Free Resource · Trust Compliance
The IOLTA Self-Audit Checklist
Score yourself: 20/20 means your trust account should survive an audit. Anything unchecked is a finding waiting to happen — and every one of them is fixable before it becomes a problem.
Self-Audit — 20 Points
☐Account setup. The trust account is a properly designated IOLTA at an approved institution, titled correctly, and separate from all operating funds.
☐Account setup. No earned fees, firm funds (beyond a minimal bank-fee cushion where permitted), or personal funds sit in the trust account.
☐Ledgers. A separate ledger exists for every client and matter with funds in trust — no 'miscellaneous' or pooled entries.
☐Ledgers. Each ledger shows every deposit, disbursement, payee, date, and running balance.
☐Ledgers. No individual client ledger has ever gone negative, even for a day.
☐Reconciliation. A three-way reconciliation (bank statement, book balance, sum of client ledgers) is performed monthly.
☐Reconciliation. The three balances match to the penny, and reconciliation reports are saved with the preparer's name and date.
☐Reconciliation. All outstanding checks and deposits in transit are identified and aged; stale items are investigated.
☐Disbursements. No disbursements are made against deposits that have not cleared.
☐Disbursements. Settlement disbursement statements are prepared for every settlement and signed by the client.
☐Disbursements. Lien reductions are documented in writing and reflected in the ledger (original lien, reduction, payment).
☐Disbursements. Fee transfers to operating occur promptly after being earned and properly disbursable — and never before.
☐Controls. Two people are involved in trust disbursements (preparer and approver), or a documented review control exists for small firms.
☐Controls. Trust checks and wire authority are restricted; unused check stock is secured.
☐Controls. Bank statements are received or reviewed by someone other than the person who writes trust checks, where staffing allows.
☐Records. Trust records are retained for at least the period your state bar requires (commonly 5–7 years).
☐Records. Unclaimed or unidentifiable funds are handled per your state's escheatment/bar procedures — not left to age silently.
☐Records. 1099 and tax reporting on settlement-related payments is handled correctly each January.
☐Review. Someone who does trust accounting professionally has reviewed the account in the last 12 months.
☐Review. You could hand a bar auditor your last three months of reconciliations today, without preparation, and be comfortable.
Missed more than two? That's normal — and it's exactly the condition most firms are in when they come to us. Cleanup is quiet, confidential, and faster than you think.
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