Rule 1:28A-2. Attorney IOLTA Trust Accounts

(a) Attorney Participation Commencing on the date established by regulations to be adopted by the Board of Trustees pursuant to Rule 1:28A-1(d), every attorney who practices in this State shall maintain in a financial institution in New Jersey, in the attorney's own name or in the name of a partnership of attorneys, or in the name of the professional corporation or limited liability entity of which the attorney is a member, or in the name of the attorney or partnership of attorneys by whom employed, an IOLTA interest-bearing trust account or accounts for all clients' funds that are nominal in amount, are to be held for a short period of time, or otherwise are not likely to realize income for the clients in compliance with the following provisions:

(1) The IOLTA interest-bearing trust account may be established with any financial institution approved by the Supreme Court to hold attorney trust funds under R. 1:21-6(a) and insured by the Federal Deposit Insurance Corporation or an analogous federal government agency. Funds in each IOLTA interest-bearing trust account will be subject to withdrawal on request and without delay.

(2) Funds shall be deposited in an IOLTA interest-bearing trust account authorized by this Rule when either the amount of the funds or the period of time that the funds are held, if deposited in an interest-bearing account, would not earn interest in excess of the cost incurred to secure such interest, or when an attorney determines that because of particular costs in accounting, administration, or attribution of income, as may occur when multiple parties or clients pool advance payments against the costs of litigation in a single fund, a client's funds should not be deposited in an interest-bearing account because they will not realize income. No ethical impropriety will attend an attorney's depositing such funds in an IOLTA interest-bearing trust account in accordance with this Rule. The Fund will be the owner of any interest generated by the funds deposited in an IOLTA interest-bearing trust account.

(3) An attorney or law firm shall maintain one or more IOLTA interest-bearing trust accounts and shall submit to the bank or banks with which his, her, or its short term, nominal, and other non-interest bearing funds are currently deposited, or to another bank or banks that are approved depositories, a form authorizing the bank to convert any existing non-interest bearing trust accounts to IOLTA interest-bearing trust accounts or to open IOLTA interest-bearing trust accounts, on forms prescribed by the Trustees, and provide a copy of such form to the IOLTA Fund Trustees. If such a form is not filed, the signed registration statement required by Rule 1:20-1 and Rule 1:21-6 shall constitute such authorization.

(b) Deposit of Funds in IOLTA Account An attorney will exercise good-faith judgment in determining initially whether the funds of a client are of a nominal amount, are expected to be held by the attorney for a short period of time, or otherwise fall within the circumstances described in (a) above.

In exercising that judgment, the attorney will also consider such other factors as:

(1) the cost of establishing and maintaining a separate non-IOLTA, interest-bearing trust account, including service charges, bookkeeping and accounting and tax-reporting procedures;

(2) the nature of the transaction(s) involved;

(3) the likelihood of delay in the matter for which the funds are held;

(4) whether the funds received by an attorney in a fiduciary capacity from a client or beneficial owner will generate less than $150 of interest, provided that that $150 figure may be used by an attorney as a minimum threshold indicating whether monies received in a fiduciary capacity should be placed in an IOLTA trust account, but shall not preclude the use of a higher figure if the costs or circumstances warrant; and

(5) the other circumstances described in (a) above.

(c) Periodic Review of Deposits At reasonable intervals, an attorney should consider whether changed circumstances require different action respecting the deposit of client funds.

(d) Registration; Enforcement The accounts required by this Rule shall be registered annually with the IOLTA Fund in the manner prescribed by the IOLTA Fund Trustees. The Trustees shall annually report the names of all attorneys failing to comply with the provisions of this Rule to the Supreme Court for inclusion on a list of those attorneys deemed ineligible to practice law in New Jersey by Order of the Court. An attorney shall be removed from the Ineligible List without further Order of the Court on submission to the Trustees of the prescribed forms.

(e) Duties of Financial Institution The financial institution will:

(1) remit to the Fund, at least quarterly, interest or dividends, as the case may be, net of any service charges or fees, which may include reimbursement for the reasonable costs of administering the account, computed in accordance with the institution's customary pricing procedures for interest-bearing transaction accounts.

(2 ) transmit with each remittance to the Fund a statement showing the name of the attorney or law firm for whom the remittance is sent, the remittance sent for the period, and the balance on the closing date. There shall be transmitted such other information as may be agreed on between the Board of Trustees and the New Jersey Bankers Association, the New Jersey Council of Savings Institutions, and the New Jersey Savings League.