Fiduciary Conflicts

North Dakota has amended its Rule 1.8 (prohibited transactions) to add a provision governing lawyers who act as a fiduciary of an estate, trust or conservatorship . The pertinent addition reads as follows:

(l) Neither a lawyer serving as a fiduciary of an estate, trust, or conservatorship nor the lawyer's firm may serve as legal counsel for the fiduciary. This paragraph does not apply to matters in which the decedent, trustor, beneficiary, or protected person is a spouse, child, grandchild, parent, grandparent, or sibling of the lawyer.

The new provision has the following explanatory comment:

[22] Paragraph (l) addresses situations in which a lawyer may be asked to serve as both a fiduciary for an estate, trust, or conservatorship and as legal counsel for the requesting party. Situations in which a lawyer serves in both capacities represent a conflict of interest and present, whether by design or default, opportunities for overreaching, misappropriation, or other exploitation of the dual capacity relationship. The relationship of trust and confidence between lawyer and client and with respect to the lawyer as fiduciary generally requires that a lawyer not serve in both capacities. The prohibition in paragraph (l) would not apply to those situations in which there is a familial relationship between the lawyer and the decedent, trustor, beneficiary, or protected person.

The full amended rule is linked here. (Mike Frisch)