NALA Certified Paralegal Practice Exam

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What does IOLTA stand for? What are a lawyer's obligations with respect to this?

Interest on Lawyer's Trust Accounts - Manage client funds separately
Investment of Legal Trust Assets - Invest client funds
Interest on Legal Trust Assets - Ensure legal advice is provided
Income of Legal Transitional Accounts - Transition funds

The correct answer is: Interest on Lawyer's Trust Accounts - Manage client funds separately

IOLTA stands for Interest on Lawyer's Trust Accounts. It is an ethical obligation for lawyers to manage client funds separately using an IOLTA account. This ensures that client funds are secure and not co-mingled with the lawyer's personal or business funds. Options B, C, and D are incorrect as they either do not accurately describe the meaning of IOLTA or the obligations of a lawyer in relation to it. Option B implies that lawyers can invest client funds, which is often prohibited, and options C and D do not mention managing client funds separately, which is a key aspect of IOLTA.