Should your lawyer be the fiduciary (trustee or administrator)?

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Potential Challenges for Attorneys Acting as Fiduciaries in Estate Plans

The attorney who drafted your estate plan could also assume the role of the fiduciary of a trust or administrator of a probate estate. There is no rule or law against it. However, most attorneys are wary of this arrangement and, for the reasons described below, they will almost always refuse to be the sole trustee:

a) The lawyer who nominates herself as fiduciary in the relevant document establishes a business relationship with the client (outside the usual attorney-client relationship) that is therefore governed by additional conflict of interest rules. See Should you go into business with your lawyer?

b) The beneficiaries may attempt to remove a lawyer named as a sole trustee relying on CA Probate Code section 15642(b)6 because the attorney is one of the named persons in CA Probate Code 21380(a) by virtue of having drafted, transcribed or caused the instrument to be transcribed.

c) The ability of the lawyer who acts as a trustee or other fiduciary during the the lifetime of the client could be questioned because the fiduciary role may conflict with the ethical duty of loyalty and confidentiality to her client.

d) The lawyer may have represented other members of the family or beneficiaries interested prior to the death of the current client. She must consider whether upon the death of the current client circumstances change to such an extent that her independent judgment in a dispute between the lawyer, as fiduciary, and the beneficiaries, who were former clients, is impaired.

e) Same as above. This time the concern is about client confidentiality because the lawyer obtain confidential information from one or more beneficiaries in a prior representation it must not know use it as a fiduciary to the prejudice or detriment of the former clients.

Lastly, attorneys have a lot of work with putting together an estate plan and the job as a fiduciary adds a is it with a significant amount of ongoing work for which they cannot charge extra in California. CA Probate Code Section 15687.

Certificate of Independent Review

Notwithstanding the above, in some situations it may be a very desirable to all parties involved to have the attorney who knows the circumstances of the families complicated estate plan as fiduciary, perhaps acting in concert with additional fiduciaries. In this case it is advisable to obtain a Certificate of Independent Review by another attorney to mitigate the risk of a claim of undue influence.

 

Who should be trustee?

The attorney and disagreements between trustee and beneficiaries

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