As a trusts and estates attorney, you may have to handle highly sensitive and personal matters regularly.
While that may be both intellectually and professionally stimulating, it could also make you more susceptible to malpractice claims by disgruntled clients and even some third parties.
In its latest four-year review of legal malpractice claims across the industry, the American Bar Association found that estate, trust, and probate ranked fourth in the
top ten practice areas for claims frequency in 2015–2019.
Luckily, you may be able to minimize your exposure to potential malpractice claims with the tips provided below.
3 Cautionary Tales from the Trusts and Estates Attorney Playbook
To better illustrate the tips in the next section, it may be helpful to consider the following scenarios. These derive from real-life claims and showcase some common challenges that trusts and estates attorneys may face in the course of their work.
The Pitfalls of Representing Family Members
In this case, an attorney’s aunt sued him both individually and as a trustee. She alleged that her nephew had manipulated his elderly uncle into changing his estate plan on his deathbed. As a result, the attorney and his children got a much larger distribution of the estate than the aunt.
According to the original trust, the attorney would have received around 10% of the estate, with the balance going to his aunt. However, while his uncle was dying of congenital heart failure in a hospital, his caretaker called the attorney and told him the uncle wanted to change his will. Note that the attorney was not his uncle’s regular lawyer.
The following day, the attorney helped his uncle prepare a handwritten will, which only left 10% of the estate to his wife. The attorney then instructed his uncle’s regular lawyer of the changes to the trust.
After the uncle passed away, the aunt filed a lawsuit seeking to rescind the trust and void the gift to the attorney on the grounds of her late husband’s lack of capacity.
Non-Clients May Be Able to File Malpractice Claims, Too
In this matter, the attorney in question represented the son and the caretaker of a decedent in connection to amending his trust.
Prior to the amendment, the original trust distributed the residue of the estate as follows:
- 30% to a religious community center
- 20% to the decedent’s son
The son and an affiliate of the religious center were trustee and successor trustee, respectively.
The religious center alleged that the decedent’s physical and mental health had severely deteriorated over the last two years prior to his death, restricting his ability to protect his interests.
Near the end of that two-year period, the attorney amended the trust at the caretaker’s request, leaving the entire residue of the estate to the caretaker and designating her as successor trustee.
After the decedent’s death, the religious center sought to invalidate the amendment on the basis that the attorney had failed to:
- Communicate with the decedent
- Attempt to confirm his capacity
- Receive consent to accept instructions of a beneficiary of the trust
According to the religious center, this amounted to elder abuse and wrongful taking.
Approach Beneficiaries with Caution
In this case, an attorney prepared a new last will and testament for a client. The client’s daughter subsequently challenged the probate of the will, which had disinherited her, and sought to admit a prior will.
She asserted that the attorney hindered the formation of the will when he failed to inquire as to why the client disinherited his daughter nor assess whether there was any undue influence. This was despite the fact that the attorney had allowed beneficiaries to be present as the client advised him of her testamentary intentions.
But there is more. The prior will had designated an executor to manage the distribution of the estate. This executor subsequently filed a third-party action against the attorney demanding unspecified actual damages and attorney’s fees.
Tips to Help Avoid Malpractice Claims for Trusts and Estates Lawyers
The scenarios above – which are far from rare – may help distill a few tips to avoid being the target of malpractice claims.
1. Stay Away from Representing Family Members
To avoid situations like the one in the first scenario, you should learn to identify potential conflicts of interest and refuse to draft the will or otherwise represent a family member.
This may be even more critical if you are also a beneficiary under the will or trust. In such cases, you are under an ethical obligation to direct your family member or client to independent counsel.
2. Understand That the Requirement of Privity May Have Changed
Traditionally, the liability of trusts and estates attorneys used to be predicated on privity with the client. However, this requirement has now largely eroded in many jurisdictions across the country, paving the way for potential claims from non-clients such as heirs or beneficiaries. This may be something you want to keep in mind when dealing with interested third parties.
3. Know the Exceptions to Statutes of Limitations
Most jurisdictions have specific statute of limitations periods for bringing a legal malpractice claim. That said, many have exceptions that apply specifically to trusts and estates lawyers. These exceptions will typically extend the statute of limitations when the injury resulting from the alleged attorney error or omission does not occur until the death of the client.
4. Consider the Interests of Non-Clients
The lawyers in the second and third scenarios appeared to be acting on behalf of the best interests of their clients. However, they should have also considered the interests of other parties.
While the general rule is that you owe a duty of care only to your clients, many states have weakened the privity requirement. As a result, in certain limited circumstances, a non-client may now file a malpractice claim if they can demonstrate that the primary purpose of the legal relationship was for their benefit.
5. Be Crystal Clear About the Scope of Representation
To avoid potential misunderstandings and protect yourself from liability, your
engagement letters should state clearly the person(s) you represent and the scope of that representation. It may also be a good idea to state that you are representing those persons only and not any other individuals or entities. You should also consider explicitly alerting non-clients that you are
not representing their interests.
Ultimately, Some Malpractice Claims May Be Unavoidable
Despite your efforts, mistakes and omissions may still happen. For more tips on how to keep these to a minimum and avoid malpractice claims, you may want to read some of our other
risk management articles.
Contributions by Scott R. Schaffer of Wilson Elser Moskowitz Edelman & Dicker, LLP.
This article is provided for general informational purposes only and is not intended to provide individualized advice.