Trust Account Program
The OLR Trust Account Program has two primary goals: 1) to identify problems in the management of client trust accounts and other fiduciary accounts, and potentially, to prevent conversions from such accounts; and 2) to educate lawyers with respect to safeguarding funds and maintaining the required records. For further information, please see the Trust Account Program Annual Report  .
Overdraft reporting
Lawyers who are licensed in Wisconsin are required to authorize their financial institution, by written Agreement , to notify the Office of Lawyer Regulation of overdrafts on trust and fiduciary accounts from which they or a member or employee of their firm can disburse funds via check. The Agreement to Notify OLR of Overdrafts on Lawyer Trust Accounts and Fiduciary Accounts, along with guidelines on Proper Identification of IOLTA Trust Accounts and Proper Formatting of Trust Account Checks are found at the Agreement link above, and may also be obtained by contacting OLR's Trust Account Program at (608) 267-7274, Ext. 2 or toll-free at (877) 315-6941, Ext. 2.
The Wisconsin Supreme Court established trust account overdraft reporting requirements in Wisconsin, effective January 1, 1999. See, SCR 20:1.15(h) [formerly SCR 20:1.15(i) – (p)]. Pursuant to SCR 20:1.15(h)(3), whenever a check is presented against a lawyer's trust account or fiduciary account that has insufficient funds to cover that check, the financial institution must report the overdraft to OLR, regardless of whether or not the financial institution pays the check or returns it due to insufficient funds.
With respect to fiduciary accounts, the Court established limited alternatives to the overdraft reporting requirements of SCR 20:1.15(h) in SCR 20:1.15(j)(9). Those alternatives are: 1) an annual audit of the fiduciary account by an independent CPA or 2) a responsible co-signatory, such as a co-personal representative or co-trustee, for all disbursements from the fiduciary account. These alternatives do not apply to trust accounts.
In the news
Amendments to Trust Account Rule, Effective January 1, 2010
On July 1, 2009, pursuant to a petition filed by the Wisconsin Trust Account Foundation (WisTAF), the Wisconsin Supreme Court issued an order amending its trust account rule. See, SCR 20:1.15, effective January 1, 2010 .
The changes to SCR 20:1.15 relate primarily to interest requirements for IOLTA accounts, which are incorporated in a number of newly created sections, including SCR 20:1.15(a)(1m) and (7m), and SCR 20:1.15(cm). Under the new rule, an IOLTA account must be held at an "IOLTA participating institution." [SCR 20:1.15(a)(7m)]. In addition, WisTAF will be required to annually publish on its Web site a list of the financial institutions that it has confirmed to be "IOLTA participating institutions." [SCR 20:1.15(cm)(2)c.]
WisTAF Executive Director De Ette Tomlinson indicates that her office is working with financial institutions to help them bring existing IOLTA trust accounts into compliance with the new requirements by January 1, 2010. She further indicates that WisTAF anticipates that the financial institutions currently offering IOLTA accounts will continue to participate in the IOLTA program and that the accounts at those institutions will meet the new requirements with few, if any exceptions. This is based on WisTAF's discussions with the Wisconsin Bankers Association and Community Bankers of Wisconsin as well as other states' experiences following similar rule changes. For further information, please refer to WisTAF's Web site: http://wistaf.org (external link).
Current Trust Account Rule, effective through December 31, 2009
The current trust account rule, which took effect on July 1, 2007, will remain accessible on this website through December 31, 2009, along with the July 1, 2007 amendments to SCR 20:1.0 (Terminology) that relate to attorney fees.
SCR 20:1.15, Effective July 1, 2007
SCR 20:1.0 (Fee terminology)
Topics of interest to lawyers
For guidance on proper handling of trust and fiduciary accounts; recordkeeping requirements; legal fees; and procedural information regarding OLR's Trust Account Program, including overdraft investigations, please use the following links:
Practice tips
For guidance on dealing with common trust account problems that occur in certain specialized practice areas, including bankruptcy, real estate, and personal injury, please use the following links (all in Adobe PDF format):
Management of a trust account
OLR has created a Trust Account Manual that provides basic information on proper recordkeeping, including a transaction register, sample ledger pages, and guidelines on handling the monthly reconciliations.
Education
Upcoming seminars on trust account management and the trust account rules:
Contact Mary Hoeft Smith, Trust Account Program Administrator, for further information. Telephone: (877) 315-6941, option 2; e-mail: mary.hoeftsmith@wicourts.gov
Resources
Ethics opinions and published articles on trust account issues
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