Supreme Court Rules Table of Contents
(1)
Interest-Bearing Pooled Trust Accounts. In addition to any individual
client trust accounts, a member of the New Hampshire Bar who is not exempt from
this requirement pursuant to Rule 50(1)(F) shall create or maintain a pooled,
interest-bearing trust account known as "Interest on Lawyers Trust Accounts
program" or "IOLTA" account for clients' funds which are nominal
in amount or to be held for a short period of time and must comply with the
following provisions:
A. An
interest-bearing trust account shall be established with any bank or savings and
loan association authorized by federal or State law to do business in New
Hampshire and insured by the Federal Deposit Insurance Corporation or the
Federal Savings and Loan Insurance Corporation or other financial institution
with adequate federal insurance covering client funds ("financial
institution"). Funds in each interest-bearing trust account shall be
subject to withdrawal upon demand.
B. The rate of interest payable on
any interest-bearing trust account shall be the same rate of interest paid by
the depository institution for all other holders of similar accounts. Interest
rates higher than those offered by the institution on regular checking or
savings accounts may be obtained by a lawyer or law firm on some or all
deposited funds so long as there is no impairment of the right to withdraw or
transfer principal immediately.
C. Lawyers, law firms or others
acting on their behalf when depositing clients' funds in a pooled,
interest-bearing account shall direct the depository institution:
(i) to remit
interest or dividends, as the case may be, at least quarterly, to the New
Hampshire Bar Foundation; and
(ii) to
transmit with each remittance to the Foundation a statement showing the name of
the lawyer or law firm for whom the remittance is sent, the account number(s),
and rate of interest applied for the reporting period; and
(iii) to
transmit to the depositing lawyer or law firm at the same time a report showing
the accounts number(s), rate of interest applied for the reporting period, and
amount paid to the Foundation.
D. The interest or dividends received
by the Foundation shall be used solely by the Foundation for the following
purposes:
(i) for the
support of civil legal services to the disadvantaged;
(ii) for
public education relating to the courts and legal matters;
(iii) for
such other programs as may be approved by the supreme court.
Such income shall be applied only to activities permitted to
be conducted by organizations exempt from taxation under section 501(c)(3) of
the Internal Revenue Code of 1954, as from time to time amended.
E. Attorneys, either
individually or through their firm organizations, shall complete an annual Trust
Accounting Compliance Certificate by August 1 of each year which includes a
listing of all interest-bearing trust account(s) for clients' funds under
paragraph (1). Any pooled non-interest bearing client trust account(s)
must be converted to interest-bearing trust account(s) under provisions of Rule
50(1).
F. A lawyer is exempt from the
requirement that he or she create or maintainan a pooled, interest-bearing trust
account known as “Interest on Lawyers Trust Accounts program” or “IOLTA”
account if:
(i) the lawyer is
not engaged in the private practice of law;
(ii) the
lawyer is a judge, attorney general, public defender, U.S. attorney, district
attorney, on duty with the armed services or employed by a local, state or
federal government, and is not otherwise engaged in the private practice of law;
(iii) the
lawyer is a corporate counsel or teacher of law and is not otherwise engaged in
the private practice of law;
(iv) the
nature of the lawyer’s practice is such that the lawyer does not hold IOLTA-eligible
funds of any client or third person; or
(v) the
lawyer does not have an office within the State of New Hampshire, does not have
a trust account in a financial institution within the State of New Hampshire,
and any trust accounts the lawyer has in a foreign jurisdiction are maintained
in compliance with the rules and regulations of that jurisdiction.
G. This rule may be subsequently
amended to effectuate its purposes or to comply with any amendments to the
Internal Revenue Code.
(2)
Attorney's Financial Records:
A. Every attorney shall maintain
records of the handling, maintenance and disposition of all funds or securities
of a client at any time in the attorney's possession from the time of receipt to
the time of final distribution and shall preserve such records for a period of
six (6) years after final distribution of such funds or securities or any
portion thereof. Specifically, every attorney or the firm organization shall
maintain a trust accounting system that shall include at the minimum, (1) a
ledger or system showing all receipts and disbursements from the trust account
or accounts with appropriate entries identifying the source of the receipts and
the nature of the disbursement, and (2) a separate accounting page or columns
for each client for whom property is held, which shall show all receipts and
disbursements and carry a running account balance. Any other system that
preserves the above-mentioned features and sufficiently accounts for trust funds
may also be used. In addition there shall be maintained an index, or equivalent
single source for identification of all trust accounts, including pooled
interest-bearing trust accounts, probate accounts, custodial accounts and client
agency accounts.
B. All cash property of
clients received by attorneys shall be deposited in one or more clearly
designated trust accounts (separate from the attorney's own funds) in financial
institutions. Any attorney depositing client funds into an out-of-state
financial institution shall file a written authorization with the Clerk of the
Supreme Court authorizing the Court or its agents to examine and copy such
out-of-state account records. Under no circumstances may any attorney use
out-of-state banks other than those located in Maine, Vermont,
Massachusetts, or the state in which the attorney's office is situated, without
obtaining prior written approval from the Supreme Court.
C. Only those retainer fees, that are
refundable if not earned, and as to which the attorney has so informed the
client, shall be deposited in the trust account(s) described above. These shall
not be withdrawn from the account of the attorney or firm organization until
earned. All other retainer fees may be deposited in the attorney's general
operating account.
D. All funds received as proceeds of
collections or awards on behalf of a client shall be deposited in gross in the
trust account(s) required above, and shall not be charged with a fee until
distribution.
E. The practice of
law in the form of a partnership or a professional association shall not relieve
an attorney from the obligation of compliance with this Supreme Court Rule.
F. Each financial institution account
required by Rule 50, except those accounts excluded by Rule 50-A(3), shall be
reconciled by the lawyer or law firm on a monthly basis. Such reconciliation
shall disclose (a) the balance of the account according to the financial
institution's records; (b) the balance of the account according to the lawyer or
law firm's records; (c) a detailed listing of all differences between items (a)
and (b); (d) a listing of all clients' funds in the accounts as of the
reconciliation date; and (e) a detailed listing of all differences between items
(b) and (d).