I have heard in ethics seminars about qualified and nonqualified funds. I am not sure what they mean. Can you tell me?
Chester County lawyer Samuel C. Stretton. Courtesy photo
The question of what are qualified funds and what are not is fairly straightforward. The bottom line is that qualified funds have to be put in ones IOLTA account. Nonqualified funds cannot be put in the IOLTA account, but must be put in an interest-bearing escrow account. The definitions are found at Rule 1.15(a)(8) and (a)(9) of the Rules of Professional Conduct. Qualified funds are defined as follows, “Funds which are nominal in amount or are reasonably expected to be held for such a short period of time that sufficient income will not be generated to justify the expense of administering a segregated account.” See Rule 1.15(a)(9) of the Rules of Professional Conduct.
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