With the recent meltdown of financial institutions, some lawyers have been wondering whether and how client funds held in a lawyer’s IOLTA account are be covered by FDIC insurance in the event of a bank failure. In general, the rule has been that FDIC insurance covered $100,000 of any individual’s funds deposited in a single financial institution, regardless of how many accounts that $100,000 was spread over, including the portion of the individual’s funds that are in the lawyer’s trust account.
