Thursday, January 21, 2010
Illinois: Can Drafting Attorney Serve as Third-Party Consent for Changing Client's Estate Planning Documents?
Dunn v. Patterson, Ill. Slip Op. No. 07--MR--399 (App. Ct. 3rd Dis. Nov. 18, 2009): Attorney Lawrence Patterson prepared estate planning documents for Charles and Charlotte Dunn. Each document contained a provision stating that the documents could not be amended or revoked without Patterson's written consent or order of the court, a clause Patterson often used to prevent elder abuse. A few months later, new counsel retained by the Dunns contacted Patterson because the Dunns wanted Patterson's name removed form the documents. Patterson responded that if the Dunns would not personally meet with him regarding the matter, they would need a court order to make any changes. In a subsequent court proceeding, the Dunns filed motions for declaratory judgment against Patterson and for judgment on the pleadings, asserting that no genuine issue of material fact existed in the case and that Rule 1.2(a) of the Professional Rules of Conduct required Patterson to abide by their directions. The Dunns did not seek an independent order from the court to amend or revoke the documents. The lower court "granted the plaintiffs' motion for judgment on the pleadings and held that the qualified revocation or amendment provision requiring Patterson's approval was contrary to public policy because it ignored the provisions of Supreme Court Rule of Professional Conduct 1.2." The lower court ordered Patterson to pay the plaintiff's attorney's fees and costs in the amount of $5,393.75.
The Appellate Court of Illinois, Third District, reversed and remanded, finding that third-party consent is recognized in the state of Illinois as a way to protect settlors and principals from making changes to a trust document as a result of undue influence or mental incompetency. The court held that
Out here in the cornfields of Illinois and, we suspect, sometimes in the large metropolitan areas of Illinois, one's lawyer is often his or her most trusted friend and advisor with respect to major life decisions. Where, as here, the lawyer is given no financial stake in an estate by virtue of his capacity as a fiduciary, we see no reason why the family lawyer cannot act in such capacity simply because he is drafting a trust document.
The court further held that because Patterson acted as required by the Dunns in the estate planning documents, he had not acted contrary to rule 1.2(a). Additionally, if Patterson no longer represented the Dunn's, he acted as a responsible fiduciary when he requested to meet with the Dunns before granting or denying permission to amend the documents. For this reason, the court also reversed the sanctions imposed upon Patterson.
Special thanks to Ronald Volkmer (professor of law, Creighton University) for bringing this case to my attention.