Washington IOLTA Accounts: A Guide to RPC 1.15A and 1.15B
TL;DR: Washington IOLTA participation is mandatory. RPC 1.15A governs how lawyers handle client money, and RPC 1.15B governs the records that prove it. Trust accounts must sit at banks authorized by the Legal Foundation of Washington, only lawyers can sign on them, reconciliations run at least quarterly, and records stay on file for seven years. This guide breaks both rules into a working checklist for your firm.
Washington IOLTA compliance is mostly a records game, and the discipline data proves it. A recent Washington State Bar News review of cited ethics violations found trust account failures behind roughly one in ten of them. Most weren't theft. They were missed reconciliations, sloppy records, and money moved at the wrong time.
Your Washington IOLTA account sits under two rules, and that structure is actually good news. RPC 1.15A tells you how to handle the money. RPC 1.15B tells you exactly which records to keep. Few states spell out the recordkeeping side this clearly, which means a Washington firm can turn the rules into a literal checklist and follow it every month.
This guide does that translation. You'll get the requirements from both rules in plain language, with citations to the official sources throughout. Before the rule text, though, start with two resources that make everything concrete: an example reconciliation report and the official Washington guidance, plus our state IOLTA resource hub for other jurisdictions.
See an Example Reconciliation Report First
The Washington State Bar Association publishes detailed trust account guidance, and it's genuinely useful. What the written guides can't do is show you the finished monthly package. The reporting requirements are far easier to understand once you see an example report, so watch one before you read the rules.
Here's a short walkthrough of a complete reconciliation: example IOLTA reconciliation video.
The video walks through the bank statement with cleared items, the reconciliation detail, the check register for the month, and a client ledger report with a balance for every client. Those are the same records RPC 1.15B will require you to keep, so the example doubles as a preview of your own monthly output. Lawyers tell us the same thing over and over: they'd read the rules several times, but the picture only formed once they saw a real report. If you'd like a copy of the sample package, reach out with a law firm email address.
What Is a Washington IOLTA Account?
A Washington IOLTA account is a pooled, interest-bearing trust account for client funds that can't earn net interest for any single client. The bank sends the interest to the Legal Foundation of Washington, which grants it to civil legal aid programs statewide. Lawyers must use one for qualifying client funds.
IOLTA stands for Interest on Lawyers' Trust Accounts. The Legal Foundation of Washington has administered the program since 1984, turning pooled interest into funding for people who couldn't otherwise afford legal help.
The account holds everyday client money: unearned retainers and advance fee deposits, settlement funds awaiting disbursement, and costs advanced for filing or services. Each client's share is too small or too short-lived to earn meaningful interest alone. Pooled together, the funds generate real grant dollars while every client's principal stays fully protected and separately tracked in your ledgers.
None of the interest touches your books or your taxes. The bank calculates it and remits it straight to the Foundation under the program's terms.
The WSBA's IOLTA page covers enrollment and bank forms. If a particular client's funds are large enough to earn net interest for that client, RPC 1.15A directs those funds into a separate interest-bearing trust account for the client's benefit instead.
Two Rules, One System: RPC 1.15A and 1.15B
Washington split its trust account requirements into two rules, and the split is worth understanding because each rule answers a different question.
RPC 1.15A is the conduct rule. It covers safekeeping: what must go into trust, when money comes out, who can sign, and how disputes get handled. A few of its sharpest edges deserve attention.
Deposits go in intact. You can't split a check between trust and operating on the way in. The full amount lands in trust first, then earned portions move out properly.
No cash withdrawals. Every disbursement needs a named payee. Checks payable to "cash" are off the table entirely.
Only lawyers sign. Trust account checks and transfers require a lawyer's authorization. You can't hand the checkbook to staff, no matter how trusted.
Written notice before fee withdrawals. Before you pay yourself from trust, the client gets a written accounting of what you're taking and why.
Disputed funds stay put. If a client contests your fee or a third party claims part of the money, the disputed portion stays in trust until it's resolved. You may withdraw only what's undisputed.
RPC 1.15B is the records rule. It lists the exact books you must maintain, which we'll cover below. Read together, 1.15A describes the behavior and 1.15B describes the paper trail that proves the behavior happened.
Is IOLTA Mandatory in Washington?
Yes. Washington requires every lawyer holding qualifying client funds to use an IOLTA account at a financial institution authorized by the Legal Foundation of Washington. There's no opt-out. Funds leave the IOLTA only when they're earned, disbursed, or large enough to justify a separate account for the client's benefit.
The bank requirement has teeth. Under the Rules for Enforcement of Lawyer Conduct, authorized institutions agree to report any trust account overdraft directly to the WSBA's Office of Disciplinary Counsel. That automatic reporting is how most trust account inquiries begin, which is one more reason your reconciliations need to be current before a notice ever goes out.
The Legal Foundation of Washington maintains the list of authorized banks and handles the interest remittance side. Your role is to open the account correctly, confirm it's coded as IOLTA, and make sure the bank has the Foundation's information for interest reporting rather than your firm's.
"Qualifying funds" covers most of what a firm holds day to day. Unearned retainers qualify. So do settlement proceeds waiting for disbursement and advanced costs. The test is whether the funds could earn net interest for that specific client after bank charges. If not, IOLTA is the required home.
One practical note: the IOLTA requirement follows the funds, not the firm's size. A solo holding one retainer has the same obligations as a fifty-lawyer shop.
How Often Do You Reconcile a Washington IOLTA Account?
RPC 1.15A(h)(6) requires reconciliation as often as bank statements are generated, and at least quarterly. For a Washington IOLTA account with monthly statements, that means monthly reconciliation. Each cycle includes two comparisons: check register to bank statement, and check register to the combined total of all client ledgers.
That two-comparison structure is Washington's version of a three-way reconciliation, the standard test where the bank balance, your register, and your client ledger total all agree. The rule names the comparisons explicitly, which removes any doubt about what "reconciled" means here.
In practice, treat the statement date as a deadline. Reconcile within days of the statement arriving, save the report with the statement behind it, and have someone who didn't prepare it take a second look. The WSBA's Managing Client Trust Accounts booklet even includes a monthly reconciliation and review form built for this routine.
When a number doesn't tie, the cause is usually mundane: an uncleared check, a card processing fee, a deposit logged to the wrong client. Our three-way reconciliation guide walks through the hunt step by step, and our law firm bookkeeping team runs this exact cycle for firms every month.
What Records Does RPC 1.15B Require?
RPC 1.15B requires a checkbook register for the account, an individual ledger for each client, copies of every bank statement and deposit record, reconciliation reports, and copies of client billings and accountings. Washington lawyers must keep these records for at least seven years after the events they record.
The register is the account-wide history: every deposit, every check, every transfer, in order. The client ledger is the per-client history. Each ledger shows the money in, the money out, and a running balance that should never dip below zero, because a negative ledger means another client's funds covered the gap.
You don't have to design these books from scratch. The WSBA publishes sample check register and client ledger templates alongside its trust account materials, and most legal practice management systems generate the same reports natively.
Seven years is longer than many states require, and the WSBA's document retention guidance treats trust records as a category to handle with extra care. Electronic records work fine if they're backed up and retrievable.
Keep the context documents alongside the books: retainer agreements, settlement statements, disbursement authorizations. The register shows what moved. Those documents show why. Seven years from now, the "why" is the part nobody will remember without paper.
Choosing a Bank: The Authorized List
Not every bank can hold a Washington IOLTA account. The institution must be on the Legal Foundation of Washington's authorized list, which means it has agreed to remit interest to the Foundation, follow the rate requirements, and report overdrafts to disciplinary counsel.
The account must be interest-bearing under RPC 1.15A, with the rate and remittance handled per the Foundation's agreements with each bank. That part runs on autopilot once the account is coded correctly.
Most major banks operating in Washington are already authorized, but confirm before you open the account rather than after. Ask the branch specifically for an IOLTA trust account, not a generic business account with "trust" typed on it. The coding matters for interest remittance and reporting. Bring the Foundation's enrollment paperwork to the appointment and keep a copy of everything the bank signs. That file answers setup questions for years.
While you're there, get the fee schedule in writing. Service charges and processing fees should bill to your operating account, never to client funds. A two-minute conversation at setup prevents months of small ledger shortfalls later. If your current bank isn't on the list, moving the account is a routine project: open the new account, map every client balance, transfer with documentation, and reconcile both accounts to the penny before closing the old one.
Where Washington Firms Slip
At Law Firm Velocity, the Washington firms that come to us show a consistent pattern of small breaks rather than big ones.
Disbursing against deposits that haven't cleared is the most common. RPC 1.15A(h)(7) prohibits paying out funds the bank hasn't collected yet, but a settlement check that "always clears" tempts firms into cutting client checks a day early. The one time it bounces, several client ledgers go negative at once, and now the cleanup involves other people's money.
Fee withdrawals without the written notice come next, usually from busy months rather than bad intent. Then there's drift: ledgers maintained in practice management software that nobody ties to the bank, and card fees quietly shaving client balances.
Unclaimed funds deserve a mention too. When a client can't be located, the money doesn't become firm revenue. Washington routes abandoned client funds through the state's unclaimed property process at the Department of Revenue, generally after three years of dormancy.
The pattern across all of these is the same. Nobody set out to break a rule. The firm just lacked a routine that would have caught the break in week one instead of month nine.
The fix for all of it is review. A monthly close, done by someone who isn't signing the checks, surfaces each of these while it's still small. That review layer is exactly what our fractional CFO services add on top of clean bookkeeping.
Conclusion
Washington gives you an unusually clear playbook. Three habits cover most of it. Treat RPC 1.15B as your literal records checklist: register, client ledgers, statements, reconciliations, billings. Reconcile monthly with both comparisons, even though the floor is quarterly. And never move money ahead of the rules, whether that's an uncollected deposit or a fee without written notice.
If you'd rather have a team run that playbook for you every month, that's exactly our work. We currently support more than 120 law firms. Schedule a consultation to see what a clean monthly package looks like, or read about our IOLTA trust accounting services, which cover reconciliations, client ledgers, and reports built to RPC 1.15B's list.
Resources
These are the official Washington sources for IOLTA and trust account requirements, plus the national overview. Bookmark the two rule PDFs at minimum:
• RPC 1.15A: Safeguarding Property
• RPC 1.15B: Required Trust Account Records
• WSBA: IOLTA and Client Trust Accounts
• WSBA: Managing Client Trust Accounts Booklet
• WSBA: Document Retention Guide
• Washington Department of Revenue: Unclaimed Property
• Washington State Bar News: Trust Account Compliance Failures
• American Bar Association: IOLTA Overview
Frequently Asked Questions
Who can sign on a Washington IOLTA account?
Only lawyers. RPC 1.15A(h)(9) limits trust account withdrawals and transfers to those authorized by a lawyer, and standard practice is lawyer-only signature authority on the account itself, per the rule text. Staff can prepare checks and reports, but a lawyer signs. Build that into your workflow now rather than discovering it during an inquiry.
How long must Washington lawyers keep trust account records?
At least seven years after the events they record, under RPC 1.15B. That covers the check register, client ledgers, bank statements, deposit records, reconciliation reports, and copies of client billings and accountings. Electronic storage is fine if the records stay retrievable, and seven years of organized files takes up almost no space in a document system.
What happens if a Washington trust account is overdrawn?
The bank reports it. Authorized institutions must notify the WSBA's Office of Disciplinary Counsel of trust account overdrafts under the enforcement rules, as the WSBA's trust account guidance explains. A documented bank error with a quick correction is usually survivable. Missing records and unexplained shortages are what turn an overdraft inquiry into a discipline case.
What tax ID goes on a Washington IOLTA account?
The Legal Foundation of Washington's, which is 91-1263533, per the Foundation's IOLTA rules page. Interest is reported under the Foundation's number because the interest belongs to the program, not to you or your clients. Neither you nor your clients owe tax on it.
What do you do with funds for a client you can't find?
Make reasonable efforts to locate the client and document every attempt. If the funds stay unclaimed, they go through Washington's unclaimed property process with the Department of Revenue, generally after three years of dormancy. The money never converts to firm funds, no matter how long it sits.