Risk Update

Conflicts Training — Complex Scenario Walkthrough (Estate Planning Duty of Loyalty and Conflicts Management)

Here’s a great approach to conflicts education from from Burns & Levinson partner Tiffany Bentley and associate Noelle Lussier. What caught my eye in particular is that the firm has created a scenario to explore several issues: “A Family History of the Austens.” There are: “…made-up people with a wild accumulation of fictional (but factual) circumstances that raise all kinds of probate and fiduciary litigation issues.”

The conflicts pieces is the subject of: “An Estate Planner’s Duty of Loyalty: Examining the Austen Family” —

  • “Attorney Hume was Jack’s estate planning attorney. It is not surprising, then, that when Kate and Charlie had questions about their father’s estate plan following his death, they turned to Hume for advice. But what are the limits on what Hume can do for Kate and Charlie? What are the potential conflicts of interest, and what actions should Hume take to ensure that he fulfills his duties to his client – Jack – in the face of any conflict?”
  • “We can presume that the engagement letter states that the client in this case is Jack, not the Austen family and not Jack and Juliet jointly, as we know Jack failed to inform any of his family members of his estate plan prior to his death.”
  • “(Notably, attorneys engaging in dual representation of spouses could technically be violating the rules of professional conduct. To avoid a conflict of interest, attorneys – especially estate planning attorneys – must be clear in their engagement letters regarding joint representation and provide a full disclosure of the possible effect of dual representation. For purposes of this fact pattern, however, we will assume there was not a joint representation and that Jack was Hume’s only client.)”
  • “After Jack’s death, Hume met with Kate and Charlie to inform them of their father’s succession plan, specifically, that the remaining membership interests in the company would ultimately be divided equally among the siblings. A conflict of interest likely arose once Hume began to advise Kate with respect to her mother’s incapacity.”
  • “Hume advising on the disclaimer of assets, as well as providing tax advice upon Juliet’s death, may be considered outside the scope of his original work for Jack and would – at least potentially – create a divergence of interests among the beneficiaries of Jack’s estate, pitting the children against the surviving spouse. Further, by providing legal advice such as this, Hume may be creating an unintended attorney-client relationship with both Kate and Charlie, whose interests are neither aligned with each other nor with Jack’s estate. Hume would not be able to maintain his duty of loyalty and care owed to Jack’s estate while also owing these duties to Kate and Charlie.”
  • “Hume then went even further, indicating that he would need to apply for the conservatorship in order to execute the disclaimer on Juliet’s behalf. There would certainly be a conflict of interest if Hume himself stepped into the role of Juliet’s conservator, as he would then be serving as a fiduciary for Jack’s estate and Juliet.”