Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Friday, January 24, 2014

Article on An Economic Theory of Fiduciary Law

CashRobert H. Sitkoff (Harvard Law School) recently published an article entitled, An Economic Theory of Fiduciary Law, Philosophical Foundations of Fiduciary Law, Andrew Gold & Paul Miller eds., Oxford University Press, 2014, Forthcoming.  Provided below is the abstract from SSRN:

This chapter restates the economic theory of fiduciary law, making several fresh contributions. First, it elaborates on earlier work by clarifying the agency problem that is at the core of all fiduciary relationships. In consequence of this common economic structure, there is a common doctrinal structure that cuts across the application of fiduciary principles in different contexts. However, within this common structure, the particulars of fiduciary obligation vary in accordance with the particulars of the agency problem in the fiduciary relationship at issue. This point explains the purported elusiveness of fiduciary doctrine. It also explains why courts apply fiduciary law both categorically, such as to trustees and (legal) agents, as well as ad hoc to relationships involving a position of trust and confidence that gives rise to an agency problem.

Second, this chapter identifies a functional distinction between primary and subsidiary fiduciary rules. In all fiduciary relationships we find general duties of loyalty and care, typically phrased as standards, which proscribe conflicts of interest and prescribe an objective standard of care. But we also find specific subsidiary fiduciary duties, often phrased as rules, that elaborate on the application of loyalty and care to commonly recurring circumstances in the particular form of fiduciary relationship. Together, the general primary duties of loyalty and care and the specific subsidiary rules provide for governance by a mix of rules and standards that offers the benefits of both while mitigating their respective weaknesses.

Finally, this chapter revisits the puzzle of why fiduciary law includes mandatory rules that cannot be waived in a relationship deemed fiduciary. Committed economic contractarians, such as Easterbrook and Fischel, have had difficulty in explaining why the parties to a fiduciary relationship do not have complete freedom of contract. The answer is that the mandatory core of fiduciary law serves a cautionary and protective function within the fiduciary relationship as well as an external categorization function that clarifies rights for third parties. The existence of a mandatory fiduciary core is thus reconcilable with an economic theory of fiduciary law.

January 24, 2014 in Articles, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Thursday, January 23, 2014

Client Overcharged By Dh 7.5 Million

CashThe appeals civil court in Abu Dhabi ruled that a lawyer had overcharged his client by millions. The client in the matter was gifted Dh 50 million from his brother, but only received Dh 5 million. Disappointed in what he actually inherited, the client sued. The court determined that the attorney spent nine months on the lawsuit and did not deserve Dh 10 million in fees. Apparently, the attorney calculated his fee on the entire inheritance which was worth more than Dh 1 billion. Based on the attorney’s work, the court cut the fee from Dh 10 million to Dh 2.5 million.

See Haneen Dajani, UAE Lawyer Overcharged Client By Dh7.5 Million, Court Rules, The National , Jan. 22, 2014.

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

January 23, 2014 in Current Events, Professional Responsibility, Travel | Permalink | Comments (0) | TrackBack (0)

Sunday, December 15, 2013

Book on Ethics in the Practice of Elder Law

EthicsElderRoberta K. Flowers and Rebecca C. Morgan recently published a book entitled, Ethics in the Practice of Elder Law, (January 2013).  Provided below is a description of the book found on the American Bar Association Web Store:

In an elder law practice, ethical issues can occur at any point in the representation, and in some cases these unexpected situations can take the attorney by surprise. Ethics in the Practice of Elder Law provides an informed overview of the most common issues that can occur, explains the issues that can arise and how to be alert for them, and suggest ways to work through these issues effectively and ethically.

Authors Roberta K. Flowers and Rebecca C. Morgan offer a range of hypothetical situations, along with a series opening questions for each, followed by a discussion suggestions for analyzing and responding to the issue. These discussions offer a reliable framework for analyzing the ethical questions within the scope of the Model Rules and ancillary resources.

The authors give readers the knowledge to determine which questions to ask in the representaiton. They refer to and discuss the 9 "Cs" of elder law ethics:

  • Competency: where to find guidance
  • Client: who is the client
  • Confidentiality: keeping confidences
  • Conflicts of interest: who can the elder law attorney represent
  • Capacity: representing clients who have diminished capacity
  • Control: representing guardians
  • Complex fiduciary representation
  • Consulting: litigation issues in an elder law practiceCompetition: ancillary practices and marketing

Ethics in the Practice of Elder Law provides invaluable information as appendices, including the National Academy of Elder Law (NAELA) Aspirational Standards, relevant ABA ethics opinions, and a range of supplemental resources, checklists, and letters.

December 15, 2013 in Books, Books - For the Classroom, Elder Law, Malpractice, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Thursday, November 28, 2013

Article on The Fiduciary Relationship

SsrnPaul B. Miller (McGill University Faculty of Law) has recently published an article entitled, The Fiduciary Relationship (November 10, 2013). Provided below is the abstract to the article from SSRN:

Fiduciary law is rife with references to fiduciary relationships. Most notably, the attribution of fiduciary duties turns on the existence of a "fiduciary relationship." But does private law admit of such a construct, and if it does, is the fiduciary relationship distinctive relative to other kinds of private law relationship? Many fiduciary law scholars are skeptical on both counts. Leading scholars have claimed that the fiduciary relationship is indefinable. Others say that, when properly defined, the fiduciary relationship is seen to be non-distinctive. In this chapter I argue that the fiduciary relationship is both definable and distinctive. I advance a theory of the fiduciary relationship – the fiduciary powers theory – which suggests that fiduciary relationships are typified by the fiduciary’s exercise of powers derived from the legal personality of persons (normally, the person of the beneficiary or her benefactor). I argue for the viability and utility of the fiduciary powers theory by demonstrating that it can account for the fiduciary nature of relationships of recognized fiduciary status and by showing how it can help resolve disputes over the characterization of other relationships.

November 28, 2013 in Articles, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 20, 2013

Estate Planning Lawyer and Associate Pleaded Guilty to Fraud and Conspiracy

  GavelAs I have previously discussed, estate planner, Joseph Caramadre was recently convicted for stealing millions from insurance companies and bond issuers. Caramadre was taking the identities of terminally ill people and defrauding them.


Recently, a federal magistrate judge, Patricia A. Sullivan, made recommendations that will be provided to the U.S. District Court Judge, William E. Smith, for sentencing on December 16. Sullivan believes that Caramadre should be held liable for $46 million dollars as the leader of the fraudulent investment scheme and his former employee, Raymour Radhakrishnan, should be held accountable for $33 million because of his more recent involvement since 2007. Unfortunately, Sullivan still feels that the victims and their families will not be fully compensated because the court is unable to order restitution for pain and suffering.

See Katie Mulvaney Court: Cranston Estate Planner Wrought $46 Million In Losses, Providence Journal,  Nov. 7, 2013.

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

November 20, 2013 in Current Events, Estate Administration, Estate Planning - Generally, Malpractice, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Sunday, November 10, 2013

Article on Attorney Client Privilege

FiduciaryMike W.Bartolacci, Tyler Short, and Bruce Talen (Real Property, Trust and Estate Law Journal) recently published an article entitled, The Attorney Client Privilege And The Fiduciary Exception: Why Frank Discussions Between Fiduciaries And Their Attorneys Should Be Protected By The Privilege , 48 Real Prop. Tr. & Est. L.J. 1-33 (2013).  Provided below is the description:

The attorney–client privilege generally protects confidential disclosures made by a client to an attorney in order to obtain legal assistance. Many courts in the United States have weakened the privilege by applying an exception for fiduciaries who retain attorneys. The authors identify a trend to narrow or eliminate this fiduciary exception and conclude that the trend should continue because recognizing the attorney–client privilege in the fiduciary context will further the purposes of the privilege without adversely affecting the ability of beneficiaries to receive adequate information about the trust.

November 10, 2013 in Articles, Malpractice, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 5, 2013

Estate Planning Lawyer Accused of Wire Fraud and Money Laundering

JailWendy Weikal -Beauchat, Pennsylvania estate planning lawyer, is accused of embezzling more than $3 million dollars from eight clients over the past six years. She is facing federal charges. Specifically, she is being accused of wire fraud money laundering. Wendy was disbarred earlier this year.

See Martha Neil, Former Estate-Planning Lawyer Faces Federal Charges in Claimed $3M Client Theft Case, ABA Journal,  Nov. 4, 2013.

November 5, 2013 in Current Affairs, Malpractice, New Cases, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Friday, November 1, 2013

Who Should Monitor the Trustee?

Trust fidThe use of Trust Protectors is a new tool for domestic estate planners. Now, Trust Protector’s provide more oversight over the trustee actions. Trust Protectors can prevent self-dealing and incompetence. 

However, Forbes contributor, Jay Adkisson, does not believe that Trust Protectors should be managing the fiduciary activities of the trustee. He explains the role of monitoring the trustee belongs to the co- trustees or the beneficiaries. Then those individuals can bring their complaints to the Trust Protector who can remove the trustee.

See Jay Adkisson, A Critique of the Trust Protector as a Fiduciary, Wealth Strategies,  Oct. 30, 2013.

November 1, 2013 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Sunday, October 27, 2013

Article on Obscure Tennesee Opinion

Stmaryslogo_17Charles Epps Ipock, (St. Mary's University School of Law) recently published an article entitled, How an Obscure Tennessee Opinion Uncovers the Veil of Legal Malpractice Between Asset-Protection Trusts and the Uniform Trust Code , (In re Estate of Stidham, 2012 WL 3612386, 2012.) 3 St. Mary's J. Legal Mal. & Ethics 308-318 (2013). Provided below is the introduction to the article:

In the year 2000, the Uniform Law Commissioners approved the Uniform Trust Code (UTC). This was the first effort to provide states with an all- inclusive model for codifying their trust laws. Since then, at least twenty -three states adopted some, or most of the UTC. However, provisions within the UTC regarding asset- protection trusts.

October 27, 2013 in Articles, Malpractice, New Legislation, Professional Responsibility, Trusts | Permalink | Comments (0) | TrackBack (0)

Saturday, October 26, 2013

Five Questions to Determine an Inheritance

EstateplanningFinancial planning has put together the top five factors that estate-planning specialists should take into account when determining an inheritance. Designing an inheritance includes looking at the totality of the situation however, below are a few factors that will help achieve a better estate plan. 

  1. Is there an amount of inheritance that would deter the beneficiary from being productive?
  2. What is a good age to inherit?
  3. Are there any inhibiting issues such as drug addiction or alcoholism?
  4. Should each beneficiary be treated similarly?
  5. Who should be your fiduciary?

See Tracy Craig, Estate Plan Design: 5 Key Questions for Clients, Financial Planning , Oct. 24, 2013.

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

October 26, 2013 in Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)