IOLTA History

The Kansas Bar Foundation (Foundation) is a charitable, non-profit corporation affiliated with the Kansas Bar Association (KBA). The Foundation’s Interest on Lawyers Trust Account (IOLTA) Program was established as a funding source for law‑related charitable public service projects and was approved by the Kansas Supreme Court in April 1984. In its petition to the Supreme Court, the Foundation emphasized funding programs which improved the provision of civil legal services to Kansans, provided law‑related education, improved the administration of justice, and other programs as approved by the Court. The primary funding was envisioned as providing additional services to low-income Kansans.

The IOLTA program collects the interest from lawyers’ commingled client trust accounts which, prior to the creation of the IOLTA program, were held in non-interest‑bearing accounts. The client funds deposited in these accounts are either so small or will be held for such a short amount of time that any interest generated would be less than the expenses to set up a separate account or to separate out, keep appropriate tax records, and dispense interest to each client. However, when a number of these small or short term funds are pooled together, they can produce significant amounts of revenue for law‑related charitable public service projects. Participation in the Foundation’s IOLTA program is voluntary on the part of both Kansas lawyers and financial institutions. Historically, the Foundation has allocated approximately 80 percent or more of IOLTA funds to the provision of civil legal services to low‑income citizens.