Re: I.O.L.T.A. Acounts

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When I worked at Chase our attorney trust account did not have
a fee you had one primary account to transfer fund into from
the sub accounts that held the clients funds.

On 7/12/06, rrr wrote:
> On 7/05/06, W. B. Straight, Esq. wrote:
>> Is it morally permissible, according the tenets of the
>> Christian Religion--say the Roman Catholic Faith--for an
>> attorney to put his client's money held in trust by him in
>> an interest-bearing trust account and authorize the bank to
>> pay the interest earned off of his client's money to a
>> third party, such as a bar foundation?
>>
>> WBS, Esq.
>
> You're not required to.
>
> If you feel that strongly about it you can set up separate
> bank trust accounts for each and every new client who comes
> in. Then then individual client account gets the interest.
>
> However, does it make sense? The typical Bank charges $5+ a
> month for a Trust Account. Whats your typical deposit size
> and how long does it typically sit in your trust account?
>
> Assume a $2500 deposit in a 1&37; Savings Account. That
makes $2
> in interest the first month, -$5 in Bank Fees, for a net -$3
> by the end of the month. How much do expect to still have
in
> the Trust Account at the end of the month? $1000? So we do
> it again, for $0.83 of interest the second, -$5 in Bank
Fees,
> for a net -$4.17. And so on and so forth.
>
> Do you see the problem?
>
> Therefore it doesn't make sense to create separate accounts
> unless you expect to have a very large retainer $7500
> minimum, that sits untouched for a significant period. In
the
> real world, where does that happen?
>
> The phantom interest collect by IOLTA that everyone seems so
> worried about would have been sucked up by Bank Fees but for
> the expedient of the State Bar IOLTA accounts.