New York IOLTA Compliance: Trust Account Rules & Requirements
Complete guide to New York's IOLTA compliance requirements. Covers reconciliation rules, record retention periods, overdraft notification requirements, and how Disbo automates compliance for New York law firms under NY Rules of Professional Conduct Rule 1.15; 22 NYCRR Part 1300.
Reconciliation
Monthly
Record Retention
7 years
Overdraft Notice
Required
Interest Remittance
IOLTA Program
New York IOLTA Requirements at a Glance
Key trust account rules under NY Rules of Professional Conduct Rule 1.15; 22 NYCRR Part 1300
| Requirement | New York Rule |
|---|---|
| Reconciliation Frequency | Monthly three-way reconciliation |
| Record Retention Period | 7 years |
| Overdraft Notification | Required — bank must report to Lawyers' Fund for Client Protection within 5 business days |
| Interest Remittance | To IOLTA Fund of the State of New York |
| Governing Rule | NY Rules of Professional Conduct Rule 1.15; 22 NYCRR Part 1300 |
| Client Ledger | Required — individual ledger per matter |
New York IOLTA Key Requirements
- Monthly three-way reconciliation required
- 7-year retention of all trust account records
- Specific record formats required under 22 NYCRR Part 1300
- Running balance required on all ledgers
- Lawyers' Fund for Client Protection must receive overdraft notification within 5 days
New York IOLTA Note
New York is one of the most compliance-intensive IOLTA jurisdictions. 22 NYCRR Part 1300 sets specific format requirements for records. Running balances on all ledgers and 7-year retention are strictly enforced. PI firms in New York handling large case inventories face heightened compliance complexity.
Common IOLTA Violations in New York
These are the most frequently cited IOLTA violations for New York law firms. Each one can trigger bar discipline — and each is preventable with the right software.
- Non-compliant reconciliation format under 22 NYCRR Part 1300
- Missing running balance on trust and client ledgers
- Failure to maintain 7-year records under Part 1300
- Failure to report overdrafts to Lawyers' Fund within 5 days
- Commingling client and firm funds
How Disbo Keeps Your New York Firm IOLTA Compliant
Disbo's rules engine applies New York's specific IOLTA requirements — including NY Rules of Professional Conduct Rule 1.15; 22 NYCRR Part 1300 — automatically to every trust account transaction. Stop managing compliance manually. Let Disbo enforce the rules so your team can focus on clients.
Negative Balance Prevention
Disbo blocks any disbursement that would overdraw a client's trust balance — eliminating the #1 IOLTA violation in New York.
Automated Three-Way Reconciliation
Continuous reconciliation runs behind the scenes. Monthly reconciliation records are generated automatically and stored for 7 years.
One-Click Audit Package
If the New York Bar initiates an audit, generate a complete audit package — ledgers, reconciliation reports, disbursement records — in under 60 seconds.
7 years Immutable Audit Trail
Every trust account event is timestamped, logged, and retained for 7 years — meeting New York's retention requirement automatically.
Monthly Reconciliation Status
Bank Balance
$124,500
Trust Ledger
$124,500
Client Totals
$124,500
Recent Trust Activity
Smith v. Acme
Settlement Receipt
Smith v. Acme
Attorney Fees
Smith v. Acme
Medical Lien Payment
Jones Matter
Settlement Receipt
New York IOLTA Compliance FAQ
What rule governs IOLTA trust accounts in New York?
New York IOLTA trust accounts are governed by NY Rules of Professional Conduct Rule 1.15; 22 NYCRR Part 1300. This rule sets the requirements for reconciliation frequency, record retention, client ledger maintenance, overdraft notification, and interest remittance to the New York IOLTA program.
How often must New York attorneys reconcile their IOLTA accounts?
New York attorneys must complete a three-way reconciliation of their IOLTA trust accounts monthly. Three-way reconciliation compares the bank statement balance, the trust account ledger balance, and the sum of all individual client ledger balances — all three must match.
How long must New York attorneys retain IOLTA records?
New York attorneys must retain all IOLTA trust account records — including bank statements, client ledgers, reconciliation reports, and disbursement documentation — for 7 years under NY Rules of Professional Conduct Rule 1.15; 22 NYCRR Part 1300. Disbo retains all records automatically for the required period.
What happens if a New York IOLTA account is overdrawn?
Required — bank must report to Lawyers' Fund for Client Protection within 5 business days. An overdraft notification triggers a disciplinary review process. Attorneys must ensure sufficient cleared funds are in the trust account before any disbursement. Disbo blocks transactions that would create a negative balance before they process.
Where does New York IOLTA interest go?
To IOLTA Fund of the State of New York. These funds support civil legal aid programs for low-income residents throughout New York. All IOLTA accounts must be at approved financial institutions that forward interest to the New York IOLTA program.
See How Disbo Keeps Your New York Firm Compliant
Stop managing New York IOLTA compliance with spreadsheets. Disbo enforces NY Rules of Professional Conduct Rule 1.15; 22 NYCRR Part 1300 automatically — negative balance prevention, three-way reconciliation, and audit-ready records built in from day one.
No credit card required. Setup in minutes.