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Apply for an Exemption

In limited circumstances, an attorney may be exempt from maintaining an IOLTA Account.

An exemption is not automatic. One must be requested by the attorney and granted by the IOLTA Board.

Exemption categories:

Low balance
If the average daily balance of your current IOLTA account as measured over twelve months is less than $5,000, you may request an exemption.

Bank service charges routinely exceed the income
If the bank service charges assessed on your current IOLTA account routinely exceed the interest earned, you may request an exemption.

Extreme Impracticality
See 204 Pa. Code 81.109(d)(iii).

Other compelling and necessitous reasons
See 204 Pa. Code 81.109(d)(iv).

To Request an Exemption

Send a written request to the IOLTA Board’s executive director at paiolta@pacourts.us.

Identify the exemption category for which you are applying and explain why you qualify.

For a low balance exemption or excessive service charges exemption, you must include the bank statements for your current IOLTA account for the last twelve months.

Exclusions

If you do not receive Rule 1.15 Funds in your practice of law in Pennsylvania, you are automatically excluded from the requirement to maintain a Pennsylvania IOLTA Account. Examples include full time employment in a corporate capacity, by local, state or federal government, as a law clerk, professor, or as a member of the judiciary.

If An Exemption is Granted

All other duties and responsibilities outlined in Pa.R.P.C. 1.15 apply to the account even if the attorney has been granted an exemption from maintaining it as an IOLTA account.

All Qualified Funds handled by the attorney must be deposited in a non-interest bearing trust account that is set up properly by the bank to comply with its responsibilities related to dishonored payment reports.

Nonqualified Funds must be deposited in a non-IOLTA, interest-bearing trust account to the benefit of the client.

Exemptions are valid for three years. If the reason for the exemption still exists at the end of three years, the attorney must reapply for another three-year exemption six months prior to the expiration.

If the circumstances that formed the basis for the exemption change within the three year period, the lawyer must notify the IOLTA Board and comply with the requirement to deposit Qualified Funds in an IOLTA account.