Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, March 10, 2015

Probate Court May Review Attorney's Fees


In Faulkner v. Woodruff, 2015 Fla. App. LEXIS 3185 (Fla. Dist. Ct. App. 2d Dist. Mar. 6, 2015) the court concluded that if an attorney for a personal representative of an estate charges excessive fees, the probate court has the jurisdiction to review the propriety of such fees, and the burden of proof is on the attorney to establish that such fees are reasonable.  The probate court may review attorney fees even if they are paid from nonprobate assets. 

In this case, a probate estate was opened with under $5,000 in personal property and a homestead residence.  The attorney for the executor charged $39,869 in attorney fees for work performed in the “uncontested proceeding.”  The executor of the estate filed a petition to review the attorney’s compensation as an interested person.  Although the probate court dismissed the petition, the appellate court came to a different conclusion, holding the executor has the same right to have the probate court review compensation paid to the estate’s attorney.

See Jeffrey Skatoff, Probate Court Has Jurisdiction to Review Attorney Fees, Burden of Proof on Attorney, Florida Probate Lawyers, March 8, 2015.

March 10, 2015 in Estate Administration, Estate Planning - Generally, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Thursday, March 5, 2015

Financial Planning Risks for Professional Athletes

SportsMismanagement of the multi-million dollar salaries of professional athletes is unfortunately common, and a recent example is the case initiated by San Antonio Spurs center Tim Duncan against his financial advisor. The drastically quick wealth jump seen by professional athletes can result in a lack of knowlegde of financial management and full reliance on advisors, some of which are personal contacts that lack adequate knowledge in the area. Proper investing and advice is critical for professional athletes who have relatively short earning windows.

See, Parker Beauchamp, How Professional Athletes  Can Avoid Becoming Another Statistic, Wealth Management, March 2, 2015.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

March 5, 2015 in Estate Planning - Generally, Professional Responsibility, Sports | Permalink | Comments (0) | TrackBack (0)

Trust Attorney Did Not Owe Beneficiaries Fiduciary Duty

TrustIn a recent trust case from Florida and appealed to the United States Court of Appeals for the Eleventh Circuit, life insurance trust beneficiaries brought a breach of fiduciary duty claim against the trustee's attorney.

In Bain v McIntosh, the Eleventh Circuit held that the attorney did not have a fiduciary duty to the beneficiaries, reasoning that under the Florida Evidence Code and Rules of Professional Conduct the trustee and not the beneficiaries was the attorney's client. However, the court dropped a footnote stating that the beneficiaries abandoned the argument that they were intended third-party beneficiaries by not including it in their initial brief.

See Jeffrey Skatoff, Attorney for Trust Owes No Fiduciary Duty to Beneficiaries, Clark Skatoff, March 4, 2015.

March 5, 2015 in New Cases, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 4, 2015

Executors Beware: A Cautionary Tale

Last will and testament

In a tale of caution about being an executor, the cast includes a 73-year-old homemaker named executor of a nonagenarian cousin’s will, an attorney battling brain cancer, seven distant relatives and an IRS bill for $1.2 million in penalties and interest for failure to file an estate tax return and pay taxes on time. 

In an appeal to the U.S. Court of Appeals for the Sixth Circuit, the executor is trying to recover the $1.2 million from a series of complex factual circumstances.  The question is whether her failure to file the return and pay the tax on time was due to reasonable cause or willful neglect.

The details of this story will likely make you think twice about whom you appoint as executor of your will.  While many people hire estate attorneys to do the work and appoint family or friends as executors, it is ultimately the executor who bears the responsibility to make sure everything is done on time. 

“Reliance on counsel cannot constitute reasonable cause for the late filing and payment of taxes.”  Thus, it is ever important as an executor to read your basic duties and understand all of your responsibilities. 

See Ashlea Ebeling, The Executor’s $1.2 Million Mistake, Forbes, March 4, 2015.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

March 4, 2015 in Estate Administration, Estate Planning - Generally, Estate Tax, Professional Responsibility, Wills | Permalink | Comments (0) | TrackBack (0)

Article on Trusting Trust

Deborah gordon

Deborah S. Gordon (Drexel University Thomas R. Kline School of Law) recently published an article entitled, Trusting Trust, Kansas Law Review, Vol. 63 (2015); Drexel University Thomas R. Kline School of Law Research Paper No. 2015-A-01.  Provided below is the abstract from SSRN:

What is a trustee and how should we understand her duties? The existing literature typically identifies the trustee in the role of agent, partner or contracting party. This Article re-envisions the trustee in the role of the legal system’s most trusted type of decision-maker: the common law judge. Rather than argue for a top-down recreation of the trustee’s role, this Article contends that valuable lessons can be learned by reconceptualizing how trustees, settlors, and beneficiaries view themselves and each other. Using traditional literature about great judging as a touchstone, the Article argues that those qualities essential to principled adjudication — including candor, competence, integrity, and impartiality — offer fresh insights for trust creation and administration and shed light on certain internal trust governance dilemmas. The Article’s normative claim is that analogizing trustees to judicial surrogates — arbiters, interpreters, problem-solvers, mediators, and communicators — will provide a way to build greater confidence in what might be called a trust community that originates with the settlor but is perpetuated by the trustee and beneficiaries as they function in the lived world.

March 4, 2015 in Articles, Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 3, 2015

Lawsuits Against Iowa Attorney's Estate Claim Over $9 Million

Gavel BWAs I have previously discussed, the estate of late Iowa attorney David Roth is facing multiple lawsuits from Roth's former clients. Additional claims have been brought, including a $1.89 million claim from VerJean and Eugene Walther who allege that the money from their 2012 car crash settlement is missing. The lawsuits against Roth claim over $9 million against his estate. Additional lawsuits may add to this total as those claiming to be victims of wrongdoing doing by Roth can file their cases until March 6.

See Ron Steele, Claims against Roth estate surpass $9-million-Deadline Approaches, KWWL, Feb. 25, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this case to my attention.

March 3, 2015 in Estate Administration, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 25, 2015

When a Testator's Attorney Can Be Liable to a Beneficiary


In a recent decision, the U.S. District Court for the District of Massachusetts ruled a testator’s attorney could be held liable to a prospective beneficiary for fraudulent misrepresentations. In Spinnato v. Gold-man, 2014 WL 7236343 (D. Mass. Dec. 19, 2014), applying Massachusetts law, the Court distinguished a fraudulent misrepresentation claim, where the case law is unsettled, from a negligence, negligent misrepresentation, and breach of fiduciary duty claim, where it is well-settled that a testator’s attorney cannot be held liable to prospective  beneficiaries because the testator’s attorney does not owe a duty of care to prospective  beneficiaries.

The Spinnato decision serves as a forewarning to estate  planning attorneys to “speak up now or forever hold your peace,” as waiting until after the  testator’s death to assert the testator was incompetent or under the undue influence of another  when the testator executed or changed an estate planning document may give rise to an actionable  claim by a beneficiary.

See LeClair Ryan, U.S. District Court for District of Massachusetts Holds Testator’s Attorney Can Be Liable to a Beneficiary, Lexology, Feb. 19, 2015.

February 25, 2015 in Estate Administration, Estate Planning - Generally, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 24, 2015

Burnish Your Legacy by Passing Down Ethical Advice

Passing Down PictureWriting an ethical will to convey the lessons learned in life can increase your own happiness and help the next generation more easily pass through the travails of the world. Here are some tips for getting started passing down your personal and professional experiences:

  • Write down the hard earned wisdom from your years.
  • Share the moments that made you as a person.
  • Explain the blessings you have been granted.
  • Talk about your lifetime obstacles and explain how you overcame them.
  • Pass on the knowledge you learned from those that came before you.
  • Tell the younger generation what you hope they can accomplish.
  • Decide when to share the ethical will with those close to you.
  • Encourage your clients to share their experience with their own loved ones.

See Steven McCarty, 6 Reasons Every Advisor Needs an Ethical WillLife Health Pro, Feb. 9, 2015.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

February 24, 2015 in Estate Planning - Generally, Professional Responsibility, Wills | Permalink | Comments (0) | TrackBack (0)

New Book on Ethical Issues in International Estate Planning

WorldBloomberg BNA recently released a Tax Management Portfolio entitled, Ethical Issues in International Estate Planning, and written by Michael A. Heimos (Michael A. Heimos, P.C., Denver, Colorado) and Christopher M. Reimer (Long Reimer Winegar Beppler LLP, Jackson, Wyoming). Provided below is the description of the portfolio:

Tax Management Portfolio, Ethical Issues in International Estate Planning, No. 872, discusses professional responsibility issues that tend to arise when an estate planning practice crosses international boundaries. Many of the ethical standards applicable to estate planning lawyers in general apply to international estate planning. But this Portfolio focuses on issues of special concern for international planning.

Despite its international focus, this Portfolio is directed at U.S. lawyers. While international planning often implicates foreign laws and rules, this Portfolio is largely based on the framework provided by the Model Rules of Professional Conduct (Model Rules) adopted by the American Bar Association (ABA). International ethical issues frequently have domestic analogues. For example, unauthorized practice of law in a foreign jurisdiction bears many similarities to the longstanding issue of unauthorized practice across state lines by U.S. lawyers. The application of domestic ethical rules to estate planning in general is dealt with in more depth in Price, 801 T.M., Conflicts, Confidentiality, and Other Ethical Considerations in Estate Planning. This Portfolio discusses some of those rules, as well as domestic and foreign regulations, as they tend to become relevant in the international planning context.

The function of this Portfolio is to provide information about the following issues, which can arise when providing estate planning advice and services to international clients:
  • Determining applicable ethical and legal rules
  • Providing competent representation
  • Avoiding committing unauthorized practice of law
  • Hiring and associating with foreign lawyers and legal consultants
  • Advertising international practice
  • Avoiding providing assistance to fraud, money laundering, terrorism, and other unlawful activities.

The Worksheets include a table of Model Rules relevant to international estate planning, sample engagement letter, notice of termination of representation, asset protection solvency affidavit, steps for ensuring professional responsibility compliance, anti-money laundering and terror finance screening procedures, a sample fee splitting agreement letter, and sample letterhead for a multinational partnership.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

February 24, 2015 in Books, Books - For Practitioners, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, February 23, 2015

Personal Representative's Lawyer Doesn't Have Duty to Successor

GavelThe beneficiary of an estate succeeded in removing the personal representative and having himself appointed as the successor. He then sued the law firm who had represented his predecessor for professional negligence and breach of fiduciary duty relating to duties owed to the estate and to himself as a beneficiary. The trial court granted summary judgment for the law firm because the firm owed no duty to the estate.

In Estate of Cabatit v. Canders, the Supreme Judicial Court of Maine affirmed, holding that whether or not an attorney owes a duty of care to a successor personal representative depends on the existence of an attorney-client relationship unless an exception applies. The court then adopts a “modified multi-factor balancing test” under which the first inquiry is whether the transaction was intended to benefit the beneficiary. Here the facts lead to one conclusion: because the successor personal representative was represented throughout the probate proceeding by attorneys with no connection to the law firm representing the personal representative, which in addition had informed him that they did not represent him, the grant of summary judgment was affirmed.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.

February 23, 2015 in Estate Administration, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)