How TVFCU Supports Attorneys with Secure, Compliant IOLTA Solutions

Managing client funds isn’t just another task on your to-do list; it’s a responsibility that carries legal consequences. Mishandling trust money, even unintentionally, can lead to penalties and damage your reputation. Which is why IOLTAs exist—to ensure funds are kept separate and handled according to state bar rules. At TVFCU, we understand the pressures legal professionals face when it comes to trust accounting.

We’re proud to support our members with tools that make managing IOLTAs simple and secure. In this blog, we’ll revisit the essentials and show how our solutions can help you stay compliant.

What Is an IOLTA Account?

An IOLTA account is short for Interest on Lawyers’ Trust Account. It is a type of pooled, interest-bearing account used by attorneys to hold client or third-party funds temporarily.

These accounts are required in most states when the funds are too small or held for too short a time to justify setting up individual interest-bearing accounts. The key distinction is that the interest generated on an IOLTA doesn’t go to the law firm or the client. Instead, it goes to state-run programs that fund legal aid and access to justice initiatives.

Why IOLTA Accounts Still Matter

Even if the mechanics of trust accounting feel routine, IOLTA accounts remain a cornerstone of ethical legal practice. Here’s why:

• They protect you from claims of misappropriation or commingling.
• They protect your clients by keeping their funds separate from operating expenses.
• They serve the greater good by channeling interest to legal aid programs.

At TVFCU, we make sure your IOLTA account is compliant, reliable, and aligned with your state’s regulations whether you’re handling retainers, settlements, escrow funds, or court fees.

Avoiding Common Errors

IOLTA accounts are designed to keep client funds separate and protected, but managing them properly requires attention to detail and a clear understanding of the rules. Without the right setup and oversight, it’s easy to make errors that can lead to compliance issues.

Here are a few issues attorneys may encounter when managing an IOLTA account:

• Commingling funds: Keeping client money in the same account as business revenue — even for a day — can trigger serious disciplinary action.
• Using IOLTA as a line of credit: Borrowing against client funds, even temporarily, is never okay.
• Missing reconciliations: Infrequent or inconsistent bookkeeping can leave you vulnerable to audits or penalties.
• Passing on bank fees to clients: Most jurisdictions prohibit this — it’s on the attorney to cover any account maintenance costs.
• Not separating funds by client: A single IOLTA account must still include clear subledgers or records for every client.

At TVFCU, we help you sidestep these issues with thoughtful account setup and best-practice support tailored for law firms.

Pro Tips for Staying in Compliance

Maintaining compliance with IOLTA requirements isn’t just about avoiding penalties — it’s about building sound, trustworthy financial practices that support your firm’s long-term success. With the right systems and habits in place, managing client funds becomes more efficient and less prone to risk. Here are a few proven strategies that can help your firm stay organized, compliant, and audit-ready:

• Reconcile monthly (or more often): Regular check-ins catch errors before they become problems.
• Use legal-specific software: Platforms like Clio, CosmoLex or MyCase pair well with trust accounts.
• Train your staff: Everyone who touches client funds should understand how IOLTA rules work.
• Work with professionals: An accountant who understands trust accounting can be worth their weight in gold.

Why Attorneys Choose TVFCU for Their IOLTA Needs

We’re more than just a financial institution — we’re a partner that understands the unique needs of legal professionals. At TVFCU, we offer tailored solutions to help attorneys manage their IOLTA accounts with confidence and ease.

With TVFCU, you’ll benefit from:

• Dedicated support from professionals who know how to structure IOLTA accounts correctly.
• Streamlined setup that ensures compliance from day one.
• Easy-to-use banking tools like Your$ help streamline everyday account management.
• Competitive rates and local service that’s responsive when you need it.

Whether you’re a solo attorney or managing a multi-state practice, TVFCU makes trust accounting simple and secure so you can focus on your clients.

Ready to Get Started?

Setting up your IOLTA account with TVFCU is fast, easy, and fully compliant with state bar requirements. We’ll walk you through every step and help you avoid the headaches that can come from doing it alone.

To set up these services, give us a call at 423-488-4035 or email us at BusinessDeposit.Operations@TVFCU.com.