Sunday, April 14, 2019
An appointed or named executor has a seemingly endless list of tasks to perform, but assembling an appropriate team of advisors can help avoid many pitfalls. Here is a tally of ways to avoid the largest of the pitfalls, compiled by numerous horror stories.
- Do not hire your real estate attorney to probate the will.
- Chances are that he most likely is not well-versed in probate law.
- Do not ignore the beneficiaries.
- They are the ones to whom you owe a fiduciary duty, so they will not go away until your tasks and duties are fulfilled.
- Do not think you are all powerful.
- You might have gotten the job by being the testator's favorite niece or nephew, but the actual business of the estate takes a certain level of humility.
- Do not fail to act.
- Estate need to be closed, and the sooner the better for everyone involved. And ignoring the responsibilities does not close it!
- Do not fail to speak with your attorney because you are concerned about lawyers’ fees.
- Properly handling an estate can get expensive, and some tasks that can be done by yourself should be to save on fees. But also rely on your attorney's advice.
- Do not favor one beneficiary over the others.
- If the testator did not favor one of the beneficiaries, you certainly cannot. This can get you removed as executor.
- Do not resort to self-dealing.
- Though some of the estate's more enticing assets may seem within reach with just a little tweaking, any sort of personal gain would most likely be a breach of your fiduciary duty.
- Do not forget you have personal liability.
- "With great power comes great responsibility." Thus, if you make a irreparable mistake, you may be held responsible for the consequences.
See Christine Fletcher, How to Avoid the 8 Biggest Executor Mistakes, Forbes, April 11, 2019.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
Tuesday, February 26, 2019
R. Kevin Spencer recently published an Article entitled, Good Estate Planning Process: A Panacea for Litigation, 11 Tex. Tech Est. Plan. Com. Prop. L.J. 137-150 (2018). Provided below is the introduction to the Article.
Every estate litigator must contend with an estate planner, but not every estate planner must contend with an estate litigator. Most doctors, if they practice long enough, assume that will sued at some point, i.e., their work product will be questioned or challenged. While estate planner cannot be sued by a beneficiary in Texas for their estate planning work due to lack of privity, most estate planners believe their work product will someday be contested; but it does not have to happen. The job of an estate litigator is to search for evidence proving the invalidity of a Will, based upon lack of testamentary capacity and undue influence. A failure of formalities and solemnities or "forgery or other fraud" are additional grounds for invalidity. Unlike fire inspectors, who must search for the origin pf a fire. estate litigators know a Will originates with the scrivener. This article reveals some of the secrets of estate litigators and suggests the diligence needed for estate planners to avoid them, such as the importance of documenting their work, and preparing to defend their work product. The quality of the process determines the quality of the product; a Will contest necessarily includes attacking the process. Much to the chagrin of estate litigators, this article arms estate planners with information and knowledge to avoid the attack. Some of the information may seem elementary to good estate planners, but, unfortunately, these errors occur time and time again. The development of a quality estate planning process will improve the product for the client and help to avoid scrutiny of the estate planner's work product in a Will contest.
Thursday, February 14, 2019
Article on Old Days are Dead and Gone: Estate Planning Must Keep its Head Above Water with the Changing Tide of Technology
Alexandra M. Jones recently published a Comment entitled, Old Days are Dead and Gone: Estate Planning Must Keep its Head Above Water with the Changing Tide of Technology, 11 Tex. Tech Est. Plan. Com. Prop. L.J. 161 (2018). Provided below is an abstract of the Comment.
Fresh out of law school, many young lawyers are eager to start their legal careers and just right into the courtroom. While they still need some practical training first, many young lawyers accept jobs that deal solely with discovery or intake until they can slowly make their way up the legal food chain. With the advancement of technology, programs like expert systems and artificial technology are taking over some of these first-year associate jobs because they are less expensive and more efficient. As a result, law firms are not hiring as many recent graduates. Eventually, technical jobs could replace the classical notion of attorneys. However, the growing concern that technology is taking over jobs in the legal field is not the only problem caused by artificial intelligence. Issues arise with how much impact technology has in transactional fields, such as estate planning, and the future role that artificial intelligence will play. An even greater issue arises with who is liable for artificial intelligence mistakes when there is very little in terms of legislation.
Tech industry experts are in stark disagreement about the means of regulating artificial intelligence. Stephen Hawking and Elon Musk have warned the world of dangers of advancing artificial intelligence and that governments need to start creating laws and regulations. Experts such as Bill Gates and Mark Zuckerberg believe that creating new regulation is not realistic because the technology has not fully developed. Some critics argue that researchers are already regulated enough, and adding more regulation will stifle innovation. This comment focuses the issue on a much smaller scale by suggesting that lawyers, law firms, and other entities that utilize artificial intelligence, or its branch of expert systems, in their estate planning practice are consistent with ethical rules of conduct for the system. Additionally, this comment will expand upon the meaning of the unauthorized practice of law as it relates to artificial intelligence.
This comment proceeds in five parts. Part I introduces the concept of artificial intelligence through practical and theoretical examples and definitions. Part II discusses the impact that artificial intelligence has on expansion. Part III considers the effect artificial intelligence have on estate planning laws. Part IV discusses the parties liable for artificial intelligence. Part V suggests methods of ensuring compliance with ethical standards to estate planning practitioners as technology becomes more absorbed in transactional fields.
Sunday, January 20, 2019
Naming the correct party to a suit is one of the most elementary and necessary aspects to any litigation, and though it may appear to be a simple mistake, it can cause the entire case to come crashing down.
In the appellate level court of Virginia, a wife that had been excluded from her husband's will found this out the hard way. After realizing the circumstance's of her late husband's will after it had been entered into probate, she filed a suit in circuit court seeking to claim her statutory elective share of his augmented estate. When a spouse is written out of a decedent spouse's will, some state's have statutes providing that the surviving spouse is entitled to a certain portion of the estate. The procedures to do so are very precise.
The wife was styled and brought against the Estate itself and did not include the administratrix, the fiduciary appointed to administer the Estate - but the wife did serve the administratrix. The Administratrix later made a motion to dismiss the lawsuit on the grounds that it was filed against the wrong party, and also as the statute of limitations had passed, not allow the wife to file a new suit against the administratrix. Wife argued the amending the complaint was more equitable remedy. The trial court ruled that naming the estate as the party was a nullifying offense, and the complaint could not be amended as there was no other party named. The appellate court affirmed the decision, as litigants have a duty to investigate the proper parties to sue or be sued, and all parties must be living.
See Brett Herbert, Matters of Style: Spouse’s Elective Share Suit Dismissed for Naming the Wrong Party, Estate Conflicts, January 14, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
Monday, May 21, 2018
The Australian Broadcasting Company, or ABC, revealed that financial advisors at a firm based in Sydney were charging deceased clients for services that could not have been taking place. In one instance that was investigated, a widow claimed that after her husband passed away in 2013, the financial firm continued to bill him.
This is not the only Australian financial firm that is being investigated. According to Bloomberg, the Financial Services Royal Commission has been looking into the practices of several firms for fee malpractice.
See Asia Martin, Advisor Firm In Australia Accused Of Billing Deceased Clients, Financial Advisor, April 24, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.
Thursday, April 12, 2018
27-year-old Ekaterina Fedyaeva underwent routine surgery at a hospital in Ulyanovsk, Russia when hospital staff inadvertently hooked her up to a formalin drip instead of the intended saline drip. Formalin drips contain formaldehyde, which is a chemical used in many ordinary household items, though it is most commonly known for its use in preventing corpse decay. While useful in a deceased body, the chemical wreaks havoc on the living. Galina Baryshnikova, Fedyaeva’s mother and witness to the after-effects of the improper drug administration, said the chemical “was simply eroding her body from inside. Her legs were moving, she had convulsions, her whole body was shaking.” Fedyaeva was eventually transferred to a Moscow hospital where she passed away.
See Michael Bartiromo, Russian Woman Dies After Given Formaldehyde Instead of Saline Drip, Fox News, April 11, 2018.
Thursday, June 22, 2017
Generally, estate-planning attorneys in California who draft wills and trusts can only be sued by the client who hired them. There is a narrow exception to this rule. An attorney may be liable to a beneficiary when the attorney’s error harms the intended beneficiaries of the will or trust. The court will use a balancing test to determine if the attorney should be accountable for a drafting mistake. Among these factors are the extent of harm, foreseeability, and proximate cause. When all the balancing factors are met, a harmed beneficiary may successfully file suit against the drafting attorney. Of course, potential damages should be sufficient to warrant the suit; litigation may not be worth the effort in every circumstance.
See Keith Davidson, Estate Planning Attorneys May Be Held Liable in Legal Malpractice Lawsuits Where Intended Beneficiaries Lose Inheritance Under a California Trust or Will Due To Attorney Error, Albertson & Davidson, August 4, 2016.
Wednesday, June 21, 2017
Gerry W. Beyer recently published an Article entitled, Recent Texas Cases Impacting the Wills, Probate, and Trust Practice, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:
This article discusses recent judicial developments relating to the Texas law of intestacy, wills, estate administration, trusts, and other estate planning matters. The discussion of each case concludes with a moral, i.e., the important lesson to be learned from the case. By recognizing situations that have led to time consuming and costly litigation in the past, estate planners can reduce the likelihood of the same situations arising with their clients.
Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.
Wednesday, April 19, 2017
Kaitlyn C. Kelly recently published an Article entitled, Put Privity in the Past: A Modern Approach for Determining when Washington Attorneys Are Liable to Nonclients for Estate Planning Malpractice, 91 Wash. L. Rev. 1851 (2016). Provided below is an abstract of the Article:
Even in the best of circumstances, an estate plan may leave intended beneficiaries frustrated. Occasionally, an attorney's alleged mistake in the execution of a will or administration of a trust sparks the beneficiaries' anger. Under Washington law, it is unclear whether intended beneficiaries may sue an estate planning attorney for malpractice. Generally, an estate planning attorney's client is a testator, not a testator's intended beneficiaries; thus, the intended beneficiaries are not in privity of contract with the attorney. Rather, the only individual in privity with the accused attorney is usually deceased at the time of a malpractice lawsuit. If a strict privity rule applies, courts will leave beneficiaries with few options to hold attorneys accountable for costly mistakes in the drafting or execution of estate planning documents. On the other hand, courts will expand the scope of liability too far if they allow any nonclient to sue an estate planning attorney for malpractice.
First, this Comment traces trends in Washington estate planning malpractice law. The discussion begins with two Washington State Supreme Court decisions that suggest a balancing test, rather than a strict privity rule, defines the scope of attorney malpractice liability to nonclients. Then it analyzes two Washington State court of appeals cases that demonstrate how the balancing test still favors privity in its application. Second, this Comment weighs the strengths and weaknesses of other jurisdictions' approaches to attorney malpractice liability to nonclients. Third, it considers different scenarios in which courts may hold an estate planning attorney liable to nonclients under Washington law. Finally, this Comment recommends that courts require nonclient intended beneficiaries to exhaust Washington's will and trust reformation statute before bringing a claim against an estate planning attorney.
Friday, February 10, 2017
Boston attorney Laurence Barrow (the estate planning equivalent of Clarence Darrow) had recently completed a complicated estate plan for one of his clients. In addition to a maze of international entities and the usual estate planning documents, the plan included a domestic asset protection trust, to be established in Ohio, and which was to hold a substantial portion of the client’s liquid assets. This seemed like a reasonable plan, as the client, Sarah Bellum, was a pediatric brain surgeon and was continually concerned about exposure to malpractice claims.
Pleased with the plan, Sarah made an appointment to sign the documents in Attorney Barrow’s office. On the morning of the day of that appointment, Sarah was scheduled to perform surgery on a five-year-old patient. She performed the surgery, and after checking on the patient proceeded to Barrow’s office. The surgery appeared to be successful, but a short time after the patient was discharged, the child’s parents noticed some strange behavior by the child. A physician who examined the child advised the parents that the behavior could be part of the recovery process and could possibly cure itself in time, but the child should be watched.
At Barrow’s office, Sarah reviewed and then signed all documents. It was agreed that Barrow would follow up with instructions on transferring Sarah’s assets to the Ohio trust. On the way home from Barrow’s office, however, Sarah was involved in an automobile accident, suffering a severe concussion that left her in a coma. The doctors felt she had a good chance of recovery, but they could not say when. In their own words, “It could be four weeks or four months or four years.”
Sarah’s coma turned out to last longer than four weeks or four months. She finally regained her competence after four years. As it also turned out, the child’s condition never improved since the parents obtained the second opinion, and it became clear that the child would have a mild handicap for life. Thus, a malpractice suit was brought against Sarah on behalf of the child for the child’s personal injury. In due time, the child’s suit was successful, and the child was awarded a substantial judgment for damages. In suing on the judgment, the child’s attorney asked the court to treat Sarah’s transfer of assets to the trust as a fraudulent transfer, because the child was a creditor at the time of the transfer, and the suit was brought well within the allowable time period.