Estate Planning for Husband and Wife Leads to $3 Million Judgment

On January 17, 2006, a Comal County, Texas jury award Robert Maxwell (hereinafter Husband) $3 million in damages for actions taken in respect to his estate plan.  The verdict consisted of $1 million for breach of fiduciary duty, $1.5 million in punitive damages against attorney John Dierksen, and $500,000 in punitive damages against the attorney's law firm.

Here are the key facts:

• Attorney David Lamon wrote wills for Husband and Wife which named each other as the primary beneficiary.
• Wife's Mother contacted attorney Dierksen from the same firm as Lamon to write a new will for Wife (her daughter) which leaves everything to her, rather than to Husband (her son-in-law).
• Dierksen wrote the will.
• Wife signed the will.
• Wife died.
• Husband did not learn about the new will until after Wife died.

Husband's attorney explained the situation as follows:

Dierksen did not communicate with [Wife] about the requested new will, or discuss with her the tax or other implications of the will.  Because of his attorney-client relationship with [Husband] and the other plaintiffs, Dierksen knew that this undertaking was a substantial conflict of interest for himself and [his law firm]. Dierksen also knew that the will would cause his clients, including [Husband] and his business interests, as well as [Wife's] eventual estate, substantial harm to the benefit of [Wife's mother].  The new will was in contravention of the planning previously done by Lamon.  In fact, the will drafted by Dierksen resulted in the obliteration of Lamon’s previous efforts and the legal expenses paid by [Husband] and [Wife].

See Ron Maloney, Law firm hit with $3 million judgment, Herald-Zeitung [New Braunfels, Texas], Jan. 19, 2006

Special thanks to Michael Sierra for bringing this case to my attention.