Can we wire clients escrow money directly to client and other payees from the iolta account? NY based client.

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In PA, we wire real estate proceeds from the IOLTA to the mortgagor all the time. I don't know why it would be any different for wiring money to a client. PA regulations do not forbid ACH or wire transfers.

Obviously, it is vital that you KNOW that the account to which you are sending money is the correct account, but, beyond that, I don't see a problem.

Here's what I found on the New York IOLA FAQ web page: "May I withdraw funds from my IOLA account via a wire transfer? What about other electronic transfers? An ATM card?

IOLA accounts are subject to Rule 1.15 of the Rules of Professional Conduct, which requires that:

“All special account withdrawals shall be made only to a named payee and not to cash. Such withdrawals shall be made by check or, with the prior written approval of the party entitled to the proceeds, by bank transfer.” 22 NYCRR Part 1200, Rule 1.15 (e).

Courts have found that checks payable to “cash” and ATM withdrawals are prohibited from IOLA accounts. See, e.g., Matter of Butler, 285 A.D.2d 344 (2d Dep’t 2001)."

I would argue that ACH and write transfers are included -- essentially, they are electric checks (and more sector than paper checks).

However, I do not practice in NY, and this part does not contribute legal advice. 😁

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Thank you. This was helpful.

I’m in CA. We just started doing that because it was causing an issue on our books, transferring the money to operating account first.

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