New Hampshire IOLTA Accounts: The Complete Guide for NH Attorneys

TL;DR: New Hampshire attorneys who hold client funds must maintain an IOLTA trust account under Rule 1.15 of the NH Rules of Professional Conduct. This guide covers who needs one, how to set it up, what records you're required to keep, and how to run a proper three-way reconciliation each month. If your trust accounting feels messy or unclear, this is the place to start.

If you're a New Hampshire attorney, your IOLTA account isn't just a banking formality. It's a core ethical obligation. Get it wrong and you're looking at bar discipline, client harm, and a serious hit to your reputation.

The good news: once you understand the rules, New Hampshire IOLTA compliance is completely manageable. This guide breaks down everything you need to know about NH trust accounts, from opening the account to running your monthly reconciliation.

We work with law firms across New Hampshire every day. Here's exactly what the rules require and what we see trip firms up most often.

What Is an IOLTA Account in New Hampshire?

An IOLTA account (Interest on Lawyers' Trust Accounts) is a pooled, interest-bearing checking account where New Hampshire attorneys deposit client funds that are either too small or held for too short a time to earn meaningful interest for the individual client. The interest generated goes to the New Hampshire Bar Foundation, which funds civil legal aid programs across the state.

Under Rule 1.15 of the New Hampshire Rules of Professional Conduct, every NH attorney who holds client funds must place those funds in a properly designated trust account. If those funds are nominal in amount or held short-term, the account must be an IOLTA account at an approved financial institution.

The New Hampshire Bar Foundation administers the IOLTA program and maintains a list of approved financial institutions eligible to hold these accounts. Your bank must be on that list.

Who Is Required to Have an NH IOLTA Account?

Any New Hampshire-licensed attorney who receives funds belonging to a client or a third party must have a trust account. This includes:

• Retainers and advance fee deposits that haven't been earned yet
• Settlement proceeds held before disbursement
• Escrow funds in real estate transactions
• Any other money received on behalf of a client

If the funds are large enough or held long enough to generate meaningful net interest for the client, they must go into a separate, individual interest-bearing trust account (a non-IOLTA account). The judgment call is yours, but document your reasoning.

If you never hold client funds at all, you may not need an IOLTA account. But that situation is rare. Most attorneys in litigation, real estate, family law, and estate planning hold client funds regularly.

How Do You Open an NH IOLTA Account?

Opening an IOLTA account in New Hampshire is straightforward. Here's what you need to do:

First, choose an approved financial institution. The NH Bar Foundation keeps a current list of banks and credit unions that have agreed to meet IOLTA remittance and reporting requirements. Use only institutions on that list.

Second, set up the account with the correct title. The account name must identify it as a trust account. A format like "[Law Firm Name] IOLTA Trust Account" or "[Attorney Name], Attorney Trust Account" works. The title must make it clear the funds belong to clients, not the firm.

Third, notify the NH Bar Foundation. Once the account is open, you'll need to notify the Bar Foundation with your account details. The Foundation uses this information to coordinate interest remittance with the bank directly, so you don't need to do anything with the interest yourself.

Your bank handles the interest calculation and sends it to the Foundation. You keep the clients' principal safe.

What Records Are NH Attorneys Required to Keep?

Under Rule 1.15 of the NH Rules of Professional Conduct, you're required to maintain complete and accurate records for every client trust account. These records must be kept for five years after the end of each representation.

Here's what you need to maintain:

A trust account journal. This is a running record of every deposit and withdrawal from the trust account, listed chronologically. Every single transaction goes in here.

Individual client ledgers. You need a separate ledger for each client or matter that shows every deposit and disbursement related to that client's funds. The ledger balance must always reflect exactly how much of the trust account belongs to that client.

Bank statements and canceled checks. Keep every bank statement. Keep copies of canceled checks or check images. These are your proof that transactions happened.

A monthly reconciliation report. You must document that you've reconciled your records every single month. The reconciliation must be in writing.

If you're using practice management software like Clio or a dedicated trust accounting tool, make sure it generates all of these records in a format you can print and store. Software is helpful, but the obligation to maintain accurate records is yours.

What Is a Three-Way Reconciliation (and Why Does It Matter)?

A three-way reconciliation is the monthly process of comparing three separate records against each other: your trust account journal, your individual client ledgers, and your bank statement. All three must agree. If they don't, there's an error somewhere that needs to be found and corrected before you move forward.

This is the single most important compliance task in trust accounting. It catches mistakes before they turn into disciplinary problems.

Here's how the process works:

Step 1: Reconcile your checkbook (trust journal) to the bank statement.Start with your bank statement balance. Add any deposits you made that haven't cleared yet. Subtract any outstanding checks. The result is your adjusted bank balance. That number should match the ending balance in your trust account journal.

Step 2: Reconcile your client ledgers to the trust journal.Add up the ending balances of every individual client ledger. That total must match your trust account journal balance.

Step 3: Confirm all three agree.Your adjusted bank balance, your trust journal balance, and the total of all client ledger balances must all be the same number. If all three match, you're done. If they don't, you have an error to find.

Once those three numbers agree, your reconciliation is complete. Document it in writing, sign it, and keep it on file.

To see a real example of what a completed IOLTA reconciliation report looks like, we strongly encourage you to watch this walkthrough of an IOLTA reconciliation report on YouTube. Seeing the actual numbers in a real report makes the process much easier to understand than reading about it. Bookmark it and return to it each month until the process feels natural.

Common NH IOLTA Mistakes That Lead to Bar Complaints

Most trust accounting violations aren't intentional. They're the result of bad habits, disorganized records, or a misunderstanding of the rules. Here are the mistakes we see most often in New Hampshire firms:

Commingling. This means mixing firm funds with client funds in the same account. The only firm money that should ever be in your IOLTA account is a small amount to cover bank fees, if your bank charges them. Everything else that belongs to the firm should be in your operating account.

Using client funds before they're earned. If a client pays you a retainer that goes into trust, you cannot touch those funds until you've earned the fee and transferred it to your operating account. Withdrawing fees early is a serious violation.

Skipping monthly reconciliation. Some attorneys reconcile quarterly or "when they have time." That's not compliant. NH rules require monthly reconciliation, and skipping months makes errors much harder to find and correct.

Poor client ledger maintenance. Each client needs their own ledger. If you're lumping multiple clients together or not tracking individual balances, you can't know at any given moment how much of the trust account belongs to each client. That's a compliance problem waiting to happen.

Our team works with NH firms to build clean trust accounting systems from the ground up. If your current process has any of these gaps, it's worth a conversation. Explore our IOLTA trust accounting support services to see how we can help.

How NH IOLTA Interest Gets Distributed

One question we get often: where does the interest go, and do I have to do anything with it?

In New Hampshire, the interest earned on IOLTA accounts goes directly to the New Hampshire Bar Foundation. The bank remits interest to the Foundation on your behalf. You don't write a check. You don't track the interest. You don't report it on your taxes (IOLTA interest isn't treated as income to the attorney).

The Foundation uses those funds to support legal aid organizations across the state, helping low-income New Hampshire residents access civil legal services. According to the NH Bar Foundation, IOLTA funds support organizations that serve thousands of clients each year who couldn't otherwise afford legal representation.

This is why choosing an approved financial institution matters. Banks on the approved list have agreed to pay competitive rates on IOLTA accounts and to remit interest properly to the Foundation. A bank that isn't on the list won't do this correctly.

Should You Handle NH Trust Accounting In-House or Outsource It?

This is a real question for most small and mid-size New Hampshire firms. Here's how to think through it.

If you have a dedicated bookkeeper who understands IOLTA trust accounting requirements, a robust practice management system, and a partner who reviews the monthly reconciliation, in-house can work. The key is that someone with real accounting competence owns the process.

But if your bookkeeper is a generalist who also handles payroll, billing, and office admin, trust accounting often gets shortchanged. Generalist bookkeepers don't always know what a three-way reconciliation is, let alone how to catch an error in the client ledgers.

We've seen this play out at firms that had no idea their trust accounts were out of balance until a client asked a question that exposed the problem. By then, the fix is far harder than it needed to be.

Outsourcing trust accounting to a firm that specializes in legal accounting means someone who knows Rule 1.15 is running your reconciliation every month, not someone who learned it on the job. That's a meaningful difference. See how our NH trust accounting services work to understand what full-service support looks like for your firm.

Conclusion

New Hampshire's IOLTA rules aren't complicated once you understand them. You need the right bank, the right account setup, complete records, and a clean three-way reconciliation every month. That's the entire framework.

The firms that get into trouble aren't the ones who don't know the rules. They're the ones who let the bookkeeping slip because no one owns it. Every month without a proper reconciliation is a month where an error could be growing.

If you're not confident your NH trust accounting is fully compliant, don't wait for a bar complaint to find out. Book a consultation with our team today, or request an example IOLTA reconciliation report to see exactly what clean trust accounting looks like for a New Hampshire firm. We'll show you where your process stands and what it takes to get it right.

Resources

• NH Rules of Professional Conduct, Rule 1.15 — The governing rule for all NH attorney trust accounts
• NH Bar Foundation IOLTA Program — Approved institutions, remittance info, and program overview
• IOLTA Reconciliation Walkthrough (YouTube) — A real example of what a completed reconciliation report looks like
• Clio: Trust Accounting for Law Firms — Practice management and trust accounting software commonly used by NH attorneys
• LeanLaw: Law Firm Trust Accounting Guide — Additional context on trust accounting best practices for small and mid-size firms
• FDIC: Trust Account Deposit Insurance — FDIC coverage rules for fiduciary and IOLTA accounts
• ABA: Model Rules on Client Trust Accounts — The national framework that NH Rule 1.15 is modeled on
• NH Bar Association Ethics Opinions — Guidance from the Bar on specific trust accounting questions
• Law Firm Velocity: IOLTA Resource Hub — State-by-state IOLTA guides and reconciliation resources
• Law Firm Velocity: Illinois IOLTA Guide — See how trust accounting rules compare across states

Frequently Asked Questions

Do New Hampshire attorneys have to have an IOLTA account?

Yes, if you hold client funds that are nominal in amount or will be held for a short time, New Hampshire's Rule 1.15 requires you to deposit those funds in an IOLTA account at an approved financial institution. Attorneys who never hold client funds may not need one, but that's the exception, not the rule.

How often does an NH attorney need to reconcile their IOLTA account?

New Hampshire attorneys are required to reconcile their trust accounts every month. The reconciliation must be a three-way reconciliation that compares the trust account journal, all individual client ledgers, and the bank statement. The result must be documented in writing and retained for at least five years.

What happens if an NH attorney fails to reconcile their IOLTA account?

Failure to maintain and reconcile a trust account is an ethical violation under Rule 1.15 of the NH Rules of Professional Conduct. Depending on the severity and whether client funds were actually harmed, sanctions can range from a private reprimand to suspension or disbarment. The New Hampshire Supreme Court handles attorney discipline matters.

Can a New Hampshire attorney use any bank for their IOLTA account?

No. New Hampshire attorneys must use a financial institution approved by the NH Bar Foundation to participate in the IOLTA program. Approved institutions have agreed to pay competitive interest rates and remit interest directly to the Foundation. Using a non-approved bank means the interest isn't handled correctly, which creates a compliance problem.

What's the difference between an IOLTA account and a regular trust account in New Hampshire?

An IOLTA account is a pooled trust account where the interest goes to the NH Bar Foundation. It's used for client funds that are too small or held too briefly to earn meaningful interest for an individual client. A non-IOLTA trust account is a separate, individual interest-bearing account set up for a specific client when their funds are large enough or held long enough to earn net interest that benefits that client directly. Most attorneys use IOLTA accounts for the vast majority of client funds they hold.