The Kentucky IOLTA Fund
The Kentucky Interest on Lawyers’ Trust Accounts (IOLTA) Fund exists to assist or help establish legal services programs, pro bono programs, and other law-related programs for the public's benefit.
What is IOLTA? IOLTA is a unique and innovative way to increase access to justice for individuals and families living in poverty and to improve our justice system. Without taxing the public, and at no cost to lawyers or their clients, interest from lawyer trust accounts is pooled to provide civil legal aid to the poor and support improvements to the justice system.
*Click here to view Kentucky IOLTA Fund's annual fact sheet outlining the Fund's impact across the Commonwealth in 2016.
How IOLTA Works in Kentucky. The Kentucky IOLTA Fund was established in 1986 by Kentucky Supreme Court Rule 3.830, and participation in the program became mandatory for Kentucky attorneys on January 1, 2010. The program uses the advantage of pooling client trust funds to generate interest in excess of service fees and administrative costs. Attorneys in the program deposit small or short-term trust funds into interest-bearing accounts, and the interest earned on those funds is paid directly to the IOLTA Fund. Client funds remain under the control of the attorney, who continues to maintain his or her trust account, and neither the attorney nor the client is taxed on interest generated from the account. The interest is awarded annually in the form of grants.
Who Benefits from IOLTA? The Kentucky IOLTA Fund has awarded over $15 million in grants since 1988. The interest received by the IOLTA Fund is disbursed in the form of grants for legal aid to the poor, local pro bono programs, and other projects that improve the administration of justice in Kentucky. Grant recommendations are prepared by the IOLTA Board of Trustees annually and submitted to the Kentucky Supreme Court for review and approval. While the makeup of grants varies from year to year, and there is no established percentage of funds for any specific program, a significant portion of the funds has supported Kentucky's four regional civil legal aid programs. Additionally, grants have been made annually to the three Kentucky law schools for fellowships that allow law students to intern with law-related public service organizations at no cost to the organization.
Who Administers the Kentucky IOLTA Fund? Pursuant to SCR 3.830, the IOLTA Fund is administered by the Kentucky Bar Foundation, the charitable arm of Kentucky's legal community. Subject to the continuing jurisdiction of the Kentucky Supreme Court, the Kentucky IOLTA Fund is governed by an eleven-member Board of Trustees. The ten Trustees who are members of the Bar are appointed for a maximum of two successive three-year terms by the Board of Governors of the Kentucky Bar Association and approved by the Supreme Court. An additional member of the Board of Trustees participates as a representative of the Kentucky Bankers Association.
|IOLTA Board of Trustees, 2016-2017|
|David F. Latherow
|Melinda T. Sunderland
|District 1||District 2||District 3|
|Jack N. Lackey, Jr.
|Stephen D. Gray
|J. Warren Keller
|District 4||District 5||District 6|
|Melinda T. Sunderland
|Robert W. Kellerman
|John G. Wright
|District 7||Kentucky Bar Association||Kentucky Supreme Court|
||Douglas C. Ballantine
|Justice Lisabeth T. Hughes
|Kentucky Bar Foundation||Kentucky Bankers Association|
|J. David Porter
|Luther Deaton, Jr.
|Kentucky IOLTA Fund Staff|
|Guion L. Johnstone, Executive Director||Gwen Smallenburg, Program Manager|
IOLTA Nationally. There are IOLTA programs in all fifty U.S. states, the District of Columbia, and the U.S. Virgin Islands. Below is a short video about the history of IOLTA in North America, presented by the ABA Commission on IOLTA and The National Association of IOLTA Programs, with generous support from The Florida Bar Foundation, The Law Foundation of British Columbia, and The Alberta Law Foundation:
Additional Resources. For more information about the impact of IOLTA programs in Kentucky and across North America, visit:
- IOLTA.org. This website is a joint project of the National Association of IOLTA Programs and the ABA Commission on IOLTA, and it offers the public information about IOLTA and IOLTA programs.
- American Bar Association Commission on IOLTA. The American Bar Association has supported IOLTA since its inception. To support the initiation and operation of IOLTA programs around the country, the ABA created the ABA Commission on IOLTA in 1986.
- Kentucky Bar Association IOLTA Page. This web page is maintained by the KBA and contains compliance information and forms for the Kentucky IOLTA Fund.
- Client Trust Account Handbook (2d ed.). This book was continues the joint effort of the Kentucky IOLTA Fund and Lawyers Mutual Insurance Company of Kentucky to provide Kentucky lawyers with information on their fiduciary obligations when they are entrusted with property of clients, prospective clients, and third parties.
IOLTA Information and FAQs for Attorneys. Click here for answers to questions frequently asked by attorneys about the Kentucky IOLTA program.
IOLTA Information and FAQs for Banks. Click here for answers to questions frequently asked by financial institutions about the Kentucky IOLTA program.