Trust and Estate lawyers commonly draft reciprocal testamentary instruments for married couples. In representing these individuals, the attorney meets with both parties together to discuss their aligned (and separate) probate goals, evaluates the strengths and weakness of options available to the clients, and ultimately drafts joint, complementing instruments to reflect these wishes. In most cases, once the instruments are drafted, the clients go on their way and the representation (and potential conflict issues) terminates.
However, when trust and estate planning attorneys become involved in subsequent trust administration and litigation, a host of additional ethical consideration arise, and can even amount to attorney disqualification. As is outlined in Fiduciary Trust International of California v. Superior Court (2013) 218 Cal.App.4th 465 (“Fiduciary Trust International”), the conflicts of interest that arise in subsequent representation of former joint estate planning clients – absent explicit consent -- will ultimately bar an attorney from representing one party in a subsequent action.
In Fiduciary Trust International, a trust and estate firm, Sandler & Rosen, jointly drafted wills for husband and wife Willet and Betty Brown. These documents, executed in 1992, established a marital trust with several deferred tax provisions, and were designed to benefit each of Willet’s four children (Marital Trust). After Willet’s death, Betty revoked her instruments, and drafted a new instrument transferring her assets to a trust benefiting only her daughter.
Upon Betty’s death and during trust administration, Betty’s personal representative, Fiduciary Trust International, and the beneficiaries of the Willet Marital Trust, disagreed as to which Trust should be responsible for a sizeable tax bill ($27M) due on Betty’s estate.
Fiduciary Trust moved to disqualify the Marital Trust beneficiary’s counsel, Sandler & Rosen, on the grounds that the firm had previously jointly represented Betty and Willet in drafting the instruments in question. On appeal, the Court of Appeals agreed that this scenario – subsequent representation taking a position adverse to a former client’s interests without consent -- was exactly the type which the Model Rules prohibit.
The Court opined that under California Rule of Professional Conduct 3-310(e) (Now Rule 1.7) a disqualifying conflict of interest arises under two circumstances: (1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client, and (2) in cases of simultaneous representation. In the former, the governing test requires that the client demonstrate a “substantial relationship” between the subjects of the antecedent and current representation. The Court further reasoned that a “substantial relationship” exists whenever the subjects of the prior and current representations are linked in some rational manner. Here, Sandler & Rosen jointly represented Willet and Betty in drafting their corresponding instruments, and the court easily found the relationship supported Sandler & Rosen’s disqualification.
Former Rule 3-310(A) (now most closely reflected in Rule 1.7) stated that if an attorney has relations with another party interested in the representation, or in its subject matter, that the member shall not accept or continued representation without all affected clients’ informed, written consent. The Drafter’s Notes to former Rules of Prof. Conduct, rule 3-310(a) (now Rule 1.7) specifically listed the preparation of joint or reciprocal wills for a husband and wife as a form of multiple party representation that has adverse aspects and requires written consent. Had Sandler & Rosen obtained written consent from Betty to represent Willet’s interests, they may have been able to proceed with representing the Marital Trust. However, they had not obtained any written consent, as required by the Model Rules, prior to jointly representing Betty and Willet in 1992.
In granting the disqualification against Sandler & Rosen, the Court opined: “the duty not to represent conflicting interests…is an outgrowth of the attorney-client privilege itself, which is confidential, or fiduciary, in a broader sense. Not only do clients at times disclose confidential information to their attorneys, but they also repose confidence in them. The privilege is bottomed only on the first of these attributes, the conflicting-interests rule, on both.” (Id. at 485.)
Fiduciary Trust International is a reminder to estate planning attorneys to clearly explain the rules and potential conflicts of joint representation in probate matters. If the attorney has any concerns about future involvement with one or both parties probate administrations, they should obtain a written conflict waiver per the California Rules of Professional Conduct. Absent the waiver, however, the attorney should consider declining representation of one joint client against the other – even if the representation involves next of kin.