Pennsylvania Code › Title 204 - JUDICIAL SYSTEM GENERAL PROVISIONS › Part V - PROFESSIONAL ETHICS AND CONDUCT › Subpart A - PROFESSIONAL RESPONSIBILITY › Chapter 81 - RULES OF PROFESSIONAL CONDUCT › Subchapter B - RULES FOR INTEREST ON LAWYERS TRUST ACCOUNTS › Section 81.101 - Definitions

Current through Register Vol. 54, No. 28, July 13, 2024
The following words and phrases when used in these
						Regulations shall have the meanings given to them in this section unless the
						context clearly indicates otherwise:
Comparability Guidance
.-Guidance
						developed and updated from time to time by the IOLTA Board which addresses how
						Eligible Institutions should determine the comparable interest or dividend rate
						to be applied to IOLTA Accounts. This guidance is made available online at
www.paiolta.org
and may also be obtained
						by writing to the IOLTA Board at P.O. Box 62445, Harrisburg, PA 17106-2445.
Eligible Institution.
-An Eligible
						Institution is a Financial Institution which has been approved as a depository
						of Trust Accounts pursuant to Pa.R.D.E. 221(h).
Fiduciary.
-A Fiduciary is a lawyer
						acting as a personal representative, guardian, conservator, receiver, trustee,
						agent under a durable power of attorney, or other similar position. A lawyer
						acting as a settlement agent, escrow agent, common law agent (other than agent
						under a durable power of attorney), or representative payee is not acting as a
						Fiduciary.
Fiduciary Funds.
-Fiduciary Funds are
						Rule 1.15 Funds which the lawyer holds
						as a Fiduciary. Fiduciary Funds may be either Qualified Funds or Nonqualified
						Funds. Funds held by a lawyer acting as a settlement agent, escrow agent,
						common law agent (other than as an agent under a durable power of attorney) or
						in a similar capacity are not Fiduciary Funds.
Financial Institution.
-A Financial
						Institution is an entity which is authorized by federal or state law and
						licensed to do business in the Commonwealth of Pennsylvania as one of the
						following: a bank, bank and trust company, trust company, credit union, savings
						bank, savings and loan association or foreign banking corporation, the deposits
						of which are insured by an agency of the federal government, or as an
						investment adviser registered under the Investment Advisers Act of 1940 or with
						the Pennsylvania Securities Commission, an investment company registered under
						the Investment Company Act of 1940, or a broker dealer registered under the
						Securities Exchange Act of 1934.
Good Faith
.-Honesty in fact in the
						conduct or transaction concerned.
Interest on Lawyers
Trust
						Account (IOLTA) Account.
-An IOLTA Account is an income-producing Trust
						Account from which funds may be withdrawn upon request as soon as permitted by
						law. Qualified Funds are to be held or deposited in an IOLTA Account.
IOLTA Board.
-The IOLTA Board is the
						Pennsylvania Interest On Lawyers Trust Account Board.
Lawyer.
-A member in good standing of
						the bar of the Supreme Court of Pennsylvania, who is not an active or senior
						member of the judiciary. The term "lawyer" also includes a partnership of
						lawyers, a professional association of lawyers, and a professional corporation
						or other organization whose members or shareholders are engaged in the practice
						of law.
Member of the Judiciary.
-An individual
						who has been admitted to the Pennsylvania Bar and who has been appointed or
						elected and is serving as a judicial official of any state or of the United
						States of America and whose position prohibits the individual from the practice
						of law within the territorial jurisdiction when the individual serves as a
						judge. This term shall not include a lawyer who is permitted to and who
						voluntarily chooses to maintain active lawyer status in Pennsylvania so long as
						the judicial position does not prevent him or her from practicing law in
						Pennsylvania.
Non-IOLTA Account.
-A Non-IOLTA Account
						is an income-producing Trust Account from which funds may be withdrawn upon
						request as soon as permitted by law in which a lawyer deposits Rule
						1.15 Funds. Only Nonqualified
						Funds are to be held or deposited in a Non-IOLTA Account. A Non-IOLTA Account
						shall be established only as:
(i) a
					 separate client Trust Account for the particular client or matter on which the
					 net income will be paid to the client or third person; or
(ii) a pooled client Trust Account with
					 sub-accounting by the Eligible Institution or by the lawyer which will provide
					 for computation of net income earned by each client's or third person's funds
					 and the payment thereof to the client or third person.
Nonqualified Funds.
-Nonqualified Funds
						are Rule 1.15 Funds, whether cash, check,
						money order or other negotiable instrument, which are not Qualified
						Funds.
Qualified Funds.
-Qualified Funds are
						Rule 1.15 Funds which are nominal in
						amount or are reasonably expected to be held for such a short period of time
						that sufficient income will not be generated to justify the expense of
						administering a segregated account or separately accounting for the income
						earned on the Rule
						1.15 Funds.
Regulations.
-These regulations adopted
						by the IOLTA Board, and approved by the Supreme Court of Pennsylvania, as they
						may be amended from time to time.
Rule
						1.15 Funds.
-Rule
						1.15 Funds are funds which the
						lawyer receives from a client or third person in connection with a
						client-lawyer relationship, or as an escrow agent, settlement agent or
						representative payee, or as a Fiduciary, or receives as an agent, having been
						designated as such by a client or having been so selected as a result of a
						client-lawyer relationship or the lawyer's status as such.
Third Party Owner.
-The client or third
						person whose funds are in the custody of a lawyer.
Trust Account.
-A Trust Account is an
						account in an Eligible Institution in which a lawyer holds Rule
						1.15 Funds. A Trust Account must
						be maintained either as an IOLTA Account or as a Non-IOLTA Account.