Wills, Trusts & Estates Prof Blog

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

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)

Friday, February 20, 2015

CLE on Managing Risk in Your Trusts and Estates Practice

CLE Photo

The American Bar Association Section of Real Property, Trust and Estate Law is holding a CLE entitled, Planning, Perils and Prevention: Managing Risk in Your Trusts and Estates Practice, on March 3, 2015 from 1:00 – 2:30 PM ET via webinar.  Here is why you should attend:

The program will use hypothetical scenarios to review professional responsibility issues that arise in a trust and estate planning practice, including the representation of spouses, and of family members from different generations. The presentation will focus on the application of the rules governing conflicts of interest and confidentiality in the estate planning context, as well as the representation of clients under a disability.

Our panelist will discuss:

  • Rules governing conflicts of interest;
  • Rules governing confidentiality;
  • Intergenerational representation;
  • Joint versus multiple representation;
  • Representation of clients under a disability;
  • Drafting Issues;
  • Representing fiduciaries; and
  • What does risk management look like for the Trusts and Estates Practice.

February 20, 2015 in Conferences & CLE, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Sunday, February 15, 2015

Article on Trustee Liability for Breach of Trust


Oonagh B. Breen (UCD) recently published an article entitled, Trustee Liability for Breach of Trust in the Common Law World, UCD Working Papers in Law, Criminology & Socio-Legal Studies Research Paper No. 2 (2015).  Provided below is the abstract from SSRN:

When is a trustee liable at common law for breach of trust? Equity teaches us that a trustee’s duties are onerous and far-reaching not least because a trustee is bound in law and in conscience to give full effect to the terms of the trust in furtherance of the sole interests of the beneficiary. Liability is strict and is focused on restoring the trust fund when loss is occasioned or stripping the trustee of unauthorised gains made on the back of the fiduciary relationship, even if the beneficiaries have also gained. The quantum of damages (and, indeed, the extent of liability) typically requires some consideration of variables relating to the nature and context of the alleged breach; the form of damage suffered and its causal connection to the occasioned wrong; the involvement or non-involvement of any co-trustees in the transaction in question and their professional status; and the terms of the trust deed governing the trustees’ behaviour. In recent years, judicial consideration has been given to the degree to which it is possible for a trustee to contract out of the fiduciary obligations traditionally associated with a trust without undermining the valuable benefits bestowed by this relationship. Attention has also been focused lately on the courts’ ability to intervene and to undo discretionary decisions taken by trustees which, in hindsight, turn out to have unintended consequences for the beneficiaries concerned.

This paper sets the context for traditional trustee liability outlining some of the forms, causes and general measures of liability in Part I, before exploring in Part II the recent UK Supreme Court judgment in Futter v. HMRC and its implications for trustees who, in hindsight regret decisions made. Part III considers the issue of commercial transaction trusts and the options available to corporate trustees to limit or exclude liability, concluding with an assessment of developments in common law jurisdictions outside the UK towards trustee liability, trustee forgiveness and trustee exoneration.

February 15, 2015 in Articles, Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Saturday, February 14, 2015

Article on Fiduciary Relationships

Lionel Smith

Lionel Smith (McGill University, Faculty of Law) recently published an article entitled, Fiduciary Relationships: Ensuring the Loyal Exercise of Judgment on Behalf of Another, 130 Law Quarterly Review 608-634 (2014).  Provided below is the abstract from SSRN:

In this article, I present a theory of fiduciary relationships that seeks to address both the justification and the content of fiduciary duties. It will also address the question of remedies, which sheds important and neglected light on the question why this part of the law has the shape that it does. All three aspects — the reasons we impose these duties, what these duties require, and the remedies associated with them — are linked to one another in a conceptual unity that reveals the interlocking aspects of private law’s concern with relationships in which one person is empowered to exercise decision-making authority on behalf of another.

February 14, 2015 in Articles, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, February 9, 2015

Bodee Peterson's Parents File Claim Against Attorney's Estate

David Roth

Parents of a Hudson boy who died in a 2011 water skiing accident said they were cheated by their former attorney. 

When nine-year-old Bodee Peterson died following an accident on Eagle Lake in Evansdale, attorney David Alan Roth represented the child’s estate to settle claims with the Waterhawks ski team.  Now, the parents claim Roth misled them regarding the amount of settlement and subsequently kept most of the money. 

Roth committed suicide in September, and last Thursday Bodee’s father, Ryan Peterson, filed $794,900 in claims in Roth’s estate. 

According to the claim, the ski team settled for $600,000, however, Roth told the family the settlement was for $750,000.  Of that, $44,900 was to be placed in conservatorships for the boy’s brother and sister until they turned 18.  Roth indicated he would purchase annuities for structured settlements to fund the conservatorships.  “No annuity or structured settlement was ever purchased, and David A. Roth has misappropriated the funds that were to be paid to the siblings.”  Furthermore, much of the money that was to go to Bodee’s estate is unaccounted for. 

See Jeff Reinitz, Bodee Peterson’s Parents File Claim Against Roth Estate, WCF Courier, Feb. 8, 2015.

February 9, 2015 in Estate Administration, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Attorney Disbarred for Trusts Sold by Nonlawyer Agents

Gavel2The Pennsylvania Supreme Court ordered the disbarment of Barry O. Bohmueller, a Montgomery County, attorney, for his involvement in a living trust scheme, in which nonlawyer agents sold living trust and annuities to elderly individuals at their homes. The sales that formed the basis for the January 23 order took place around a decade ago. The court's decision to disbar Bohmueller came from three justices, with two justices dissenting based on their stance that Bohmueller should have been disbarred for five years instead.

See Lizzy McLellan, Attorney Disbarred for Nonlawyer Estate Planning Work, The Legal Intelligencer, Feb. 3, 2015.

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

February 9, 2015 in Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, January 26, 2015

Approaching Issues of Capacity

Writing 2

While capacity can be an issue at any age, it is statistically most common among the elderly.  Many people decline in mental and physical ability as they age and capacity becomes a concern.  However, it is a well-known pillar of capacity law that practitioners cannot assume that capacity is an issue.  It is the professional’s responsibility to probe and verify in order to confirm or dispel any concerns surrounding an assessment of capacity. 

An advisable way to approach extracting issues of capacity with an elderly individual is through delicate conversation and encouraging openness.  Though it is important to avoid offending clients who may be uncomfortable, this is a crucial issue to ensure proper estate planning.  Sometimes, apparent symptoms of incapacity can result from cultural differences between client and lawyer.  Other times, apparent cultural issues can mask signs of incapacity.  As a lawyer, information regarding capacity may govern whether or not you can take instructions or act for the person, or whether any will prepared will ultimately be valid. 

See Ian M. Hull, How Lawyers Should Approach Issues of Mental Capacity, The Huffington Post Canada, Jan. 24, 2015.

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

January 26, 2015 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Professional Responsibility, Wills | Permalink | Comments (0) | TrackBack (0)