Texas IOLTA Compliance: Trust Account Rules & Requirements
Complete guide to Texas's IOLTA compliance requirements. Covers reconciliation rules, record retention periods, overdraft notification requirements, and how Disbo automates compliance for Texas law firms under Texas Disciplinary Rules of Professional Conduct Rule 1.14.
Reconciliation
Monthly
Record Retention
5 years
Overdraft Notice
Required
Interest Remittance
IOLTA Program
Texas IOLTA Requirements at a Glance
Key trust account rules under Texas Disciplinary Rules of Professional Conduct Rule 1.14
| Requirement | Texas Rule |
|---|---|
| Reconciliation Frequency | Monthly three-way reconciliation |
| Record Retention Period | 5 years |
| Overdraft Notification | Required — bank must notify Texas Access to Justice Foundation within 5 business days |
| Interest Remittance | To Texas Access to Justice Foundation |
| Governing Rule | Texas Disciplinary Rules of Professional Conduct Rule 1.14 |
| Client Ledger | Required — individual ledger per matter |
Source: Texas Bar Association · Texas IOLTA Program
Texas IOLTA Key Requirements
- Monthly reconciliation required
- Separate client ledger required per matter
- Texas Access to Justice Foundation must receive overdraft notification within 5 business days
- Texas Disciplinary Rule 1.14 governs IOLTA compliance (not Rule 1.15)
- 5-year retention of all trust records
Texas IOLTA Note
Texas uniquely governs trust accounting under Disciplinary Rule 1.14 rather than the standard Rule 1.15 used by most states. The Texas Access to Justice Foundation administers the IOLTA program and receives overdraft notifications. PI firms in Texas managing large case inventories face particularly complex multi-party disbursement scenarios.
Common IOLTA Violations in Texas
These are the most frequently cited IOLTA violations for Texas law firms. Each one can trigger bar discipline — and each is preventable with the right software.
- Missing individual client matter ledger
- Failure to complete monthly reconciliation records
- Disbursing settlement proceeds before clearance
- Commingling client trust and operating funds
- Late overdraft notification to Texas Access to Justice Foundation
How Disbo Keeps Your Texas Firm IOLTA Compliant
Disbo's rules engine applies Texas's specific IOLTA requirements — including Texas Disciplinary Rules of Professional Conduct Rule 1.14 — 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 Texas.
Automated Three-Way Reconciliation
Continuous reconciliation runs behind the scenes. Monthly reconciliation records are generated automatically and stored for 5 years.
One-Click Audit Package
If the Texas Bar initiates an audit, generate a complete audit package — ledgers, reconciliation reports, disbursement records — in under 60 seconds.
5 years Immutable Audit Trail
Every trust account event is timestamped, logged, and retained for 5 years — meeting Texas'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
Texas IOLTA Compliance FAQ
What rule governs IOLTA trust accounts in Texas?
Texas IOLTA trust accounts are governed by Texas Disciplinary Rules of Professional Conduct Rule 1.14. This rule sets the requirements for reconciliation frequency, record retention, client ledger maintenance, overdraft notification, and interest remittance to the Texas IOLTA program.
How often must Texas attorneys reconcile their IOLTA accounts?
Texas 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 Texas attorneys retain IOLTA records?
Texas attorneys must retain all IOLTA trust account records — including bank statements, client ledgers, reconciliation reports, and disbursement documentation — for 5 years under Texas Disciplinary Rules of Professional Conduct Rule 1.14. Disbo retains all records automatically for the required period.
What happens if a Texas IOLTA account is overdrawn?
Required — bank must notify Texas Access to Justice Foundation 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 Texas IOLTA interest go?
To Texas Access to Justice Foundation. These funds support civil legal aid programs for low-income residents throughout Texas. All IOLTA accounts must be at approved financial institutions that forward interest to the Texas IOLTA program.
See How Disbo Keeps Your Texas Firm Compliant
Stop managing Texas IOLTA compliance with spreadsheets. Disbo enforces Texas Disciplinary Rules of Professional Conduct Rule 1.14 automatically — negative balance prevention, three-way reconciliation, and audit-ready records built in from day one.
No credit card required. Setup in minutes.