My IOLTA account is charged a bank wire fee each time funds come in, and I forward the interest to the RI Bar Foundation. May I deduct the wire fees before sending the interest?

Plain-English summary

The inquiring attorney maintained an interest-bearing trust account used for real estate disbursements, with the interest earned forwarded to the Rhode Island Bar Foundation. The bank charged the account a fee each time funds were wired in. The attorney wanted to keep the account but avoid the wire transfer fee, and asked whether the account could be retained under the attorney's own employee identification number and, after deducting the wire transfer charges, the interest sent to the Foundation.

The Panel applied Rule 1.15(d), which required that lawyers direct the depository institution to remit interest or dividends on such deposits, net of any service or fees, at least quarterly to the Foundation, and to transmit statements to the Foundation and the depositor with each remittance.

Reading the rule, the Panel observed that the interest remitted to the Foundation is the amount net of any service or fees. It concluded that the attorney's law firm should explain the mechanics of the rule to the bank so that the total amount of fees is deducted from the interest, with the remaining interest forwarded to the Foundation.

Currency note

This opinion was issued in 1993 (Opinion 93-93, issued December 8, 1993), after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rule 1.15 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process, and the IOLTA provisions of Rule 1.15 have been amended over time. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.

Common questions

Q: Does IOLTA interest go to the Bar Foundation gross or net of bank fees?

A: Net. The Panel read Rule 1.15(d) to require remittance of interest to the Rhode Island Bar Foundation net of any service or fees.

Q: How should the fees be handled mechanically?

A: The Panel said the firm should explain the rule's mechanics to the bank so the total fees are deducted from the interest and the remaining interest is forwarded to the Foundation.

Background and rules framework

The opinion interprets Rhode Island Rule of Professional Conduct 1.15(d) (safekeeping property; IOLTA), the state's counterpart to Model Rule 1.15. The rule directed lawyers to have the depository institution remit interest on interest-bearing trust accounts, net of any service or fees, at least quarterly to the Rhode Island Bar Foundation, and to transmit accompanying statements identifying the depositor, the amount remitted, and the rate of interest.

Citations and references

Rules of Professional Conduct:

• MR 1.15 / RI RPC 1.15(d) (safekeeping property; IOLTA interest remitted net of fees to the RI Bar Foundation)

See also

• RI EAP Opinion 88-02: annual election notice for an interest-bearing trust account
• RI EAP Opinion 2025-09: obligations for disputed settlement funds held in IOLTA

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2093-93.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

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FINAL

ETHICS ADVISORY PANEL
OPINION #93-93 REQUEST #437
Issued December 8, 1993

The inquiring attorney maintains an interest bearing trust account that is used for real estate disbursements. The interest earned is forwarded to the Rhode Island Bar Foundation ("the Foundation"). However, the inquiring attorney's account is charged a fee by the bank each time funds are wired into the account. The inquiring attorney wishes to maintain the account, but would like to avoid the wire transfer fee. The inquiring attorney asks whether he/she may retain the account under his/her employee identification number and, after deducting the wire transfer charges, send the interest to the Foundation.

Rule 1.15(d) provides as follows:

(5) The rate of interest payable on any interest bearing trust account shall not be less than the rate paid by the depository institution on similar deposits. Lawyers or law firms making such deposits shall direct the depository institution:

(i) To remit interest or dividends on such deposits, net of any service or fees, at least quarterly, to the Rhode Island Bar Foundation (the "Foundation").

(ii) To transmit to the Foundation and the depositor with each remittance statements showing the name of the depositor, the amount remitted, and the rate(s) at which the interest was computed.

Under the Rule, the amount of interest, net of any service or fees, are to be remitted to the Foundation. Thus, the Panel believes that the inquiring attorney's law firm should explain the mechanics of the Rule to the bank so that the total amount of fees are deducted from the interest with the remaining amount of interest forwarded to the Foundation.