History of the Kansas Bar Foundation Interest on Lawyers Trust Accounts Program

The Kansas Bar Foundation is a charitable, non-profit corporation affiliated with the Kansas Bar Association. The KBF’s Interest on Lawyers Trust Account Program was established as a funding source for law-related charitable public service projects and was approved by the Kansas Supreme Court in April of 1984. In its petition to the Supreme Court, the KBF emphasized funding programs which improved the provision of civil legal services to Kansans, provided law-related education, improved the administration of justice, and other programs as approved by the Court. The primary funding was envisioned as providing additional services to low-income Kansans.

The IOLTA program collects the interest from lawyers’ commingled client trust accounts which, prior to the creation of the IOLTA program, were held in non-interest-bearing accounts. The client funds deposited in these accounts are either so small or will be held for such a short amount of time that any interest generated would be less than the expenses to set up a separate account or to separate out, keep appropriate tax records, and dispense interest to each client. However, when a number of these small or short-term funds are pooled together, they can produce significant amounts of revenue for law-related charitable public service projects. Participation in the KBF’s IOLTA program is voluntary on the part of both Kansas lawyers and financial institutions.

All grant applications are reviewed by the KBF’s IOLTA Committee, which is made up of appointees from the KBF, the KBA, the Kansas Supreme Court, the Kansas Association for Justice, the Kansas Association of Defense Counsel, the Kansas governor’s office, and the Kansas Bankers Association. The IOLTA Committee forwards its recommendations to the KBF’s Board of Trustees for final approval.

Historically, the KBF has allocated approximately 80% or more of IOLTA funds to the provision of civil legal services to low-income citizens.