MBE Rules · Professional Responsibility
Client Trust Account — IOLTA
Cal. Rules of Prof. Conduct 1.15
The rule
Client funds must be deposited in a designated trust account separate from the lawyer's own funds. Commingling personal funds is prohibited; funds must be promptly disbursed upon completion of the purpose for which held. Complete records must be maintained for five years.
In plain English
Client funds must be kept in a separate trust account, known as an IOLTA account, to ensure they are not mixed with the lawyer's personal funds. Lawyers must promptly distribute these funds once the purpose for which they were held is completed, and they are required to keep accurate records for five years.
Worked example
A lawyer receives a $10,000 retainer from a client and deposits it into their personal checking account instead of a designated trust account. After completing the work, the lawyer takes $8,000 for fees but fails to maintain proper records. The lawyer is found to have violated professional responsibility rules due to commingling funds and inadequate record-keeping.
Memory hook
Keep client money separate—trust accounts are a must!
The trap
Exams often include scenarios where a lawyer inadvertently mixes personal and client funds, testing your understanding of commingling rules.
How examiners test it
Questions typically present fact patterns involving client funds, requiring candidates to identify violations related to trust account management and record-keeping.
Drill this rule until it can't fail you.
Vrenberg generates unlimited questions on this exact rule, tracks your mastery of it, and brings it back until it sticks.