It’s been one year since the amendments to requiring Massachusetts lawyers to transfer unidentified and unclaimed funds in IOLTA accounts to the IOLTA Committee went into effect. At the first anniversary, we are happy to report that the transfer process is working well! Since last September, we have processed nearly 300 affidavits transferring funds to the IOLTA Committee. Additionally, a list of over 300 owners of unclaimed funds has been posted to the Board of Bar Overseers website at .
The transferred funds received by the IOLTA Committee are used to support legal help for Massachusetts residents who cannot afford a lawyer and to improve the administration of justice in the Commonwealth. More information, detailed instructions and guides to the process, and the affidavits necessary to transfer funds are available at this webpage: https://www.maiolta.org/for-attorneys/undistributable-iolta-funds.
What do the amendments require lawyers to do?
When lawyers learn they have unclaimed or unidentified funds in their IOLTA account, they must undertake reasonable and diligent efforts to reunite the funds with their owner. Once a lawyer has made duly diligent efforts to return the funds to the owner, the lawyer may remit the funds to the IOLTA Committee at any time. Three years from the date of discovery of undistributable funds, a lawyer must remit the funds to the IOLTA Committee. In either case, the funds must be accompanied by an affidavit completed by the lawyer or the lawyer’s authorized agent under the pains and penalties of perjury.
Under , lawyers who transfer unclaimed funds to the IOLTA Committee must maintain the related client file or files for at least 10 years.
What role do financial institutions play in the new process?
Rule 1.15(h)(5) requires that financial institutions give notice to lawyers of inactive IOLTA accounts. An inactive IOLTA account is an account with no transactions other than the automatic accrual and disbursement of interest to the IOLTA Committee for at least two-and-a-half years. Lawyers should review these inactivity notices carefully and either disburse the funds and close the account if it is no longer needed or follow the financial institution’s instructions for reactivating the account.
If an inactive IOLTA account is not closed or reactivated within six months after the two-and-a-half-year notice to the lawyer, the bank or credit union will send a three-year notice to the lawyer and to the BBO. The lawyer must either disburse the funds and close the account if it is no longer needed or notify the financial institution that the account should remain open. Under Rule 1.15(h)(7), the lawyer must notify the BBO of the action taken after the three-year notice.
If the account remains inactive for more than a year after the financial institution sends the three-year notification to the lawyer and the BBO, the financial institution will remit the balance of the IOLTA account to the IOLTA Committee and close the account.
Financial institutions may start transferring funds and closing accounts as early as March 2026, so lawyers are encouraged to address any issues with their IOLTA accounts as soon as possible.
Forms for financial institutions to submit reports and for remitting funds to the IOLTA Committee following the required notices, can be found on our website here: https://www.maiolta.org/financial-institutions
Questions may be directed to the IOLTA Committee at 617-723-9093 or This email address is being protected from spambots. You need JavaScript enabled to view it..