Where There’s a Will, There’s a Way…? Ethical Pitfalls in Preparing & Administering Wills

Current Issue, NYLER Archive, NYPRR Archive, Uncategorized

By Jeremy R. Feinberg

[Originally published in NYPRR March 2008]

If you ask anyone to identify services that lawyers provide for their clients, inevitably, one answer you will hear is “prepare wills.” Indeed, many law students, and even full-fledged attorneys in other practice areas than trusts and estates, have reason to expect friends and family members to approach them, and, not realizing the complexities and expertise involved in proper drafting, to ask them to assist in the preparation of these important documents. Of course, will preparation is not easy, even if it is a simpler concept for non-lawyers to understand, than, say, preparation of a partnership tax return, a summary judgment brief, or a Hart-Scott-Rodino filing. The same can be said of the lawyer’s role in advising executors of an estate after a client whose will the lawyer drafted has died.

This seeming simplicity does not mean, however, that will preparation or the administration of an estate is without its ethical pitfalls. Bar association ethics committees have addressed issues that may arise in a trusts and estates practitioner’s day-to-day practice. With the hope of collecting some of this learning in one place (there are far more opinions on trusts and estates ethics issues than even two or three articles could address), this article will discuss the following: (a) what a lawyer must do with wills in his possession (i) upon the death of a client in the absence of an advance agreement, and (ii) when he retires or his law firm dissolves; (b) what a lawyer must do when, despite instructions from a client, the lawyer has reason to believe that the client is no longer competent to make the decision regarding return of the client’s will; and (c) what, if anything, a lawyer must do to inform creditors who may have claims against a client’s estate, that the estate has assets and that they may file a claim.

Duties of a Lawyer Possessing a Client’s Will

In 1999, the New York State Bar Association’s Committee on Professional Ethics (Committee) offered advice on the lawyer’s obligations as to a will in the lawyer’s custody, in the absence of a specific agreement between lawyer and client. Examining that question in Opinion 724, the Committee noted that a lawyer is under no obligation to hold the client’s original will, and may provide the original will to the client, together with appropriate instructions for its safekeeping. Indeed, the Committee recognized that as more and more clients have expressed confidence in safeguarding wills themselves, the custom of having a lawyer hold onto the original will has become less common. [NYSBA Op. 724 (1999).]

The Committee also opined that many of a lawyer’s additional obligations involving the will are likely to be contractual or quasi-contractual in nature. For example, the attorney and client could agree that the lawyer will read death notices and, upon learning of the client’s death, take appropriate action to file the will with a court. [Id.] The Committee concluded, however, that even in the absence of an express contract, a lawyer who maintains the client’s original will, and who is not aware of a superseding document, is under the implied obligation to alert the executor and/or beneficiaries to the existence of the will. [Id.] In this particular instance, because the lawyer was acting under implied, if not explicit, authorization from the client, sharing the will with these persons would not violate the lawyer’s duty of confidentiality to the now-deceased client. [Id.] (The Committee cautioned here, in a footnote, that because of the additional business this may generate for the lawyer, the lawyer must be particularly mindful of the Code of Professional Responsibility’s limitations on solicitation. [Id. N.4].

The Committee drew the line, however, at the obligation to notify the executor and/or beneficiaries of the will, refusing to create further obligations for the lawyer if the deceased client did not provide (or the attorney and client did not agree in advance on) specific directives for the lawyer. The Committee stated:

The lawyer has no ethical obligation to agree to read death notices, see Massachusetts Op. 76-7 (a lawyer “need not watch the obituary columns”), or to agree to file the original will with the court; the client may have good reason not to ask the lawyer to assume such obligations; and the lawyer generally has no ethical obligation later to undertake responsibilities vis-à-vis the original will in addition to those on which the lawyer and client agree and those imposed by law.

The Committee urged, however, that lawyers should discuss these issues with their clients rather than ignore them, leaving them unresolved. Encouraging the discussion would create the dual benefit of allowing the client to make an informed decision about whether the lawyer should retain possession of the will and thereby reduce the risk of misunderstanding, and of preventing failure on the lawyer ’s part to undertake a responsibility that the client had expected. [Id.]

When Client Outlives Lawyer’s Practice or Firm

Logically, one of the ethics questions a trust and estates lawyer might ask is “What do I do with the wills entrusted to my safekeeping when I decide to retire from the practice of law?” Similar questions will arise if a practitioner’s law firm is about to dissolve and cease operations, and as a result, the practitioner must provide for the handling and/or storage of the testamentary documents in the files of the soon-to-be-dissolved law firm. (For ease of reference, I will refer to lawyers in the two situations collectively as “a retiring lawyer.”) The Committee on Professional and Judicial ethics of the New York City Bar Association’s (the New York City Bar) spoke to these related topics in its Opinion 1999-05.

In that opinion, the New York City Bar began with the proposition that a retiring lawyer may notify a client of the impending change in the lawyer’s practice status, and request instructions for disposition of the will. [ABCNY Eth. Op. 1999-05, citing NYSBA Op. 460 (1977).] If the retiring lawyer seeks to return a client’s original will, the lawyer should make reasonable efforts to locate the client and/or her representatives, to notify them of the lawyer’s pending change in status, and to request instructions for disposition of the will in the lawyer’s possession. [Id.] The New York City Bar recognized, however, that there will be occasions when the client cannot be located, and that the Code of Professional Responsibility does not specifically provide for return of a missing client’s will. The Opinion cited and contrasted DR 9-102(F), which enunciates a lawyer’s duty to pay a client’s money to the Lawyer’s Fund for Client Protection when a client cannot be located.

Examining the guidance of ethics committees from other jurisdictions, the New York City Bar concluded that the lawyer ’s duty to retain wills of missing clients “continues indefinitely” and that “the lawyer — whether the original drafter, the lawyer ’s firm, or a successor lawyer or firm — must keep the original Will of a missing testator secure, comply with any obligations of law regarding the original Will, or, if appropriate, employ procedures provided by law to deposit the Will with the court.” [Id.] (The opinion thus flagged, but did not opine on, the legal question of whether a lawyer in this situation could file the will with a court, and, if so, what requirements for doing so might exist. [Id.])

Elaborating on this guidance, the New York City Bar further stated that “[u]pon retirement or dissolution, then, the lawyer should index the Wills of missing clients and place them in storage or turn them over to a successor lawyer who is assuming control of the lawyer ’s or firm’s active files, while preserving the confidences and secrets of the testator/client.” [Id., citing ABA Formal Op. 92-369; DR 4-101; DR 2-111[b]]. Here, the opinion quoted the Nassau County Bar Association’s Opinion 89-43, for the important proposition that any burden on the successor lawyer to maintain these documents was more than outweighed by the public good because “the burdens of custody as prescribed by the Code are inherent in the lawyer’s enjoyment of his professional status, and his concomitant obligations to the public generally.” [ABCNY Eth. Op. 1999-05, citing Nassau County Bar Op. 89-43 (1989).]

Addressing Requests from Incapacitated, or Potentially Incapacitated, Clients

Missing clients are not the only potential source of ethics issues for the trust and estates practitioner. In Opinion775, the New York State Bar addressed whether a lawyer has any latitude to investigate, or even countermand, the instructions of a former client who seeks return of an original will, when the lawyer has reason to believe that the client might be incapacitated, under undue influence, or otherwise unable to make decisions relevant to disposition of the client’s will. The Committee presented the following facts:

A lawyer drafted a will for an elderly client and maintained the original will for safekeeping. Some time later, the former client signed a letter, evidently prepared by someone else, requesting return of the original will. The lawyer has reason to believe that the former client is not competent and may be acting under the influence of a family member who would benefit if the will is destroyed and the former client’s estate passes through intestacy.

Starting with a proposition articulated in Opinion 724 (supra), the Committee noted that ordinarily, a lawyer should return an original will to a client upon request. [NYSBA Op. 775, citing NYSBA Op. 724]. The Committee concluded, however, that neither this general guidance, nor any provision of the Code of Professional Responsibility, prevents a lawyer from making further inquiry, particularly in circumstances where the lawyer has a legitimate reason to believe that the client may be suffering from diminished capacity or undue influence. The Committee specifically examined the “no contact” rule of DR 7-104 and held it to be inapplicable in these circumstances: “[t]hat rule generally forbids a lawyer communicating with a represented party in the course of representing another client. Under the facts cited above, a lawyer’s communications with a former client whose will the lawyer is safeguarding would clearly not occur during the course of representation of another client.” [NYSBA Op. 775.] (Parenthetically, the Committee also made clear that DR 2-103 and its anti-solicitation rule are not relevant as they do not apply to a lawyer’s current or former clients.) [NYSBA Op. 775.]

The Committee concluded the opinion by suggesting that if after further inquiry, the lawyer retained doubts about the client’s capacity, the lawyer could ethically seek judicial guidance as to what to do with the will. In support of its proposition, the Committee cited recent opinions addressing matters ranging from a lawyer’s ability to seek appointment of a guardian for a client without the client’s consent, to requesting a court order to dispose of settlement proceeds or escrow accounts where the relevant agreements were silent. [Id., citing NYSBA Op. 746 (2001); NYSBA 717 (1999); NYSBA 710 (1998).] To be sure, this approach (i.e., seeking judicial guidance) could apply to a lawyer unsure as to what to do with a will when the lawyer had never discussed the matter with the client (see above).

What Must a Lawyer Disclose to Third-Party Creditors?

In one of the most recent, as well as most complex, issues involving trust and estates practitioners, the New York State Bar examined whether a lawyer must correct a possible misunderstanding of fact on the part of a creditor of the estate when the lawyer was serving as the administrator’s attorney. In Opinion 796, the Committee faced a scenario in which the decedent had defaulted in litigation, thereby establishing liability, but leaving undetermined the amount of damages at the decedent’s death. When the administrator’s lawyer learned of the litigation, the lawyer informed the plaintiff’s attorney that the decedent had died and that the matter had been stayed. Plaintiff’s attorney did not respond to this notification, or send any other communication to the administrator’s lawyer. [NYSBA Op. 796 (2006).]

Thereafter, the facts only became more complicated for the administrator’s lawyer. Indeed, approximately a year later, the lawyer learned that plaintiff’s attorney had informed the court handling the litigation that the plaintiff’s attorney was closing the file on the case and that the court could close its file as well. In correspondence with the court, plaintiff’s counsel correctly noted that the defendant (decedent) had died, but incorrectly stated that there was no estate proceeding pending. The Committee noted, in concluding its factual recitation that “a search of the Surrogate’s Court records would have revealed that a petition had been filed for letters of administration, which petition noted the value of the estate and that the letters had been issued.” [Id.]

As a result, the Committee was faced with the question: must the administrator’s lawyer correct the misimpression on the part of the plaintiff’s attorney that no proceedings were pending, thereby suggesting to that lawyer that there was a viable claim against the estate? The Committee assumed that there were no legal obligations requiring disclosure and/or clarification to the plaintiff’s lawyer or other potential creditors. It then concluded that there were no ethical obligations to do so, either. [Id.]

The Committee analyzed the administrator’s lawyer ’s duties against the backdrop of DR 7-102(A)(5) which prohibits a lawyer from “[k]nowingly mak[ing] a false statement of law or fact.” The Committee concluded that there had been no violation of this rule, apparently finding it significant that the lawyer had, in asserting that the claim had been stayed pending issuance of letters of administration, conveyed (at least implicitly) that there were estate assets against which plaintiff could assert a claim. [Id.] The fact that the attorney for plaintiff either chose not to assert a claim, or did not exercise a sufficient level of diligence in investigating decedent’s estate, did not change the analysis. Thus, the administrator’s lawyer had no ethical obligation to notify that plaintiff’s attorney, or any other creditor, in the circumstances presented. [Id.]

The Committee did not, however, address the more interesting question: could the lawyer have nonetheless notified plaintiff’s counsel, even though the ethics rules did not require it? The New York City Bar has addressed the issue of voluntary testimony by a lawyer concerning a former client — perhaps suggesting the correct analysis here. In general, New York City Bar Opinion 2005-3 opines that the lawyer may voluntarily testify concerning a client if the substance of the testimony would not reveal a confidence or a secret, or if one of the recognized exceptions (see DR 4-101[c]) to the lawyer ’s duty to maintain confidences and secrets exists. [ABCNY Eth. Op. 2005-3.] Moreover, if the information the lawyer would share is a confidence or a secret, and not subject to one of the exceptions to the general rule, then the lawyer needs to obtain the client’s consent if he wishes to testify. [Id.]

Although not privileged, and therefore not a confidence, the information concerning the existence of the estate’s assets might well be (or have been) a secret. The New York City Bar defined a “secret,” in this context, as information learned of during the course of the lawyer’s representation that, although not privileged, would be detrimental to the client’s interests, if revealed. [ABCNY Eth. Op. 2005-3.] The Opinion noted that a secret does not lose its status merely because others learn of it. Indeed, only when the secret becomes “generally known” (see DR 5-108[a][2]) is the lawyer free to disclose it. [ABCNY Eth. Op. 2005-3; Jamaica Pub. Serv. Co. v. AIU Ins. Co., 92 N.Y.2d 631 (1998).]

Unfortunately, we don’t have enough information about the facts involved to determine whether the filing in court of the estate’s existence is enough to make that information “generally known.” Of course, it would appear that placing the information in a public court file seems like a healthy step in that direction. A better approach to this question is to ask should the lawyer disclose this information, even if the ethics rules allowed him to do so voluntarily. As a practical matter, it seems advisable to consult with the client and have a frank discussion about the possible outcome if the plaintiff’s attorney were later to learn that the estate had assets (i.e., further litigation with a nastier tone), compared with the outcome if the information were to be disclosed by the lawyer for the administrator immediately. By consulting with the client, the administrator’s lawyer ensures that if the information at issue is a secret and is not generally known, he will obtain direction as to whether the client consents to the disclosure, as the New York City Bar’s Opinion advises. [ABCNY Eth. Op. 2005-3.]

A Closing Thought

The inadvertent disclosure of attorney-client privileged communications has, of course, received plenty of attention in recent years, including in NYPRR. Although there is nothing new of substance to add from the point of view of will preparation, some cautionary words are still in order. How hard is it to misaddress a draft of a will, or press the wrong speed dial button on a fax machine, or, even send an email attaching a draft to the wrong person? If the draft is sent mistakenly to someone who (unexpectedly) finds that she was omitted as a beneficiary in that draft will, the client may well have some serious and unanticipated explaining to do. How much worse would things have been if those drafting Leona Helmsley’s will had, while the papers were being prepared, accidentally sent a draft of that document, including its large bequest to her faithful canine companion, to those who had been excluded from the will? [“Helmsley’s Dog Gets $12 Million in Will,” Washington Post, (Aug. 28, 2007).] This kind of problem can arise even if the lawyer transmits the document to the right email, or the right fax machine: There’s still a risk, particularly for such a personal document, that the wrong eyes (e.g., other family members) will see it.

Worse still, the guidance that lawyers have received concerning use of information inadvertently disclosed [see, e.g., ABCNY Eth. Op. 2003-4; NYCLA Op. 730] may not be of any help, because the incorrect recipient is far more likely to be a non-lawyer, not subject to the Code of Professional Responsibility. The bottom line here is simple — be extra careful in communicating the client confidences and secrets contained in draft testamentary documents, and consider using forms of communication that minimize the risks of accidental disclosure to others.

Jeremy R. Feinberg is the Statewide Special Counsel for Ethics for the New York Unified Court System. He would like to thank his colleagues Laura Smith and Nancy Lucadamo, for their insight and suggestions that immeasurably improved this article. The views expressed in this article are those of the author only and are not those of the Office of Court Administration or Unified Court System.

DISCLAIMER: This article provides general coverage of its subject area and is presented to the reader for informational purposes only with the understanding that the laws governing legal ethics and professional responsibility are always changing. The information in this article is not a substitute for legal advice and may not be suitable in a particular situation. Consult your attorney for legal advice. New York Legal Ethics Reporter provides this article with the understanding that neither New York Legal Ethics Reporter LLC, nor Frankfurt Kurnit Klein & Selz, nor Hofstra University, nor their representatives, nor any of the authors are engaged herein in rendering legal advice. New York Legal Ethics Reporter LLC, Frankfurt Kurnit Klein & Selz, Hofstra University, their representatives, and the authors shall not be liable for any damages resulting from any error, inaccuracy, or omission.

Jeremy R Feinberg Wills