Posts Tagged ‘lawyer’

Court Invalidates Will and Trust Naming Lawyer as Beneficiary

JULY 11, 2016 VOLUME 23 NUMBER 26
One principle governing lawyers is obviously and intuitively correct: A lawyer may not prepare a will or trust (or, for that matter, any other document or arrangement) by which a client makes any substantial gift to the lawyer. Similarly, lawyers are precluded from preparing documents giving or leaving anything of value to the lawyer’s close family members, either.

The American Bar Association, in its “Model Rules of Professional Conduct,” codified the principle. Rule 1.8(c) of the Model Rules says:

“A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, grandparent or other relative or individual with whom the lawyer or the client maintains a close, familial relationship.”

That rule has been adopted in 49 states, the District of Columbia and the U.S. Virgin Islands. Some of those jurisdictions may have modified the rule slightly, but the basic principle is pretty nearly universal. It also is clearly appropriate.

But lawyer ethics rules are not the same as laws, and it is not that hard to imagine that an ethically-challenged lawyer might be willing to violate the rule — if he or she could still inherit a substantial estate, it might not matter whether the license to practice law is revoked. Most court decisions dealing with lawyers who write themselves into wills (they are blessedly rare) recognize that the document itself should also be found to be invalid, at least to the extent of any gifts to the lawyer or his/her family.

You may have noticed that there is just one U.S. state which has not adopted the ABA’s Rule 1.8. In fact, California has not adopted any of the ABA’s Model Rules. What California has done, though, is to adopt an even stronger law. Under its law governing wills and trusts, any document prepared by anyone in a fiduciary relationship with the signer is presumed to be invalid — and the law is clear that lawyers are fiduciaries. In other words, California’s go-it-alone approach to this issue results in a stronger proscription than in most states.

That provision was put to the test last month in a case involving 74-year-old California lawyer John F. LeBouef, who was accused of having prepared (and possibly forged) a will and trust naming himself as principal beneficiary of a client’s $5 million estate.

LeBouef’s client, himself 73 years old at the time of his death, had been in poor health since the death (seven years before) of his life partner. The client was reported to have serious problems with alcohol, to the point that neighbors reported that he frequently would fall down in his home, howl like a dog, and occasionally soil himself.

The client had two nieces who were probably named as his principal beneficiaries in a will and trust he signed in 2006. “Probably” because, as it turns out, the original documents were lost — in a burglary of the client’s home after his death, in which his prior estate planning documents (and LeBouef’s laptop computer) were among the only items stolen. At trial, the probate court judge found LeBouef’s testimony about the burglary, the preparation of the new documents, and the client’s intentions all unbelievable.

Some part of the judge’s incredulity was related to LeBouef’s prior behavior. It developed that, after he helped an 86-year-old caretaker claim a $2.5 million inheritance from the estate of the man she had cared for, LeBouef’ marred his client (he would have been about 60 at the time) and, ultimately, inherited the bulk of her estate. Meanwhile, another, 90-year-old, client of LeBouef’s had left most of her $1.3 million estate to LeBouef’s life partner (and business partner), Mark Krajewski. LeBouef had prepared the four amendments to that client’s trust, of course.

After the California probate judge invalidated the will and trust naming LeBouef, she also ordered him to pay the client’s nieces over $1.2 million legal fees — those fees and costs were incurred in their successful challenge of the documents prepared by LeBouef. Perhaps the most impressive act of bravado, though, was LeBouef’s final request of the probate court: he asked the court to approve payment of a fee to him for acting as trustee during the litigation, including a separate fee for managing the trust’s real estate (including the decedent’s home, in which LeBouef lived for three years rent-free). The probate judge declined the request.

The California Court of Appeals reviewed the case and, in a strongly-worded decision, approved the probate court’s rulings on every score. In fact, the Court of Appeals directed that a copy of its decision should be sent to the State Bar of California and to the local prosecutor’s office. “We express no opinion on discipline and/or the decision to initiate criminal prosecution,” wrote the Court. Butler v. LeBouef, June 20, 2016.

Handling Your Own Legal Work — Without a Lawyer

OCTOBER 12, 2015 VOLUME 22 NUMBER 37

Last week we wrote about when you might reasonably represent yourself — that is, when you might not need a lawyer for your legal work. We suggested that what lawyers do is not precisely brain surgery, and that reasonably intelligent, informed and diligent non-lawyers might well be able to handle a number of legal tasks on their own. But which tasks, particularly?

You know you’re not going to get a lawyer to answer that question without a number of disclaimers and qualifications. Let’s be clear about what we have to say here: this advice will not apply to every individual, or in every state, or in circumstances that seem similar to what we describe. Treat this advice like the dangerous information it is: we’re not giving you blanket permission to represent yourself in a range of legal issues, and if things go wrong we don’t want you complaining that we told you it would be fine. We mean no such thing.

The default choice you should make in every legal issue is to talk to one of the people who know legal matters best. There is a name for those people: they are called lawyers.

Are you worried about cost? Start the conversation with the lawyer you consult by insisting on knowing how charges will be calculated and how you can stop the cost if it begins to overwhelm. Are you worried about getting information you don’t want to hear? Then you really, really need to talk with a lawyer. Are you worried about people finding out just how much trouble you’re in? Your conversations with the lawyer are almost always completely privileged — no one is going to hear about the fact that you consulted the lawyer, much less what you talked about.

All that said, we know how people are. You want to do it yourself. You want to save money. You want to figure it out, just like you did when you built your house without a contractor, or fixed your car without a mechanic. OK — are there some legal tasks that are safer for you to tackle than others? Yes, there are.

Wills

Can you write your own will? Yes. There are lots of forms out there, and you can use software to do much of the work. As between those two choices, by the way, we prefer software; it will take you down a branching decision tree, and will reduce the likelihood that you will make a mistake. But not eliminate it.

We are fond of recalling the client who brought us his father’s will. Dad had found a form for a will for a single person, and had just scribbled out the provisions about being single and written in mom’s name. Then he had adjusted the other provisions for the fact of mom being in his life. Problem was, the whole thing no longer made sense. Property did not pass the way dad almost certainly intended. Yes, he saved a couple bucks on legal fees — but the cost to his family was much, much higher.

That story being told, the reality is that most people will do just fine if they write their own wills. The key word in that sentence is “most” — some will foul up their estates, and fantastically (and expensively). That won’t be you, though — right?

By the way, if you use software or a form you are giving up on the opportunity to have a conversation with someone who knows what they are doing. Maybe you don’t need to make provisions for your home, if you take advantage of Arizona’s “beneficiary deed” provision. Or maybe that isn’t the right choice for you. Will the computer chat with you about that, or about your wishes for end-of-life care, or — stuff you can’t even think of?

Trusts

Just talk with a lawyer, please. The forms and books you read will oversell trusts, and the number of steps you need to take will complicate things beyond most people’s ability to figure it out on their own.

If you insist on preparing a trust without a lawyer, once again we prefer software to books and forms. But don’t think you can prepare the trust using software and save a couple bucks by taking the completed form to the lawyer to review — it takes us just a little bit longer to review your document than it does to interview you, figure out what you need, and then prepare the right document in a format we’re familiar with. In other words, it actually costs more.

Probate

Can you handle the probate of your mother’s estate without a lawyer? Probably. Do you and your sister get along well? Is your mother’s estate all in Arizona? Is the will clearly valid (or are the heirs easy to figure out)? If so, the probate may not be that complicated.

Don’t expect to just drop by the courthouse and talk with the judge, or the probate clerk. You can talk with someone in the clerk’s office, but they won’t give you forms or any legal advice. They will tell you to go to the local bar office (or someplace similar) to pick up the forms (you’ll likely pay a few dollars for that) and fill them out.

The process won’t be any faster without a lawyer — in fact, it’ll probably take longer. It will be frustrating and you’ll feel like you’re having to do things that you shouldn’t have to do. But you’ll likely get through it just fine.

Planning on fighting with your brother, or your stepfather? Talk to a lawyer before filing a single thing.

Guardianship

The share of guardianships filed without a lawyer increases every year. That’s mostly OK — the process is complicated, but at least there are a couple of lawyers involved in most guardianship proceedings even if you don’t hire one. The judge, for one, is a lawyer. The subject of the guardianship will have a lawyer appointed to represent them. You’ll get feedback from those lawyers, and from the clerks and others in the system, that will keep you from going horribly wrong. Probably.

One piece of advice: if the court clerk stops, look at you quizzically and suggests you might want to talk with a lawyer — go talk with a lawyer. That is a clear indication that something about your case is out of the ordinary. While the court staff can’t give you legal advice, they are pretty good at body language.

Guardianships of minor children are even easier for most people to take care of on their own. In fact, lawyers are involved (in Arizona — very different answers might apply in other jurisdictions) in a minority of minor guardianship proceedings. But if things get peculiar, or you get anxious about whether you’ve done things right, talk with a lawyer. You might not need to turn the guardianship petition over to them, but make sure you’re in the clear.

Conservatorships

When handling someone else’s money is involved, you need legal advice. We’ve watched people actually go to jail for things that they thought were just fine — the court’s view of the conservatorship is much more restrictive than the view of many family members. Don’t risk it.

Remember that a conservatorship necessarily means that there is money to manage, and that your legal fees can likely be paid from that money. It’s just a good investment.

[Did we mention that we only mean this to apply in Arizona? Let us repeat that — and observe that even the words “guardianship” and “conservatorship” can mean something else in other states.]

We hope this helps. We really do favor people handling their own affairs when they can, and most lawyers agree: we will help you figure out whether you can do this yourself.

When You Need to Talk With a Lawyer

OCTOBER 5, 2015 VOLUME 22 NUMBER 36

So often we field questions (on this website and in our practice) about whether people need to consult a lawyer. Unsurprisingly, perhaps, there is a terrific resistance to seeking legal advice. We lawyers don’t always help — our fees can be substantial, and unpredictable. We speak a language that sounds vaguely familiar but seems foreign to most people, and we often fail to translate — or even to recognize that our clients may not speak that language.

Too often lawyers treat the question dismissively. “Would you perform brain surgery on yourself?” we often ask. “Then why would you try to handle your own legal matter?”

That’s an unfair characterization. Legal help is seldom much like brain surgery. There are, of course, two big differences: brain surgery pretty much requires a patient who has been anesthetized, and it involves technical skills that are also unknown to most people, but also highly dangerous.

You can, in fact, handle most of your legal issues yourself. You are likely to do fairly well if you do, provided that you do plenty of research and have a basic understanding of the law before you start.

We don’t think most people should try to take care of their own legal matters, of course, and we’re not advocating it here. We just don’t want to terrorize you into hiring us. Instead, we want to convince you that legal representation is an expense worth incurring.

A better comparison might be with auto mechanics, or even plumbers. Can you change your own oil, or fix a leaky faucet? Of course you can. You will likely do just fine with either task. Similarly, you can probably find a health care power of attorney form online, fill it out and get it signed and witnessed. But there are some tasks — with your auto, with your plumbing, and with your legal affairs — better left to professionals.

So when do you need a lawyer? Of course it depends on your comfort level and time availability. I know how to change my car’s oil (it’s actually an electric car, but that’s a different story) but I choose not to do it. Why? Because I’d rather have it done professionally, and spend the extra time with my grandchildren, or finishing up the work I get paid for, or just raise a glass of wine instead. You might feel the same way about legal jobs — or you might not.

Before we leave the metaphor, let us make another observation: sometimes people who undertake their own auto maintenance (or plumbing, or legal work) mess it up. When that happens, the cost of fixing the problem may be well in excess of what it would have cost to turn the problem over to the professionals in the first place.

Some people take great pleasure in mastering disparate tasks for themselves. Others prefer to delegate when it makes good sense. When does it make sense in the legal world?

Complicated legal issues

Some things are harder to handle on your own, of course. You can figure out how to create a health care power of attorney, but are you as comfortable about your ability to create a living trust? Are you even sure you know whether you need a trust? How about funding of the trust? These issues are more complex than most simple documents.

High stakes

Your estate might be modest. Perhaps you own your house and a single bank account. Do you plan on leaving everything to your spouse, or to your only child? It’s hard to see how you will go very wrong by preparing your own will (though of course we have seen people who manage to do that). But if your estate is larger, or your family situation more complicated, you might benefit from getting legal advice.

Unusual legal problems

Do you need a guardianship or conservatorship for a family member who has become incapacitated? That’s a little out of the ordinary, and you will have a harder time finding help online or among your non-lawyer friends. Talk with a lawyer. Incidentally, the first thing the lawyer will probably do will be to explore alternatives to save you expense and legal complications. But that’s a point to be made later.

Why not hire a lawyer?

Most people are concerned about the likely cost of legal advice. Start your interview with a new lawyer by discussing fees. Will fees be flat or fixed? Or will they be hourly? If the latter, you have a harder time predicting the total fees (though they may ultimately be lower than flat fees). Ask the lawyer to honestly assess the likely total cost. Explore the possibility of setting a maximum fee, or terminating the representation if costs begin to escalate.

Interview more than one lawyer, but do it quickly. Make your first lawyer appointment and then immediately schedule a second (and maybe a third). Figure out which lawyer seems most responsive to your concerns, and most able to handle your legal problem. Ask friends and colleagues for their suggestions and for any experience they might have with your chosen lawyers.

Are you comfortable?

You might be talking with the best, the smartest, the most reasonably-priced lawyer in town. But if you don’t feel comfortable, the experience is not going to be positive. You should insist on getting calming assistance, and peace of mind — that’s a lawyer’s stock in trade.

[Next week: we’ll tackle which kinds of legal problems we most often see people foolishly trying to handle on their own.]

Getting Ready for Your Appointment With the Lawyer

JULY 20, 2015 VOLUME 22 NUMBER 26

It was really hard to find the right estate planning attorney, but you’re confident you’ve made a good choice (and we’re glad it’s us). You’ve made the first appointment — it’s set for two weeks from today. You’ve gotten the questionnaire from the lawyer’s office, and it looks a little daunting, but you’re determined to get this project done. What can you do to make the appointment more productive (and possibly make the entire experience less expensive)?

The first step might seem obvious, but we’re surprised how often new clients don’t do this: fill out the questionnaire. There’s a reason we’ve sent it to you. Having at least basic information (your name and date of birth, your children’s names, the rough outlines of your assets) speeds up the process immeasurably, and makes us think you’re serious about getting your estate planning done.

But, you ask, why should you have to fill out all that information when you haven’t even decided if you like the lawyer or want to pursue the project at all? For the same reason you have to give your doctor medical information, your dentist information about your teeth, and your financial planner information about your finances. It’s what we’re going to work with, and we know from experience that if you just dictate information to us in the first appointment you’ll forget some of it, we’ll write some of it down wrong, and the whole project will take longer, cost you more and have a higher likelihood of needing changes along the way.

What else can you do in advance? How about if you give a little thought to who you want to put in charge of your affairs? We generally ask you for at least four names: who will handle your finances, and who will handle your health care decisions — and who will be backup for both of those people? You might know perfectly well who you want for those jobs, but we’re surprised how many new clients haven’t really given these critical questions much thought. You don’t have to have final answers for our first meeting, but at least have some first reactions that we can work with.

Can you bring us some paperwork? Lawyers just love paper. We like to see a recent bank statement, and one from your brokerage account, and one from your retirement plan. We don’t worry too much about the precise value of any of those assets (we know those values have changed since your statement was issued) — we just want to see the rough value, the kinds of holdings, the account number and the name and address of your broker/banker/financial planner. That way if we end up creating a living trust for you, or adjusting your beneficiary designations, we have a running start on getting the information we need.

Lawyers do love paper, but we don’t need copies of everything. Your income tax returns are surprisingly unhelpful (though the listing of income sources might help you remember that small brokerage account you hardly ever deal with but haven’t gotten around to folding into your main account). If you own real estate in Arizona (remember — we’re writing this for an Arizona audience), we probably can get all the information about the real estate directly from the county recorder — besides, you’d be surprised how often people don’t actually have the most recent deed to their property at hand (and don’t panic if that’s you, since you don’t actually need a copy of your deed in Arizona).

What else can you do to prepare? Sketch out an informal list of personal property you want to leave to particular people. No need for you to make it official, or complete — it will be a discussion point for us to talk about. If you don’t have any particular items that go to special people, or you don’t get around to this project, don’t worry — it’s probably just not important to you, and that’s fine.

Here’s another item you can think about in advance: we’ll be talking with you about powers of attorney, and whether your agent (particularly the one you name to handle finances) should be given authority to act right away or only if you become incapacitated later. If you’re like most people, you likely default to not giving them authority unless someone can prove you’ve become incapacitated. But think about it: the primary reason we’re creating a power of attorney is to avoid the necessity of a formal, official declaration that you are incapacitated, and if you make your agent go through that process you necessarily put yourself through it, too.

We’ve seen an awful lot of people who really ought to be getting help from their chosen family members, but who aren’t easily categorized as “incapacitated.” We’ve seen many others who are incapacitated, but whose physicians won’t sign any documents to that effect. We’ve seen a few powers of attorney made ineffective by the need to go through a court process to secure a declaration of incapacity. We’ll want to talk with you about that, and it would be great if you’ve thought about it a little bit in advance.

Please read the letter we sent you. Not only does it have the date and time of your appointment (did you think it was a different day or time? Let us know — we can work out the differences), but also some instructions and a heads-up about our office process. It explains that we’ll be taking your picture, copying your driver’s license or identification card, and asking your family members to wait in the front office while we talk first with you alone. We’d like you not to be surprised by any of that.

Finally, here’s what we’d love to have you do in advance of your first estate planning appointment: relax. The process isn’t actually scary or overpowering or threatening. In fact, we think many of our clients actually enjoy the process, and learn a few things about themselves while going through it. Our staff is friendly, helpful and happy to answer your questions. You’ll be fine, regardless of how much preparation you’ve managed to work in before getting to our office.

Lessons From a Day in Probate Court

JULY 7, 2014 VOLUME 21 NUMBER 24

One day last week I found myself sitting in probate court, watching other cases get resolved while waiting for the Judge to get to my own cases. The matters I was listening to seemed to me to be instructive, and give me a chance to share some observations from the perspective of a veteran probate court participant.

In the almost forty years I’ve been practicing in probate court, some things have changed quite a bit. Others have not. One that has changed dramatically is the now-common practice of probate court litigants doing things themselves, without hiring a lawyer. That was almost unheard of in the 1970s, but is now commonplace. More than half of the cases I watched did not have a lawyer involved.

On top of that trend, Arizona has engaged in a decade-long experiment in certifying non-lawyers to prepare legal documents. The Arizona Certified Legal Document Preparer Program has been run by the Supreme Court since 2003, and there are more than 500 Certified Legal Document Preparers across the state. They have undergone a background check and passed a test — and they can prepare pleadings for probate, divorce and other actions, as well as wills (and even trusts). The key is that they are not supposed to practice law — they can help you fill out forms, but not be your lawyer. Other states (notably Washington) are following or considering a similar path.

Everyone knows that lawyers are expensive, that we complicate matters unnecessarily, that we are slow and unresponsive. Legal document preparers should alleviate those problems, right? That’s not exactly what I saw in my day in probate court. In two cases I think document preparers failed to serve their clients well. In a third, with no lawyer or document preparer involved, a little help would have made the litigants’ lives easier, I’m pretty sure.

Exhibit One: a simple probate (I’ve learned that “simple” is a dangerous word in this context, but let’s keep using it). It involved a decedent who left five children, a will and a house — and not much else. One son and a son-in-law were named as personal representatives in his will, and his son-in-law (as he explained to the court while I listened) took responsibility for getting the probate proceedings going. He contacted a document preparer to get him started.

The document preparer required a $1,200 fee up front, and promised to have the paperwork ready shortly. After months of trying to get back in touch with the document preparer, though, the son-in-law finally figured out that he was out of business — he had been charged with a felony (apparently unrelated to his business) and wasn’t going to be doing any more quasi-legal work for others. The new problem: the original will was somewhere in the document preparer’s files, and he was in prison.

Son-in-law explained that he had gone to a new document preparer, who had prepared a petition for probate of a copy of the now-missing will. That had cost another $650 up front, and required that the son and son-in-law attend a probate court hearing to explain why the original will was missing. The result: about $2,000 in initial costs (it wasn’t clear if more fees will be incurred), a wait of more than six months to get a simple probate started, and a confusing and frightening hour before a friendly but stern probate judge.

What would have happened if the son-in-law had visited a lawyer instead? It’s hard to say with certainty, but a best guess from the information revealed in court: the total cost would probably have been about $2,500-3,000 plus filing fees, the son and son-in-law would have had authority to sell the house in no more than five days, the lawyer probably would have waited to be paid from proceeds from sale of the house (so no one would have to write up-front checks), and the whole thing would almost certainly have been over in about four months. And that doesn’t consider the possibility that there might have been a summary proceeding available under Arizona law which would have saved a few dollars and several months of time. Oh, and no one would ever have had to appear in court, nervously or otherwise. Oh, and the son and son-in-law would have had the correct forms filled out, and wouldn’t have had to visit the County Bar Association office to get one more form the document preparer missed, consuming another hour of their day and causing more confusion and consternation.

You might think the problem was really just bad luck, that this hapless fellow chose his document preparer badly. After all, few document preparers end up in prison, and there’s nothing that keeps a given lawyer from going bad, either. True enough, though (a) most lawyers practice in groups, so if one lawyer in a firm drops out of sight there’s likely to be someone else to take responsibility, and (b) the document preparers do seem to have a high rate of discipline, with about 50 having their licenses suspended or revoked in the decade since creation of the listing. That looks like about a 10% rate of attrition, which seems higher than for lawyers.

Exhibit Two: In another case involving a document preparer but no lawyer, two women were involved in the life of a 14-year-old girl. The girl’s mother had gone to prison some years ago, and a family friend had adopted the 14-year-old and her four brothers and sisters. Now the 14-year-old had decided she wanted to live with her maternal grandmother, and so had just moved in. Grandmother had consulted a document preparer, and filed an emergency guardianship petition without giving notice to the adoptive mother. Last week’s hearing was the permanent guardianship proceeding, seeking to turn that emergency guardianship into a full guardianship.

The document preparer helpfully came to court with the grandmother, though of course he could not speak for her or even be acknowledged in the probate proceeding. He helped her get her documents together and prompted her about what to tell the Judge. The adoptive mother was also there, telling the Judge that she had no objection to the change in guardianship — she just wanted to make sure that everyone realized that she would no longer be responsible for the girl’s medical bills. The problem with that position: she is still responsible for her daughter’s medical bills — and there was no one available to explain that nuance to her (and the Judge, in his eagerness to get through a complicated and mildly contentious proceeding, didn’t help by reassuring her she was completely off the hook).

Would a lawyer have been more expensive? Almost certainly. Would the 14-year-old have been better served by having someone able to actually give legal advice in this complicated family situation? I’m pretty sure. Would the proceeding have been less stressful, less contentious and more suitable for the 14-year-old (who sat through the court proceeding, watching the tension and drama)? Darn straight.

Exhibit Three: a grandmother was seeking guardianship over her infant grandson. Her daughter lived with her, but had no job and no insurance; grandmother was just trying to get the baby on her own insurance plan. She did the paperwork herself, with no lawyer or document preparer. When she gave notice to the baby’s father, he showed up at the hearing and started talking about his pending petition to get custody, his desire to develop a relationship with the baby, and his lingering uncertainty about paternity. Grandmother got temporary guardianship, but the whole proceeding took a stressful hour and involved plenty of assertions and suspicion.

If grandmother had gotten the advice of a competent lawyer, she might have learned that it’s actually not that hard to get medical insurance for an infant, that she could have worked something out in writing with the putative father (and accelerated the process of figuring out whether he really is the father), and that her guardianship would be of little value (at least in Arizona) if the father’s status is confirmed. Maybe she would not have thought the lawyer’s advice was worth the money.

It was an interesting day. I came away with heart-felt sympathy for litigants who are frightened and confused by a, well, frightening and confusing system. I also appreciate the work of judges who have to explain legal principles to unrepresented litigants (without practicing law, of course) and try to help them navigate the system — all under the watchful eyes of other litigants and (sometimes) their lawyers, waiting for their own cases to be called. Finally, I remain convinced that lawyers have an important place in the legal system, and that even when we are under-appreciated we help people far more than they may be willing to concede.

Why Do I Need a Lawyer — Can’t I Write My Own Will?

OCTOBER 14, 2013 VOLUME 20 NUMBER 39

“My father hates, absolutely hates, lawyers,” a casual acquaintance tells us at a social gathering. “I know it’s a bad idea, but can’t he just write his own will?”

Let’s get the answer out of the way right up front: yes, he can. And there’s a very high likelihood he will do it just fine.

We can hear the faint and distant voices of thousands of other lawyers from across the country even as we write those words. “You wouldn’t do your own brain surgery, would you?” they ask. Or, more subtly: “go ahead, encourage everyone to write their own wills — lawyers’ children will go to much better colleges as a result.”

We’ll let that one sink in a moment.

Seriously: writing a will is not brain surgery. It doesn’t require anesthetic, and failure to do a good job doesn’t lead to instant death. For our money, there are much better comparisons. Would you build your own airplane (and then fly it)? Or maybe, more prosaically: are you comfortable doing your own business income taxes? In either of these two cases the project is detailed and complicated, and the negative results flowing from a mistake will not be immediately apparent. In both cases (and numerous others we might draw on) the possible negative repercussions could be far more costly than getting good professional help at the outset.

And yet thousands of people do build kit airplanes and fly them. Millions prepare their own tax returns. So can’t they prepare their own wills?

Yes, they can. There are forms and computer software to help. In our experience most people will do just fine with those kinds of assistance. The product may not be beautiful, but it can be perfectly functional.

Are we saying that you don’t need a lawyer to prepare a will? Absolutely not — there is simply no question that you are better off getting a lawyer’s advice about your estate planning. And the cost is amazingly inexpensive (it is easy to insist on that point after our visit last week to the dentist — her bill was more than we usually charge for estate planning consultations, and the visit was both shorter and more painful). Though you can prepare your own will, here are some of the reasons you should not:

  • We frequently see mistakes in do-it-yourself estate plans. We have seen wills that failed to name a personal representative (what used to be called an executor), and percentage divisions that didn’t add up to 100% of the estate, and attempts at legalese that probably reversed the writer’s actual intentions. We have seen innumerable wills that attempted to leave individual items to someone, even though beneficiary designations (which overrode the will) named someone else as recipient. We once probated a “will” written on the back of an envelope on the way to the airport — the writer, incidentally, didn’t die on that trip but five years later, with the envelope still the most recent signed document.
  • “Holographic” wills — handwritten, signed wills, which are very popular among the do-it-yourself crowd — are not valid in every state. Requirements vary. The result: a lot of self-prepared wills turn out not to be wills at all.
  • So far we have focused on wills — but should you be preparing a living trust? Do you need a Limited Liability Company established? Are there income tax considerations involved in your estate planning? Does your son need a special needs trust? How will you know, without talking with a lawyer? Well-written documents are important, but what your lawyer realizes (and you might not) is that the choice of document is often more important than the words and phrases in the document.
  • Similarly, it is usually not enough to just write a beautiful will (or trust, or power of attorney). Beneficiary designations, titles, and the relative values of your assets all are important considerations in your larger estate plan. And yes, the documents need to be well-written, too.
  • Your estate plan is not immutable. How long will your will, trust, power of attorney and beneficiary designations last? Well, they will “last” forever, or until you change them — but they will likely start being out-of-date within about five (perhaps as many as ten) years of being completed. So your self-help approach, leaving you slightly uncomfortable about whether you have done everything right, will need to be started all over in about five years.

We can go on, but perhaps our point has been made. You hire an attorney to handle your estate plan so that you can be sure the correct questions have been asked (and answered), not just to write elegant-but-wordy documents. What you get from your lawyer is, yes, good documents — but also an effective estate plan and more peace of mind.

A last word: many clients think it might save money if they prepare their own documents and then have a lawyer review them. That almost never works. The lawyer’s fees are largely based on collecting information, analyzing your situation and determining what ought to be done. Those steps have to be completed even if you prepare the documents yourself. And your lawyer probably will take longer to review your documents than to prepare her own, more familiar ones — and she will be less comfortable with the result, too. So the cost is likely to be the same or higher if you take homemade documents in for review.

Oh, and a last last word: when someone tells us that their father just hates lawyers, we have exactly the reaction you might imagine.

 

Will Rejected in Illinois but Approved by Indiana Courts

JANUARY 30, 2012 VOLUME 19 NUMBER 4
We are frequently surprised by how much trouble people cause for their families and heirs by not taking simple steps to properly plan for their estates. One thread that often recurs involves a fear (or perhaps disapproval) of lawyers, leading to failure to get good legal advice about planning, or about the execution of documents. This week we read about a different reaction, but with the same result. Florian T. Latek didn’t trust notaries.

Mr. Latek owned a small family farm in Indiana, but he lived (and owned real property) in Illinois. In 2009, with the help of a non-lawyer friend, he wrote a letter to the lawyer for a local charity he favored. The letter began “This is my will” and it proceeded to direct distribution of his entire estate to that charity and other recipients. Then he prepared four identical copies of the document, and signed each one.

Apparently Mr. Latek realized he should have the documents notarized, but he wrote that he did not trust notaries; instead, he included his Army serial number with the note that he hoped it would “be good for any legal matters.” Then he had some — but not all — of the copies witnessed by friends, and he secreted one copy (one that had no witnesses’ signatures) behind (not in) a small safe at the Indiana farm. Less than two months later, Mr. Latek died.

Probate proceedings were begun first in Illinois. The Illinois courts initially determined that Mr. Latek had no will; later, when the friend who had helped prepare the document got in touch with the charity named in the letters, the unwitnessed version was found at the farmhouse. When the charity’s lawyer attempted to introduce that will in the Illinois courts, it was initially rejected because it did not meet the Illinois requirements for a will to be valid. Later a copy with witnesses’ signatures was located, but the lawyer could not produce the witnesses to testify about the signing of the letter in the time given by the Illinois court to prove the validity of the will. The result: the Illinois property would pass according to the law of intestate succession, to Mr. Latek’s cousins (he had no children).

Meanwhile, the charity’s lawyer filed one of the letters with the Indiana courts for admission as Mr. Latek’s last will. If admitted, it would control the distribution of the family farm. The personal representative appointed in Illinois objected, arguing that Illinois had already decided that the will was invalid and the Indiana courts were bound by that finding.

The Indiana probate judge disagreed. The will was admitted to probate in Indiana, and the lawyer for the charity was appointed to administer Mr. Latek’s Indiana estate.

The personal representative appointed in Illinois appealed in Indiana. He argued that the U.S. Constitution requires each state to give “full faith and credit” to the rulings of sister states; once the Illinois courts had rejected Mr. Latek’s letter as a will, according to this argument, the Indiana courts were required to adopt the same ruling. The Indiana Court of Appeals, however, disagreed with that argument, and upheld the Indiana probate court’s admission of Mr. Latek’s letter as his last will. Matter of Latek, January 4, 2012.

What does Mr. Latek’s estate tell the rest of us? A number of things jump out:

  • It just makes sense to get help with setting up one’s estate plan. Assuming that it will all work out, that one’s Army serial number ought to prove one’s wishes, or that notaries are unreliable are not good ideas when dealing with the legal effect of documents. It is touching to note that Mr. Latek also told the charity’s lawyer that he should “tell the judge that we were classmates and do the very best you can,” but that just makes it harder to understand why he did not consult with a lawyer he obviously knew and trusted. Would the lawyer have charged him? Of course. But his wishes might have actually been carried out, rather than two different proceedings with two different results.
  • Mr. Latek looks like a classic example of the kind of person who ought to be considering a living trust. Rather than relying on two different probate courts to come to the same conclusion, he could have transferred both his Illinois real estate and his Indiana real estate — along with all his personal property — to a trust that would have been governed by the law of one state or the other. Would that have cost him something to set up? Yes. It would also have permitted his estate to be managed and distributed in a coherent and effective way, at (ultimately) lower cost than two separate probate proceedings in Illinois and Indiana. That would especially have proven to be true when the cost of one appellate case is factored in. If you own real property in two different states, you should particularly pay attention to the outcome for Mr. Latek’s estate.
  • State laws vary with regard to the formalities of wills. Some states require notarization OR two witnesses. Some states permit unwitnessed wills to be effective, provided that they are signed and in the signer’s handwriting. But here’s a piece of news for do-it-yourself fans: ALL U.S. states would treat a will as effective if it has both two witnesses and a notary. Yes, some states require the signer, the witnesses and the notary to all have been together at the signing — so it just makes sense to do it that way at a minimum.

 

Lawyer Suspended After Filing Guardianship Petition on Client

JUNE 22, 2009  VOLUME 16, NUMBER 45

A lawyer’s job is, of course, to help his or her client to accomplish the client’s goals. Sometimes, though, the client’s capacity may be diminished, and particularly in the elder law practice. What should the lawyer do when the client seems to be vulnerable to financial exploitation, or physical or emotional abuse? How far may the lawyer go to protect the client? When does the lawyer have a duty to take action?

The rules of ethics governing lawyers actually address the question. The American Bar Association has developed “Model Rules of Professional Responsibility,” which have been adopted (in some form) in nearly every state. One of those Model Rules, Rule 1.14, addresses how to deal with a client with diminished capacity. The central principle: a lawyer should strive to “maintain a normal client-lawyer relationship” with the client, despite the diminished capacity. The Rule specifically recognizes that sometimes it can even be necessary for the lawyer to initiate some sort of protective action — possibly including a guardianship or conservatorship proceeding.

Stephen Eugster, a Spokane, Washington, lawyer, thought he faced that question. An elderly widow had consulted him about the estate plan she and her husband had set up before the husband’s death. Although the plan gave considerable control to her son, the widow no longer trusted the son to handle her finances. She wanted to remove him as her agent and trustee, and try to make him return assets she thought had improperly been transferred into his control.

Mr. Eugster prepared new documents naming himself as agent and trustee, and had his client sign them. Then he approached the son about getting further information and transfer of assets. As it happened, the son was also a former client of Mr. Eugster’s.

After a brief inquiry Mr. Eugster decided that his client’s son was acting properly. He wrote to his client, suggesting that she should be willing to trust her son and let him once again take responsibility for all her finances. She responded by seeking advice from a different lawyer, and her new attorney sent Mr. Eugster a letter dismissing him and revoking his authority under powers of attorney and the trust.

That apparently set off Mr. Eugster’s alarm bells. He was convinced, he said later, that his client must not have been competent, and that the new lawyer and her new trustee must have exercised undue influence over her. Without consulting or even visiting her, he filed a petition seeking appointment of her son as her guardian.

Several months, one professional mental evaluation and $13,500 later, the client conclusively established that she was competent and acting on her own initiative. The guardianship petition was dismissed. The client, however, complained to the Washington State Bar Association.

After a lengthy investigation and hearing process the Disciplinary Board of the Bar recommended that Mr. Eugster should be disbarred. The Washington Supreme Court, in a 5-4 vote, softened the punishment to an 18-month suspension and an order that he repay the legal fees his former client incurred to defend the guardianship. Disciplinary Proceeding Against Eugster, June 11, 2009.

Mr. Eugster had argued that Rule 1.14 recognized that he might have an obligation to actually file the guardianship petition, and that he truly believed that his client was at risk. The Disciplinary Board pointed out that Mr. Eugster had not actually made an investigation to determine whether his client’s capacity had slipped since had last seen her several months before, and that in any event his Petition revealed extensive information obtained from his client during the representation. The Court agreed with the Bar that Mr. Eugster had violated his ethical duties in a number of ways, including acting against his client’s interest, seeking a resolution that ran counter to the purpose for which she had retained him, and disclosure of client confidences.

Four Justices dissented from the Supreme Court’s opinion. All four of them would have imposed permanent disbarment rather than the 18-month suspension of Mr. Eugster’s law license.

What might Mr. Eugster have done if he did think he needed to “protect” his client? The ABA’s Rule 1.14 actually provides several suggestions, none of which Mr. Eugster seems to have considered. As part of the Rules, the Bar offers detailed Comments that lawyers can look to when trying to resolve ethical dilemmas. Comment [5] to Rule 1.14 gives some useful guidance to lawyers who may be concerned about a client’s vulnerability. The basic idea behind the comment: a guardianship petition, while permitted, should be the last resort, after consultations with other professionals, family members, state protective services and other individuals or groups. Always the lawyer should keep in mind the client’s wishes, values, best interests and goals .

Ironically, the lawyer who took over Mr. Eugster’s client seems to have reviewed Rule 1.14 and the Comments — and acted accordingly. One of the suggestions made by the Comment is that the lawyer might seek out appropriate professional services and use powers of attorney and other protective arrangements short of court action. The new lawyer’s approach followed those suggestions perfectly: he had the client sign a new trust and powers of attorney, naming a professional fiduciary to manage her affairs. That allowed the client’s interests to be protected without compromising her desire not to extend her son’s authority over her personal or financial affairs.

Lawyer Who Drafted Contested Will Sued After Case Settles

NOVEMBER 27, 2006  VOLUME 14, NUMBER 22

Laura Carnese had suffered a stroke, and (as it turned out) had only a few weeks to live. A friend and relative by marriage, Charles Carnese, happened to be a lawyer; he arranged for a former associate, attorney Anthony J. Barker, to visit with Ms. Carnese and help her prepare a new will. The will prepared by Mr. Barker was signed just weeks before Ms. Carnese’s death in November, 1999.

Ms. Carnese’s will was admitted to probate, but her heirs challenged its validity. Their case was settled, but the estate paid them a total of about $620,000; the distributions to the beneficiaries named in her will were correspondingly reduced.

Two of those beneficiaries sued Mr. Barker, alleging that the will challenge was his fault. They argued that he had made an implied promise to Ms. Carnese to prepare a will which would be invulnerable to any legal challenge, and that they were the intended beneficiaries of that promise. Among the errors they alleged he had committed were his failure to:

  • ask Ms. Carnese why she had decided to distribute her assets as she had, so that he could testify about her wishes at any later trial.
  • tell Ms. Carnese that his relationship with her relative (and beneficiary) could result in his independence being challenged.
  • urge Ms. Carnese to seek counsel from a truly independent attorney.
  • interview his client before learning about her alleged wishes from Mr. Carnese, his colleague.
  • investigate Ms. Carnese’s physical, mental and emotional status at the time she signed the will.
  • make a video or audio recording of his interview with Ms. Carnese.

The trial judge dismissed the lawsuit after finding that Mr. Barker did not owe any duty to the devisees to make the will invulnerable to challenge. The Oregon Court of Appeals disagreed, and reinstated the case. According to the appellate court, Mr. Barker did owe the will beneficiaries a duty to follow any promise he had made for their benefit, and the preparation of estate planning documents necessarily implies a promise to “act in a professionally competent manner.”

The Oregon Supreme Court, however, disagreed with the state’s intermediate appellate court. The high court ruled that there was no evidence that Mr. Barker made specific promises to Ms. Carnese about preparation of her will. According to the Justices, the law should not impute an agreement to prepare a will that is “invulnerable to a will contest so as to achieve [Ms. Carnese’s] plan to maximize gifts to residuary beneficiaries.” The trial judge’s dismissal of the lawsuit against Mr. Barker was affirmed. Caba v. Barker, October 19, 2006.

Attorney Prepares Will Leaving Client’s Estate to His Daughter

APRIL 24, 2006  VOLUME 13, NUMBER 43

Sarah Ann Ester Straw went to her lawyer, N. Frank Lanocha, to have a will prepared. According to Mr. Lanocha, she wanted to leave the bulk of her estate to the lawyer’s daughter, Teresa Lanocha-Sisson. He prepared a will that did exactly that—in fact, it left $1,000 to Mr. Lanocha’s wife Teresa W. Lanocha, $2,000 to area charity Chimes, Inc., and the balance of the estate to Mr. Lanocha’s daughter.

There is a well-recognized ethical rule, however, that prohibits lawyers from writing themselves or family members into wills. There is an exception when the will is being prepared for a family member of the lawyer, but Ms. Straw had no familial relationship with Mr. Lanocha, his wife or daughter. There is a second exception for bequests that are not “substantial,” but the will Mr. Lanocha prepared clearly did not fit within that exception.

When Ms. Straw died and her will was submitted to probate, the judge assigned to the case was troubled by Mr. Lanocha’s conduct. A complaint to the Attorney Grievance Commission initiated a proceeding seeking to discipline Mr. Lanocha.

The Maryland Court of Appeals (the state’s highest court—equivalent to the Supreme Court of most other states) ultimately agreed that Mr. Lanocha had behaved improperly. The only sanction for his misbehavior, however, was a public reprimand—Mr. Lanocha’s ability to continue practicing law was not affected, and his daughter was not required to give up her claim to Ms. Straw’s estate.

Four of the seven judges agreed that Mr. Lanocha should be let off lightly. They believed his insistence that he had never heard of the rule prohibiting lawyers from writing themselves or family members into wills—though two other Maryland lawyers had been suspended from the practice of law indefinitely for naming themselves as beneficiaries as recently as 2003. Besides, reasoned the court majority, Mr. Lanocha had told Ms. Straw that she needed independent legal advice before leaving anything to his family, and she had insisted that he prepare the will anyway.

Judge Alan Wilner, one of the seven judges deciding Mr. Lanocha’s fate, would have gone further. He noted that no one had asked Ms. Lanocha-Sisson if she would be willing to disavow any inheritance; he suggested that without that sanction Mr. Lanocha should be indefinitely suspended. Judges Dale Cathell and Lynne Battaglia would have suspended Mr. Lanocha from the practice of law regardless of whether his daughter declined the inheritance.

Mr. Lanocha had a prior record of sorts, having been reprimanded for other violations in 2001. He had also been challenged by the Federal Trade Commission for violation of Fair Debt Collection Practices Act provisions in 1996, and ordered to pay $50,000 in penalties.

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