Source of Revenue

The Foundation receives its revenue primarily from the interest on lawyers’ trust accounts. (“IOLTA”) Financial institutions must pay to the Foundation the interest on lawyers’ mixed trust accounts maintained by lawyers practising in Manitoba.

The Legal Profession Act of Manitoba requires Manitoba lawyers to maintain one or more general (sometimes called “mixed” or “pooled”) trust accounts to receive all money held in trust for clients. General trust accounts must be interest-bearing. Trust funds can include a deposit held pending the sale of a property, mortgage proceeds, estate assets held until final distribution to beneficiaries, or a retainer to be applied eventually to lawyers’ fees and disbursements.

If the amounts are very large and/or the lawyer expects that it might be considerable time before the trust moneys can be paid out, then the lawyer (on instruction from the client) may place the client’s moneys in a separate interest-bearing account, with the interest being paid to the client.

In many cases, however, it is not cost-efficient to transfer the funds into an account paying interest to the client because the administrative costs to do so would be more than the interest which would be earned on the account. In these cases, the trust funds stay in the lawyer’s general trust account, and the interest earned on that account is remitted by the financial institution directly to the Manitoba Law Foundation.

Lawyers must, according to the provisions of the Act, instruct the financial institutions where they have their general trust accounts to remit the net interest earned to the Foundation. The Foundation has developed pro forma letters of direction and remittance for lawyers and financial institutions. The letters also have the approval of the Benchers of The Law Society of Manitoba. Before the establishment of the Foundation, interest moneys were paid to the Minister of Finance and were placed in the Manitoba Government’s Consolidated Fund.

The Foundation negotiates with each financial institution directly to agree upon an interest rate arrangement for the interest paid on lawyers’ trust accounts. It looks for favourable interest rates and service charges with the banks and credit unions, taking into account the significant balances held in lawyers’ trust accounts and the value of the work done by the Foundation’s grantees to benefit the public. The revenue from IOLTA is highly variable, because it depends upon the balances in the trust accounts year to year and the interest rates at the time.

While the interest on lawyers’ trust accounts is by far the biggest proportion of the Foundation’s revenue, the Foundation also receives a small proportion of its revenue from investments, which are held in a Managed Fund with The Winnipeg Foundation.

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© Copyright 2017 The Manitoba Law Foundation. All rights reserved.
ph: (204) 947-3142
Who We Are... The Manitoba Law Foundation is a not for profit foundation which funds law and justice related programs that benefit the public in the following areas: legal education, legal research, law reform, legal aid services; and the development and maintenance of law libraries. Our revenue comes primarily from the interest on the funds held in Manitoba lawyers’ pooled trust accounts maintained in financial institutions.