Lawyerist Podcast Knee Deep in Escheating: Intricacies of Lawyer Trust Accounts, with Amy Woods
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Sep 25, 2025 Amy Woods, founder of IOLTA Consulting, shares her expertise on managing trust accounts effectively. She outlines the common pitfalls lawyers face with IOLTA accounts and the importance of timely setup and three-way reconciliation. Woods explains the risks of outstanding checks, defines escheatment, and clarifies how to handle unclaimed funds. She emphasizes that QuickBooks alone isn't sufficient and suggests combining it with legal case-management reports. Her insights aim to help lawyers safeguard client funds and avoid serious compliance issues.
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Trust Accounts Are A Hidden Business Risk
- Trust accounts feel like a "ticking time bomb" because lawyers avoid accounting work.
- Pushing trust accounting aside lets small mistakes snowball into major compliance problems.
Vet Your Accountant For Trust Audits
- Ask your accountant whether they've been through a trust audit and if they'll help with non-financial compliance.
- Confirm they will show up for an audit or provide required documentation when regulators request it.
Don't Ignore Outstanding Trust Checks
- Treat outstanding checks as still in trust until they clear and track them closely.
- Void and escheat uncashed checks that meet your state's abandonment timeline instead of removing them from your books.