American College of Trust and Estate Counsel | ACTEC Commentaries, 4th Edition

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ACTEC COMMENTARIES ON THE MODEL RULES OF PROFESSIONAL CONDUCT

MRPC 1.1: COMPETENCE

A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

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ACTEC COMMENTARY ON MRPC 1.1

Meeting Needs of Client. A lawyer who initially lacks the skill or knowledge required to meet the needs of a particular client may overcome that lack through additional research and study. The needs of the client may also be met by involving another lawyer or other professional who possesses the requisite degree of skill or knowledge. See ACTEC Commentary on MRPC 1.6 (Confidentiality of Information), noting that confidentiality concerns must be addressed prior to involving another lawyer. Thus, the lawyer may choose to consult another lawyer while maintaining the client's confidential information or may obtain the client's consent to associate another lawyer to whom disclosures will be made. The lawyer should be candid with the client regarding the lawyer's level of competence and need for additional research and preparation, which should be taken into account in determining the amount of the lawyer's fee. See ACTEC Commentary on MRPC 1.5 (Fees). A lawyer may, with the client’s informed consent, limit the scope of the representation to those areas in which the lawyer is competent. See MRPC 1.2 (c).

Mistaken Judgment Does Not Necessarily Indicate Lack of Competence. The fact that a lawyer does not precisely assess the tax or substantive law consequences of a particular transaction does not necessarily reflect a lack of competence. In some instances the facts are unclear or disputed, while in others the state of the law is unsettled. In addition, some applications of law and determinations of facts made by courts or administrative agencies are not reasonably foreseeable. In other instances the complexity of a transaction or its unusual nature generate uncertainties regarding the manner in which it will be treated for tax or substantive law purposes and may prevent an otherwise thoroughly competent lawyer from accurately assessing how the transaction would be treated for tax or substantive law purposes.

Importance of Facts. A lawyer who is engaged by a client in an estate planning matter should inform the client of the importance of giving the lawyer complete and accurate information regarding relevant matters such as the ownership and value of assets and the state of beneficiary designations under life insurance policies and employee benefit plans. Having so cautioned a client, the lawyer is generally entitled to rely upon information supplied by the client unless the circumstances indicate that the information should be verified. The lawyer should verify the information provided by the client if the client appears to be uncertain about it or if other circumstances create doubts about its accuracy.

Supervising Execution of Documents. Generally, the lawyer who prepares estate planning documents for a client should supervise their execution. Of course, he or she may arrange for another lawyer to do so. If it is not practical for a lawyer to supervise the execution or if the client so requests, the lawyer may arrange for the documents to be delivered to the client with written instructions regarding the manner in which they should be executed. The lawyer should do so only if the lawyer reasonably believes that the client is sufficiently sophisticated and reliable to follow the instructions. Note that in some jurisdictions the supervision of the execution of estate planning documents constitutes the practice of law which a lawyer may not delegate to a member of the lawyer's staff who is not a lawyer.

Competence Requires Diligence and Communication With Client. Competence requires that a lawyer handle a matter with diligence and keep the client reasonably informed during the active phase of the representation. See MRPCs 1.3 (Diligence) and 1.4 (Communication). See also the discussion of a dormant representation in the ACTEC Commentary on MRPC 1.4.

Staff Training and Oversight. Consistent with the requirements of MRPC 5.1 (Responsibilities of a Partner or Supervisory Lawyers) and MRPC 5.3 (Responsibilities Regarding Nonlawyer Assistants), a lawyer should provide adequate training and supervision to the legal and nonlegal staff members for whom the lawyer is responsible. As indicated by the Comment to MRPC 5.5 (Unauthorized Practice of Law), the Rules do not prohibit lawyers from employing paraprofessionals and delegating work to them. The requirement of supervision is described in the Comment to MRPC 5.3:

Lawyers generally employ assistants in their practice, including secretaries, investigators, law student interns, and paraprofessionals. Such assistants, whether employees or independent contractors, act for the lawyer in rendition of the lawyer's professional services. A lawyer should give such assistants appropriate instruction and supervision concerning the ethical aspects of their employment, particularly regarding the obligation not to disclose information relating to the representation of the client, and should be responsible for their work product. The measures employed in supervising nonlawyers should take account of the fact that they do not have legal training and are not subject to professional discipline.

A lawyer should provide adequate training, supervision, and oversight of the lawyer's staff in order to protect the interests of the lawyer's clients.

ANNOTATIONS
See Caveat to Annotations
(Limiting the Scope and Purpose of the Annotations)

Disciplinary Cases

California:

Butler v. State Bar, 228 Cal. Rptr. 499 (1986). A lawyer was disciplined for failure to inquire adequately regarding the existence of assets standing in decedent’s name alone, failure to communicate with the person named as executor of decedent’s will and his attorney, knowingly misrepresenting that probate was proceeding satisfactorily and improperly prolonging the probate proceeding. “While an attorney may often rely upon statements made by the client without further investigation, circumstances known to the attorney may require investigation.” 228 Cal. Rptr. at 502.

Latten v. State Bar, 268 Cal. Rptr. 845 (1990). A lawyer was suspended from practice for his unreasonable delays in closing an estate administration while serving as executor and intentionally and recklessly failing to perform legal services competently.

Lewis v. State Bar, 170 Cal. Rptr. 634 (1981). This was a disciplinary case in which the lawyer was disciplined for undertaking to administer estate without sufficient skill and without associating another more experienced lawyer.

Colorado:

People v. Woodford, 81 P.3d 370 (Colo. 2003). Attorney was suspended after he created an invalid trust that did not accomplish the purpose he was paid to achieve and failed to advise client of additional legal options.

Indiana:

In re Matter of Deardorff, 426 N.E.2d 689 (Ind. 1981). The lawyer in this case was suspended for one year for lacking the skill to represent clients in an action involving the joint will of their father and stepmother and for misleading them in connection with the representation

In re Matter of Noel, 622 N.E.2d 154 (Ind. 1993). A lawyer was suspended from practice for one year for multiple offenses, which included failures to provide services to the executors of an estate, to close the estate, to file an accounting, and to provide the executors and beneficiaries with information.

Iowa:

Committee on Professional Ethics v. Hutcheson, 504 N.W.2d 898 (Iowa 1993). In this case a lawyer was suspended for one year for falsely certifying documents as a notary public, obtaining an exparte order fixing fees in excess of amount allowed by statute, failing to disclose that two of decedent’s children survived him, and mishandling the estate’s assets.

Kansas:

In re Matter of Jenkins, 877 P.2d 423 (Kan. 1994). A lawyer was suspended indefinitely for multiple offenses including failing to proceed with an estate administration proceeding, failing to communicate with the client and failing to respond to the client’s request for the return of documents, accounting information and monies paid to the lawyer. The lawyer stipulated that his conduct violated MRPCs 1.1, 1.3, 1.4 and 1.15.

Maryland:

Attorney Grievance Comm’n of Maryland v. Myers, 490 A.2d 231 (Md. 1983). This decision came in a disciplinary case in which, in addition to other offenses, the lawyer prepared a will without an attestation clause and signature lines for the witnesses and failed to instruct the client properly regarding manner of execution. The court upheld a three-year suspension.

New Jersey:

In re Matter of Ort, 631 A.2d 937 (N. J. 1993). A lawyer was disbarred for multiple offenses in connection with serving as counsel to the personal representative of an estate, including misrepresenting the value of the lawyer’s services, charging excessive and unreasonable fees, withdrawing money from estate for his own use, and failing to advise client fully, frankly and truthfully.

New York:

In re Matter of Levine, 609 N.Y.S.2d 664 (App. Div. 1994). A lawyer was disbarred for converting funds to his own use from a decedent’s estate of which he was the personal representative and for keeping the estate open for over 12 years.

In re Matter of Margolis, 613 N.Y.S.2d 149 (App. Div. 1994), appeal denied, 641 N.E.2d 159 (N.Y.1994). A lawyer was disbarred for multiple violations of the Code of Professional Responsibility, including misappropriation of trust and escrow funds.

Ohio:

Bar Ass’n of Greater Cleveland v. Shillman, 402 N.E.2d 514 (Ohio 1987). This was a disciplinary case in which the lawyer who served as personal representative and attorney loaned estate assets to another client, which involved serious conflicts of interest, and failed to inform the beneficiary of a trust of conflicts of interest. An indefinite suspension was imposed.

Office of Disciplinary Counsel v. Ball, 618 N.E.2d 159 (Ohio 1993). A lawyer was suspended from practice for six months for neglect in failing to supervise a secretary who embezzled $200,000 from client funds over a ten-year period. “As the record demonstrates, respondent relinquished significant aspects of his probate practice to [his secretary] and failed to set up any safeguards to ensure proper administration of the matters entrusted to him by clients. Delegation of work to nonlawyers is essential to the efficient operation of any law office. But, delegation of duties cannot be tantamount to the relinquishment of responsibility by the lawyer.”618 N.E.2d at 161.

Toledo Bar Ass’n v. Wroblewski, 512 N.E.2d 978 (Ohio 1987). In this disciplinary case the lawyer made no attempt to determine whether or not the decedent was survived by next of kin; failed to include assets in estate inventory; and improperly prepared some tax returns. An indefinite suspension was imposed.

Oregon:

In re Greene, 557 P.2d 644 (Or. 1976). A lawyer was put on probation for selling estate property without properly ascertaining its value and for failing to discover other assets of the estate.

South Carolina:

Matter of Kenyon, 491 S.E.2d 252 (S.C. 1997). The court held that law partners’ misconduct in connection with the disposition of a deceased client’s property and assets warranted an indefinite suspension for the more culpable partner and a public reprimand for the less culpable partner. The misconduct included the attorneys’ involvement in transfers in fraud of creditors, including conveyances aimed at defeating valid tax liens levied by the IRS.

Malpractice Cases

England:

Ross v. Caunters, 3 All England Reports 580 (1979). In holding that a will’s beneficiaries’ lack of privity of contract with the attorney-drafter of the will was no bar to an action for negligence, the English court observed:

In broad terms, the question is whether solicitors who prepare a will are liable to a beneficiary under it if, through their negligence, the gift to the beneficiary is void. The solicitors are liable, of course, to the testator or his estate for a breach of the duty that they owed to him, though as he has suffered no financial loss it seems that his estate could recover no more than nominal damages. Yet it is said that however careless the solicitors were, they owed no duty to the beneficiary, and so they cannot be liable to her.

If this is right, the result is striking. The only person who has a valid claim has suffered no loss, and the only person who has suffered a loss has no valid claim. 3 All Eng. Reports at 582-583.

Alaska:

Linck v. Barokas & Martin, 667 P.2d 171 (Alaska 1983). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

California:

Biakanja v. Irving, 320 P.2d 16 (Cal. 1958). This landmark decision abolished the privity defense in California in malpractice cases involving estate planning, and the Supreme Court of California set forth a “balancing” test for use in a given case to determine liability with respect to a plaintiff not in privity with the attorney. As modified over the years in California, and applied in several other jurisdictions, the test involves balancing the following five factors:

(i)

The extent to which the transaction was intended to affect the complaining beneficiary;

(ii)

The foresee ability of harm to the beneficiary;

(iii)

Whether, in fact, the beneficiary suffered harm;

(iv)

The closeness of connection between the negligent act and the injury; and

(v)

The public policy in preventing future harm.

Boranian v. Clark, 20 Cal. Rptr. 3d 405 (Ct. App. 2004). An estate planning attorney, at the direction of a third party and without meeting or speaking to the client, prepared a will and a “confirmation of gift” for a terminally ill individual. The “gift”was to the third party. When the testator signed the documents, she was lethargic, hallucinating, and in great pain. She died three days later. The testator’s son and daughter contested the will and the gift, and the third party settled by receiving a token amount of cash, but the estate was left with a debt related to the gift. In the subsequent malpractice action, the trial court found in favor of the son and daughter against the attorney. The Court of Appeal reversed, stating:

Although a lawyer retained to provide testamentary legal services to a testator may also have a duty to act with due care for the interests of an intended third-party beneficiary, the lawyer’s primary duty is owed to his client and his primary obligation is to serve and carry out the client’s intentions. Where, as here, there is a question about whether the third-party beneficiary was, in fact, the decedent’s intended beneficiary, and the beneficiary’s claim is that the lawyer failed to adequately ascertain the testator’s intent or capacity, the lawyer will not be held accountable to the beneficiary—because any other conclusion would place the lawyer in an untenable position of divided loyalty.

Borissoff v. Taylor & Faust, 15 Cal. Rptr. 3d 735 (2004). California’s Probate Code confers on a successor fiduciary the same powers and duties possessed by the predecessor. A fiduciary’s powers include the power to commence actions and proceedings for the benefit of the estate, thus giving the fiduciary who hired an attorney with estate funds the power to sue the attorney for malpractice. Therefore, a successor fiduciary has standing to sue a predecessor fiduciary’s attorney for malpractice.

Bucquet v. Livingston, 129 Cal. Rptr. 514, 521 (Ct. App. 1976). In this malpractice case, in holding that, as with beneficiaries under a negligently drafted will, the beneficiaries of a trust have standing to sue the drafter, the court stated:

We are not aware of any cases or guidelines establishing in a civil case a standard for the reasonable, diligent and competent assistance of an attorney engaged in estate planning and preparing a trust with a marital deduction provision. We merely hold that the potential tax problems of general powers of appointment in inter vivos or testamentary marital deduction trusts were within the ambit of a reasonably competent and diligent practitioner from 1961 to the present. [Fn. omitted.] 129 Cal. Rptr. at 521.

Davis v. Damrell, 174 Cal. Rptr. 257 (Ct. App. 1981). A lawyer was absolved from liability for a mistaken opinion because it resulted from the lawyer’s reasoned exercise of informed judgment. “While we recognize that an attorney owes a basic obligation to provide sound advice in furtherance of a client’s best interests … such obligation does not include a duty to advise on all possible alternatives no matter how remote or tenuous.”174 Cal. Rptr. at 260.

Heyer v. Flaig, 74 Cal. Rptr. 225 (1969). In this malpractice case the court held that a lawyer has a continuing duty to a client whose will the lawyer has drafted where the attorney-client relationship continues and the lawyer is aware of events reasonably foreseeable and subsequent to the client’s execution of the will making revisions thereto necessary. The court held that an attorney may be liable for failing to appreciate the consequences of a post-testamentary marriage of which the attorney was advised.

Horne v. Peckham, 158 Cal. Rptr. 714 (Ct. App. 1979). This decision came in a malpractice case involving the creation of a Clifford trust with respect to which the lawyer failed to do the necessary research. The appellate opinion upholds a jury instruction that a general practitioner has a duty to refer the client to a specialist or recommend the assistance of a specialist if a reasonably careful and skillful general practitioner would do so.

Moore v. Anderson Zeigler Disharoon Gallagher & Gray, P.C., 135 Cal. Rptr. 2d 888 (Ct. App.2003). Because an attorney generally has no professional duty to anyone who is not a client, an attorney preparing a will has no duty to the intended beneficiaries to investigate, evaluate, ascertain or maintain the client’s testamentary capacity. The duty of loyalty of the attorney to the client might be compromised by imposing such a duty to beneficiaries on the attorney. [Citing and quoting from the ACTEC Commentary on MRPC 1.14 (3rd Edition)].

Osornio v. Weingarten, 21 Cal. Rptr. 3d 246 (Ct. App. 2004). When preparing a will or other testamentary instrument giving property to a beneficiary who, under applicable state law, is presumptively disqualified from receiving such a gift (in this, case, the decedent’s caregiver), the testator’s lawyer owes a duty of care to the nonclient intended beneficiary to try to ensure that the proposed transfer stands up (in this case meaning that the lawyer should have advised the client testator to obtain a “Certificate of Independent Review”from a totally disinterested and independent lawyer (without which the gift would and in this case did fail), declaring that the gift in question was clearly what the client intended and that the client had not been unduly influenced to make the gift.

Radovich v. Locke-Paddon, 41 Cal. Rptr. 2d 573 (Ct. App. 1995). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.3.

Sindell v. Gibson, Dunn & Crutcher, 63 Cal. Rptr 2d 594 (Ct. App. 1997). In this case the court held that the intended beneficiaries of a law firm’s estate planning services rendered for the beneficiaries’ father suffered “actual injury” (attorneys’fees and litigation expenses) in defending a lawsuit by the surviving spouse’s conservator that plaintiffs alleged would not have been filed but for the law firm’s failure to obtain a waiver of community property rights from the allegedly willing spouse when she was competent.

Smith v. Lewis, 118 Cal. Rptr. 621 (1975). This was a malpractice action involving the failure of the wife’s lawyer in a dissolution action to assert her possible community property interest in her husband’s military pension. The court stated that, “Even as to doubtful matters, an attorney is expected to perform sufficient research to enable him to make an informed and intelligent judgment on behalf of his client.”118 Cal. Rptr. at 628.

Colorado:

Glover v. Southard, 894 P.2d 21 (Colo. Ct. App. 1994). This decision upholds dismissal of a malpractice claim brought by the intended beneficiaries against the scrivener of the decedent’s will and trust agreement. “[I]n drafting testamentary instruments at the behest of a client, an attorney should not be burdened with potential liability to possible beneficiaries of such instruments.”894 P.2d at 25.

Connecticut:

Licata v. Spector, 225 A.2d 28 (Conn. Comm. Pleas 1966). The court here held that the named legatees under a will declared invalid and inoperative because the statutory requirements as to attesting witnesses were not met could maintain an action against the attorney-drafter of the will for the attorney’s alleged negligence in failing to provide for the required number of witnesses.

Stowe v. Smith, 441 A.2d 81 (Conn. 1981). In holding that a disappointed will beneficiary’s cause of action against the drafter may sound in both third-party beneficiary contract and tort theories, this court held that, absent a conflict between the rules of contract and tort, the plaintiff could proceed on either or both grounds.

Delaware:

Pinckney v. Tigani, C.A. No. 02C-08-129 FSS (Del. Super. Ct. 2004). Attorney drafted a trust to provide for the plaintiff. Pursuant to the scope of the engagement agreement, the attorney was not hired to investigate the client’s finances to determine if funds were available to fund the bequest to the trust. In determining whether the beneficiary had standing, the court stated, “Where the drafting is correct [as in the instant case], yet the bequest fails for other reasons, the disappointed heir must allege facts that irrefutably lay the bequest’s failure at the scrivener’s door.” The court held that the attorney did not owe a duty of care to the trust beneficiary to investigate the decedent’s finances to ensure that the bequest would be funded because the scope of representation was limited to preparation of documents, and the engagement letter specifically excluded any investigation into the decedent’s finances.

District of Columbia:

Hopkins v. Akins, 637 A.2d 424 (D.C. 1993). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Needham v. Hamilton, 459 A.2d 1060 (D.C. 1983). In a case of first impression, the court here held that the intended beneficiary of an allegedly negligently drafted will is not barred by the lack of privity from bringing a suit for malpractice against the attorney-drafter. (The attorney-drafter had admittedly failed to include a residuary clause in the will as executed.)

Florida:

Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So. 2d 1378 (Fla. 1993). In this malpractice action the Supreme Court of Florida observed:

In the area of will drafting, a limited exception to the strict privity requirement has been allowed where it can be demonstrated that the apparent intent of the client in engaging the services of the lawyer was to benefit a third-party. [Citations omitted.]

* * *

[W]e adhere to the rule that standing in legal malpractice actions is limited to those who can show that the testator’s intent as expressed in the will is frustrated by the negligence of the testator’s lawyer. 612 So. 2d at 1380. [Emphasis added.]

Kinney v. Shinholser, 663 So. 2d 643 (Fla. Dist. Ct. App. 1995). Applying Florida malpractice standards, the court here upheld the dismissal of a complaint against the lawyer who drew a will for a married client which did not preserve the tax benefit of the testator’s unified credit. The will gave the testator’s entire residuary estate to a trust for the benefit of his widow, over which she was given a general power of appointment. In effect, the will caused the widow’s estate to pay some estate tax that was avoidable had she not been given a general power of appointment. According to the court, there was no evidence of malpractice by the scrivener as the will did not indicate any intent to minimize taxes on the death of the surviving spouse. However, the court held that the complaint stated a cause of action by the decedent’s son, the remainderman under the husband’s will and the sole beneficiary of the wife’s will, against the lawyer and the accountant who were retained by the surviving spouse to probate the will and prepare the federal estate tax return for failing to advise her of the tax savings that would be achieved if she disclaimed the general power of appointment.

Murphy v. Fischer, 618 So.2d 238 (Fla. Ct. App. 1993). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Georgia:

Rhone v. Bolden, 608 S.E.2d 22 (Ga. Ct. App. 2004). Attorneys representing decedent’s estate and attorneys who represented decedent’s heirs in prosecuting wrongful death action have no fiduciary duty to an heir not included in the wrongful death action and, therefore, are not liable for legal malpractice in an action brought by the decedent’s father who was not included in the settlement of the wrongful death claim. The decedent’s father was clearly not the client of the attorneys prosecuting the wrongful death action. With respect to the duty of the lawyers for the administrator of the estate, the court observed:

[T]he existence of a duty by the administrator to the heirs [to marshal and manage the estate assets and then distribute them properly to the heirs] does not translate into a duty by the administrator’s lawyers to the heirs. While the estate may or may not ultimately pay the lawyer’s fee, the lawyer’s client is the administrator, not the estate.

Riser v. Livsey, 227 S.E.2d 88 (Ga. Ct. App. 1976). In this action for legal malpractice, the court assumed that a beneficiary under a will could bring an action for legal malpractice against the attorney-drafter; finding that the action sounded in contract, the court held that the action in question was barred by the applicable contract statute of limitations.

Hawaii:

Blair v. Ing, 21 P. 3d 452 (Haw. 2001). The beneficiaries of a trust brought legal malpractice action against the attorney who created the trust, alleging that attorney’s negligence in drafting the trust caused adverse tax consequences that diminished their inheritance. In a case of first impression for that state, the Hawaii Supreme Court held:

1) Non-client beneficiaries have standing in legal malpractice action under both contract and negligence theories. In a testator-attorney relationship, the attorney is retained for the specific benefit of the named beneficiaries, thus the attorney owes the non-client beneficiaries a duty of care; 2) even where the testamentary instrument is valid on its face, extrinsic evidence will be allowed in a legal malpractice action to prove the testator’s true intent; and 3) the statute of limitations for legal malpractice arising in the estate-planning context does not accrue at the time of drafting, but instead only begins to run when the plaintiff knew or reasonably should have known of the attorney’s negligence.

Idaho:

Harrigfeld v. Hancock, 90 P.3d 884, 888 (Idaho 2004). The Idaho Supreme Court adopted the rule set forth above in Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So. 2d 1378 (Fla. 1993), holding that a testator owed limited duties to the testator’s beneficiaries. The attorney owed a duty to include beneficiaries as requested by the testator and to have the instruments properly executed. The attorney did not owe any duty to individuals who believed they did not receive their fair share of the testator’s estate.

Illinois:

Jewish Hosp. v. Boatmen’s Nat’l Bank, 633 N.E.2d 1267 (Ill. App. 1994), appeal denied, 642 N.E.2d1282 (1994). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

McLane v. Russell, 546 N.E.2d 499 (Ill. 1989). This case holds that the beneficiaries under the decedent’s will were intended beneficiaries of the decedent’s attorney-client relationship with the will’s drafter and could therefore bring an action for legal malpractice.

Ogle v. Fuiten, 466 N.E.2d 224 (Ill. 1984). The Supreme Court of Illinois here held that the beneficiaries under an allegedly negligently drafted will could sue the drafter directly in legal malpractice both under traditional negligence theory and third-party beneficiary/breach of contract theory given the plaintiffs’allegations that, among other things, the testators’ purpose in employing the attorney was to draft the will not only for the benefit of the testators (plaintiffs’uncle and aunt) but for the benefit of the intended contingent beneficiaries.

Rutkoski v. Hollis, 600 N.E.2d 1284 (Ill. App. 1992). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Indiana:

Hermann v. Frey, 537 N.E.2d 529 (Ind. Ct. App. 1989). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Walker v. Lawson, 526 N.E.2d 968 (Ind. 1988). The Supreme Court of Indiana here held that an action will lie by a beneficiary under an allegedly negligently drafted will against the attorney-drafter based on a known third-party beneficiary/breach of contract theory.

Iowa:

Schmitz v. Crotty, 528 N.W.2d 112 (Iowa 1995). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Schreiner v. Scoville, 410 N.W.2d 679 (Iowa 1987). The Supreme Court of Iowa here held that the lawyer drafting a will owes a duty of care to the direct, intended and specifically identifiable beneficiaries of the testator-client and that such a beneficiary has an action for legal malpractice against the attorney with out regard to lack of privity.

Kansas:

Pizel v. Zuspann, 795 P.2d 42 (Kan. 1990), modified on other grounds and reh’g denied, 803 P.2d205, aff’d sub nom. Pizel v. Whalen, 845 P.2d 37 (Kan. 1993). The Supreme Court of Kansas here held that the lack of contractual privity between the potential beneficiaries under a testator’s will and the attorney-drafter did not bar the beneficiaries’ action for legal malpractice. The court applied the modified multifactor balancing test (first enunciated in Biakanja v. Irving, supra, ) in coming to this conclusion.

Kentucky:

Cave v. O’Bryan, No. 2002-CA-002601-MR, 2004 WL 869364 (Ky. Ct. App. 2004). An intended beneficiary of a will may maintain a malpractice action against the testator’s attorney alleging that the estate was not distributed according to the testator’s intent. After acknowledging that the “clear trend”among courts in other jurisdictions is to hold that estate beneficiaries are intended to benefit from the services rendered by attorneys to their testator-clients, the court held that an attorney owes a “duty of care to the direct, intended, and specifically identifiable beneficiaries of the estate planning client, notwithstanding a lack of privity.”

Louisiana:

Succession of Killingsworth, 270 So. 2d 196 (La. Ct. App. 1972), aff’d in part and rev’d in part, 292So. 2d 536 (La. 1973). In this case the court permitted a legal malpractice action by a beneficiary not in privity with the attorney who acted as the officiating notary for execution of a will, basing its decision on a state statute permitting damages arising from “every act whatever of man that causes damages to another obliges him by whose fault it happened to repair it.”

Woodfork v. Sanders, 248 So. 2d 419 (La. Ct. App. 1971), cert denied, 252 So. 2d 455 (La. 1971). In this case the court rejected an attorney-drafter’s privity defense in a legal malpractice action brought by a disappointed beneficiary and applied an intended third-party beneficiary/breach of contract theory.

Maryland:

Ferguson v. Cramer, 709 A.2d 1279 (Md. 1998). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Noble v. Bruce, 709 A.2d 1264 (Md. 1998). The Court of Appeals (Maryland’s highest court) held that a testamentary beneficiary, who is not a client of the drafting lawyer, may not maintain a malpractice action against the lawyer for allegedly providing negligent estate planning advice to the testator or negligently drafting the testator’s will in a manner which resulted in significant estate and inheritance taxes that could have been avoided, thus re-establishing the strict privity rule in Maryland.

Massachusetts:

Connecticut Junior Republic v. Doherty, 478 N.E.2d 735 (Mass. App. Ct. 1985), review denied, 482 N.E.2d 328 (Mass. 1985). In this case the court assumed that the attorney-drafter of a defective will could be held liable to the disappointed beneficiary but found no liability on the facts of this case since the testator had ratified the attorney’s error.

Spinner v. Nutt, 631 N.E.2d 542 (Mass. 1994). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Michigan:

Mieras v. DeBona, 550 N.W.2d 202 (Mich. 1996). The Supreme Court of Michigan here held that, although a beneficiary named in a will may bring a tort-based cause of action against the attorney who drafted the will for negligent breach of the standard of care owed to the beneficiary by reason of the beneficiary’s third party beneficiary status, the attorney could not be held liable to the testator’s heirs for negligence inasmuch as the will in question fulfilled the intent of the testator as expressed in the will. (The will did not exercise the testator’s power of appointment over her predeceased husband’s marital trust, thereby permitting the testator’s daughter, disinherited by the testator, to receive one-third of the assets held in the husband’s trust.)

Sorkowitz v. Lakritz, Wissbrun & Assoc., P.C., 683 N.W.2d 210 (Mich. Ct. App. 2004). Non-client estate beneficiaries may maintain a malpractice action against the attorneys who drafted estate planning documents on the ground that they rendered inadequate advice about tax consequences. The court departed from prior Michigan precedent (see Mieras v. DeBona, supra) and allowed the beneficiaries here to use extrinsic evidence to show that the attorney’s negligence in omitting a common tax savings clause from the estate planning documents had thwarted the testator’s intent.

Minnesota:

Goldberger v. Kaplan, Strangis & Kaplan, P.A., 534 N.W.2d 734 (Minn. Ct. App. 1995), review denied, 1995 Minn. LEXIS 859 (1995). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Marker v. Greenberg, 313 N.W.2d 4 (Minn. 1981). In this malpractice case the court applied the Biakanja, supra, multifactor balancing test in a case involving the alleged negligent drafting of a joint tenancy deed but found no liability since plaintiff failed to prove he was the direct and intended beneficiary of the lawyer’s services.

Witzman v. Gross, 148 F.3d 988 (8th Cir. 1998). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Missouri:

Donahue v. Shughart, Thomson & Kilroy, P.C., 900 S.W.2d 624 (Mo. 1995). In this malpractice case the Supreme Court of Missouri aligned Missouri’s law with the majority rule in holding that lack of privity was not a defense to an action for alleged malpractice in the drafting of a testamentary instrument.

Johnson v. Sandler, Balkin, Hellman & Weinstein, P.C., 958 S.W.2d 42 (Mo. Ct. App. 1997). Applying Missouri’s recently adopted “modified balancing test”as enunciated in Donahue, supra, the court directed the trial court on remand to determine whether or not the decedent, in employing the defendant estate planning attorney, intended to benefit the non-client/beneficiary. The court noted that the lawyer, who had prepared a total amendment and restatement of an existing trust instrument, could beheld responsible for the entire instrument’s contents even though large portions of the instrument were simply copied, verbatim, from the original trust document.

Montana:

Stanley L. and Carolyn M. Watkins Trust v. Lacosta, 92 P.3d 620 (Mont. 2004). The court ruled that it was a factual question, precluding summary judgment, whether non-client will and trust beneficiaries had standing to bring a legal malpractice action against the attorney who drafted the decedent’s estate planning documents. The court also ruled that the statute of limitations for bringing the action did not begin to run until a claim was brought that jeopardized the validity of the documents.

Estate of Watkins v. Hedman, Hileman & Lacosta, 91 P.3d 1264 (Mont. 2004). In a companion case to Stanley L. and Carolyn M. Watkins Trust v. Lacosta, supra, the court also held the statute of limitations period in a malpractice action brought by the estate of the attorney’s client against the attorney who negligently created an irrevocable, rather than revocable, trust. The court reasoned that the testator’s wife’s discovery of the negligence was delayed by the complexity of the trust documents and by the lawyer’s assurances to the wife that the documents carried out the testator’s wishes.

Nebraska:

Lilyhorn v. Dier, 335 N.W.2d 554 (Neb. 1983). The court here held that the beneficiary’s lack of privity with the attorney-drafter barred an action for negligence in the preparation of the will.

New Hampshire:

Simpson v. Calivas, 650 A.2d 318 (N.H. 1994). This decision reverses the dismissal of a malpractice action against the scrivener of a will, who was charged with failing to draft a will that expressed the decedent’s intent to leave all of his land to plaintiff. “We hold that where, as here, a client has contracted with an attorney to draft a will and the client has identified to whom he wishes his estate to pass, that identified beneficiary may enforce the terms of the contract as a third-party beneficiary.”650 A.2dat 323-324.

New Jersey:

Albright v. Burns, 503 A.2d 386 (N.J. Super. Ct. App. Div. 1986). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Barner v. Sheldon, 678 A.2d 717 (N.J. Super. Ct. App. Div. 1996). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Fitzgerald v. Linnus, 765 A.2d 251 (N.J. Super. Ct. App. Div. 2001). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Lovett v. Estate of Lovett, 593 A.2d 382 (N.J. Super. 1991). This case involved various charges of misconduct by a lawyer in connection with the preparation of a will, including a failure to meet with the husband-testator out of the presence of his second wife who would receive a share of his estate outright under the new will rather than in trust for her; a failure to counsel the client adequately with respect to tax matters; and a failure to obtain information regarding the husband’s assets. Although the charges were rejected by the court, it stated that, “[i]n most circumstances, meeting with a client alone would be well advised.”593 A.2d at 387. A failure to counsel the client in detail regarding the tax consequences was permissible because the client had indicated that he was not interested in them. In addition, the court observed that obtaining information regarding a client’s assets “in most cases, is important to the formulation of an adequate testamentary disposition.”593 A.2d at 387.

Rathblott v. Levin, 697 F. Supp. 817 (D.N.J. 1988). Here a federal court, applying New Jersey law, held that an attorney, whose alleged negligence in drafting a will caused the will’s beneficiary to deplete the estate’s assets in successfully defending a will contest, could be liable to the beneficiary for malpractice despite the lack of privity. In answer to the defendant lawyer’s argument that cases from the majority of jurisdictions finding liability for negligence in will drafting should not be extended to the facts of this case, where the beneficiary had successfully defended a contest to the will, the court observed:

[W]e are unable to see a valid legal difference between a plaintiff who loses the right to one-half of an estate and a plaintiff who loses one-half of an estate in protecting her rights. If either was caused by an attorney’s negligence in drafting, that attorney should be liable. 697 F. Supp at 820.

New Mexico:

Leyba v. Whitley, 907 P.2d 172 (N.M. 1995). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Wisdom v. Neal, 568 F. Supp. 4 (D.N.M. 1982). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

New York:

Baer v. Broder, 436 N.Y.S.2d 693 (Sup. Ct. 1981), aff’d on other grounds, 447 N.Y.S.2d 538 (App. Div. 1982). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Kramer v. Belfi, 482 N.Y.S.2d 898 (App. Div. 1984). This case is discussed in the Annotations following the ACTEC Commentary on MRPC1.2 .

Maneri v. Amodeo, 238 N.Y.S.2d 302 (Sup. Ct. 1963). The court here upheld the privity defense in an action for legal malpractice and specifically rejected the California approach.

Viscardi v. Lerner, 510 N.Y.S.2d 183 (App. Div. 1986). The court here described the privity rule as “firmly established” in New York and to be applied to bar actions for legal malpractice by non-clients absent fraud, collusion, malice or other “special circumstances.”

Weingarten v. Warren, 753 F. Supp. 491 (S.D.N.Y. 1990). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

North Carolina:

Jenkins v. Wheeler, 316 S.E.2d 354 (N.C. 1984), review denied, 321 S.E.2d 136 (N.C. 1984). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Ohio:

Elam v. Hyatt Legal Serv., 541 N.E.2d 616 (Ohio 1989). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Kutnick v. Fischer, 2004 WL 2251799 (Ohio Ct. App. 2004). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.14.

Lewis v. Star Bank, N.A., 630 N.E.2d 418 (Ohio Ct. App. 1993). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Simon v. Zipperstein, 512 N.E.2d 636 (Ohio 1987). Ohio is one of the minority of jurisdictions holding that lack of privity is a valid defense to a disappointed beneficiary’s action against a lawyer for negligent drafting of a will. However, see Elam v. Hyatt Legal Services, discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

Oklahoma:

Hesser v. Central Nat’l Bank, 956 P.2d 864 (Okla. 1998). Joining the majority of jurisdictions that permit a lawsuit for alleged negligent will drafting by a disappointed beneficiary, the court here applied the third-party/intended beneficiary contract theory to permit a suit for malpractice by the intended beneficiary of a will that the testator’s lawyer allegedly failed to have properly executed.

Oregon:

Hale v. Groce, 744 P.2d 1289 (Or. 1987). The court here held that a malpractice action for negligence in the drafting of a will sounds under both tort and contract theories.

Pennsylvania:

Gregg v. Lindsay, 649 A.2d 935 (Pa. Super. 1994), appeal denied, 661 A.2d 874 (Pa. 1995). This decision reversed a judgment entered on a jury verdict that the lawyer’s failure to see that a client’s will was executed constituted a breach of a third-party beneficiary contract. The lawyer prepared a new will on the same day that a friend of the decedent told the lawyer of the client’s wish to execute a new will that made the friend the principal beneficiary. When the lawyer took the will to the hospital for execution, the client said it was acceptable. However, as no witnesses were available, it was not signed. The lawyer agreed to change the name of a charitable beneficiary designated in the will and bring it back the following day for execution. The client was moved to another hospital, where he died the next day. The court stated:

To hold otherwise, under the circumstances of this case, would open the doors to mischief of the worst type. To permit a third person to call a lawyer and dictate the terms of a will to be drafted for a hospitalized client of the lawyer and to find therein a contract intended to benefit the third person caller, even though the will was never executed, would severely undermine the duty of loyalty owed by a lawyer to the client and would encourage fraudulent claims. 649A.2d at 940.

Guy v. Liederbach, 459 A.2d 744 (Pa. 1983). Criticizing California’s multifactor balancing test as too broad, the Supreme Court of Pennsylvania here applied a third-party beneficiary contract theory in permitting a suit by the intended beneficiaries of a negligently drafted will against the attorney-drafter. The court observed that the contract between the testator and attorney must be for the drafting of a will that clearly manifests the intent of the testator to benefit the legatees who are the intended beneficiaries of the contract and are named in the will.

Estate of Newhart, 22 Fid. Rep. 2d 383 [Montg. Cty (Pa.) 2002]. Scrivener has an obligation to record and retain information about the mental status of the client at the time he or she executes the will and also to properly oversee the execution of the will.

South Carolina:

Sims v. Hall, 592 S.E.2d 315 (S.C. Ct. App. 2003). This case is discussed in the Annotations following the ACTEC Commentary on MRPC 1.2.

South Dakota:

Friske v. Hogan, 698 N.W.2d 526 (S.D. 2005). South Dakota here joins the vast majority of states rejecting the rule that the lack of contractual privity between a testator’s lawyer and the beneficiaries bars an action for legal malpractice against the attorney. The court found that the privity rule does not apply where it can be shown that the nonclient was the direct, intended beneficiary of the lawyer’s services to the testator. The court cites favorably to the Restatement (Third) of the Law Governing Lawyers §51(3) (2000).

Persche v. Jones, 387 N.W.2d 32 (S.D. 1986). In this case a bank and its president who drafted and supervised the execution of wills and a codicil resulting in the documents’invalidity were held liable both in negligence and for the unauthorized practice of law.

Texas:

Barcelo v. Elliott, 923 S.W.2d 575 (Tex. 1996). The Supreme Court of Texas here reaffirms the application of the strict privity rule to bar an action for legal malpractice brought by the beneficiaries under an allegedly negligently drafted trust against the attorney-drafter. One of the dissenting Justices in this 4-3 decision noted: