Senate Bill No. [insert bill number] proposes to amend the handling of interest on attorney trust accounts in Montana by making participation in the Interest on Lawyer Trust Account (IOLTA) program voluntary rather than mandatory. The bill asserts that the Montana Supreme Court's previous mandate for lawyers to deposit client funds into IOLTA accounts, where the interest is directed to the Montana Justice Foundation, constitutes an unconstitutional tax and appropriation of client funds. The bill emphasizes the need for client consent in managing their funds and aims to align the IOLTA program with constitutional provisions regarding legislative power over taxation and appropriations.

Under the new provisions, lawyers will have the option to deposit client funds into either a non-interest-bearing trust account, an interest-bearing trust account where the interest belongs to the client, or an IOLTA account with the client's written consent. This change is intended to ensure that clients have control over their funds and that any interest earned is either returned to them or directed to the Montana Justice Foundation only with their approval. The bill includes a codification instruction to integrate these changes into existing law.