Friday, January 25, 2008

Out Of Time, Out Of Court

An Indiana attorney was consulted by a husband who wished to have an estate plan. The attorney met with the husband, his spouse and his two children from a previous marriage. He wanted his two children to inherit everything and for the spouse's two children from a previous marriage to get zip. The lawyer proposed a trust with the husband as trustee, having power to amend or revoke the trust in his lifetime. The trust would become irrevocable on his death with his children as successor trustees directed "to maintain [the spouse] in her customary standard of living." The lawyer drafted the trust agreement and the document was executed by the husband and the spouse. The trust was later amended for the wife's protection without consulting the lawyer. After the husband died, the lawyer who drafted the trust documents represented one of the children in litigation against the spouse. The spouse sued the lawyer for malpractice.

The Indiana Court of Appeals held held that the lawsuit against the attorney was barred by the two-year statute of limitations in attorney malpractice cases. Unlike a will, a trust becomes operative at the time of execution. The trust was funded in 2001 and the suit was filed in 2005. The "continuous representation doctrine" did not toll the statute because the spouse "has not designated evidence that she subjectively intended or reasonably expected the [attorney-client] relationship to continue" after the trust documents had been signed. (Mike Frisch)

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