IOLTA Basic Information

The South Carolina Supreme Court created the Interest on Lawyer Trust Accounts or “IOLTA” program to provide funds for law-related public service projects and programs designed to improve the administration of justice. Rule 412, SCACR, governs the IOLTA program.

Following the United States Supreme Court’s holding in Brown v. Legal Foundation of Washington, the Foundation asked the Court to amend Rule 412 of the South Carolina Appellate Court Rules to convert the current opt-out IOLTA program to a comprehensive program which provides for universal attorney participation. On January 6, 2005, the SC Supreme Court ruled that participation in the SC IOLTA program become mandatory. The effective date for the Rule amendments was March 1, 2005. With this conversion, South Carolina became the 30th state to adopt a mandatory program for attorneys.

Before the creation of IOLTA, nominal or short-term client funds held in escrow or trust were customarily pooled and deposited into non-interest bearing checking accounts. Such funds should be deposited in special interest-bearing IOLTA checking accounts at participating financial institutions. The interest generated on IOLTA accounts, less reasonable service charges, is automatically forwarded by financial institutions to the South Carolina Bar Foundation. The Foundation uses these funds to provide grants for charitable and educational law related public service projects and programs to improve the administration of justice in South Carolina.

For more information about the Commission on National Association of IOLTA Programs, please click here. Or, you may visit IOLTA.org.