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 current mandatory participation effectively constitutes an unconstitutional tax on clients' interest income, as the interest earned is directed to the Montana Justice Foundation instead of the clients. The bill emphasizes the need for client consent in the management of their funds, aligning with ethical principles that require lawyers to act in accordance with their clients' decisions.

Under the new provisions, lawyers will have the option to deposit client funds into either a non-interest-bearing trust account, an interest-bearing account where the interest belongs to the client, or an IOLTA account with the client's written consent. This change aims to ensure that clients have control over their funds and that the handling of interest on these accounts complies with the Montana Constitution. The bill includes a codification instruction to integrate these changes into existing law, specifically Title 37, chapter 61, part 4.