even if the account itself is later closed. | Texas Disciplinary Rule 1.15(a) |
Official sources
The authoritative material for this jurisdiction. Confirm every requirement here before acting on it.
Texas Disciplinary Rules of Professional Conduct
Current Supreme Court of Texas rules, including Rule 1.15 on safekeeping property.
OpenTexas Courts Rules and Standards
Official index identifying the current version and effective date of the Texas disciplinary rules.
OpenTAJF IOLTA Compliance
Annual certification, no-account reporting, and 30-day account-status change requirements.
OpenTAJF Open and Manage IOLTA Accounts
Official account-opening, titling, beneficiary, notice-form, and closure instructions.
OpenTAJF Eligible Financial Institutions
Eligibility, rate-comparability, and participating-institution information.
OpenState Bar of Texas Client Trust Account Guide
Detailed official practice guide covering account selection, operation, records, disbursement, and disputes.
OpenNotes
- The Texas Disciplinary Rules were reorganized effective March 7, 2025: safekeeping property is now Rule 1.15. Older official resources that cite former Rule 1.14 remain useful operational guidance but should be read with the current rule.
- TAJF administers Texas IOLTA eligibility and compliance. Its instructions supplement the professional-conduct rule with annual certification, account-opening, beneficiary, eligible-institution, and 30-day status-change procedures.
- The lawyer—not the bank or bookkeeping software—remains responsible for client-level records, collected-funds decisions, prompt delivery, dispute handling, and reconciliation.
Texas — Frequently asked
Common questions for Texas trust accounts. General information only — verify against the official sources above.
Who must maintain a Texas IOLTA account?
A Texas lawyer or law firm that receives client or third-person funds that are nominal in amount or expected to be held only briefly generally needs a Texas IOLTA account. A lawyer who never handles such funds may report that no account is required but must still complete annual compliance.
What changed from former Texas Rule 1.14?
The current Texas Disciplinary Rules effective March 7, 2025 place safekeeping duties in Rule 1.15. Older State Bar and program materials may still refer to former Rule 1.14, so lawyers should use the current rule text when checking an obligation.
Which client funds belong in IOLTA?
Use IOLTA for pooled client or third-person funds that are nominal or will be held so briefly that they cannot earn net income for the owner after banking and administrative costs.
When should funds use a separate interest-bearing account?
If a client's funds are large enough or will be held long enough to produce net income for that client after costs, the lawyer should use an appropriate separate interest-bearing account or investment for that owner's benefit rather than IOLTA.
How does a lawyer choose between IOLTA and a client account?
Consider the amount, expected holding period, available interest rate, account costs, and administrative expense. Reevaluate the decision if circumstances materially change.
Where may a Texas trust account be maintained?
The governing safekeeping rule generally calls for the account to be maintained in the state where the lawyer's office is situated unless the client or third person consents to another location. A Texas IOLTA account must also use a TAJF-eligible institution.
What makes a bank eligible for Texas IOLTA?
The institution must participate in the TAJF program, satisfy interest-rate comparability and reporting requirements, and appear on the eligible-institution list before the lawyer relies on it for an IOLTA account.
How should the IOLTA account be titled?
Use the lawyer's or law firm's name and clearly identify the account as a trust, escrow, or IOLTA account. The bank should use TAJF's beneficiary and tax-identification instructions so interest is reported to and paid to the Foundation, not to the client or lawyer.
Does every Texas lawyer file an annual IOLTA report?
Yes. The annual compliance process covers lawyers with IOLTA accounts and lawyers reporting that they do not handle client funds or otherwise do not need a Texas IOLTA account.
When must an account opening or closing be reported?
TAJF instructs lawyers to report opening, closing, and other IOLTA status changes within 30 days. Firms should also keep lawyer-association and account information current.
May an advance fee go directly to the operating account?
Only if the fee is the lawyer's property under the governing fee agreement and law. Ordinary advance fees and expense deposits remain client property until earned or incurred and therefore belong in trust.
May the lawyer keep firm money in IOLTA to prevent fees?
Only a small amount reasonably necessary for bank charges or a required minimum balance should be present. Keeping a cushion, payroll money, or general operating funds in trust is improper commingling.
Can an IOLTA account use electronic transfers?
Electronic transfers can be used if the lawyer preserves the same authorization, payee, client-matter, and audit-trail information required for checks and prevents unauthorized access. The client ledger and register must be updated contemporaneously.
When may deposited funds be disbursed?
Disburse only when the deposit is actually collected and the recipient is entitled to payment. A bank's provisional availability does not necessarily eliminate chargeback risk.
What happens when ownership of funds is disputed?
Keep the genuinely disputed amount in trust until the dispute is resolved, promptly distribute undisputed amounts, and maintain records showing why the balance remains held.
What records should each client ledger contain?
Record every receipt, disbursement, transfer, date, payor or payee, purpose, and running client balance. The sum of all client ledgers should equal the reconciled trust-account balance.
How often should the trust account be reconciled?
The State Bar's trust-account guidance recommends reconciliation every month, comparing the bank balance, adjusted register balance, and total client-ledger balance.
How long must Texas trust-account records be kept?
Current Rule 1.15 requires complete records to be preserved for five years after the representation ends. Other laws or the nature of the matter may justify longer retention.
What should a lawyer do after an overdraft or shortage?
Stop affected disbursements, determine which client balances are involved, notify the bank, preserve records, correct the bookkeeping cause, and obtain ethics or legal guidance about any reporting or client-notification duties. Never conceal the shortage with another client's funds.
How is a Texas IOLTA account closed correctly?
Complete outstanding reconciliations, resolve all client balances and checks, return or transfer funds to the proper owners, obtain a final statement, notify TAJF within 30 days, keep the records for the retention period, and ensure the bank reports the account as closed.