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Recommendations from a Litigator to California Attorney Estate Planners

Guidelines for Attorneys on Elder Financial Abuse.jpgAt Hackard Law, we do California estate, trust and elder financial abuse litigation. Our practice experience includes circumstances where it seems that estate planning lawyers haven't really done their job. The few examples below are collected from real world experience and changed to protect the privacy of the parties involved.

Angus Flinch, a lawyer with 17 years' experience, has a limited estate planning practice in the East Bay. Juan Carlito, the son of Jaunita Carlito, called Angus in late 2017 to set up an estate planning appointment for his mother. Juanita, 78 years old, had a will in place that distributed her assets equally to her two children at her death. Juanita, a Spanish speaker, had only a third-grade education and a very limited understanding of English. Juan drove Juanita to the first appointment with Angus. Juanita barely said a word. Juan explained that Juanita wanted to leave everything to Juan and she also wanted his sister, Inez, disinherited. Angus prepared a trust doing what Juan directed. Juanita signed the trust and Angus explained that he had his assistant, who could speak elementary Spanish at best, explain some of the trust to Juanita. Juanita signed the trust.

Charlie Gambino, a Southern California lawyer, meets with Sadie Sark, an 87-year-old widow in poor health, at his office, regarding her estate plan. Sadie is accompanied by her nephew, Mortimer, at the first meeting. Sadie indicates that she wants to change her trust, disinherit her three children, and name Mortimer as the trustee and sole beneficiary of her trust. Sadie's prior and long-held estate plan provided for an equal division of her trust assets to her three children at her death. Sadie also wants to give Mortimer her power of attorney and add him as a joint tenant on land that she owns in Palm Springs. All of Charlie Gambino's follow-up questions from the first meeting, including emails and phone calls, were directed to Mortimer, not his client, Sadie. Mortimer emailed Charlie a list of all of Sadie's assets and a list of joint accounts that Sadie had with him. Charlie did not speak with Sadie during the two months between the initial meeting and the execution of the new trust. Charlie says that he never saw any undue influence.

Soccer Banzetti, a South Bay lawyer, focuses his practice in dealing with a financial advisor, Sam Shakey, who send him business. Sam, not a licensed attorney, solicits clients by phone calls and door-to-door sales. Sam promises a complete estate plan for $3200. Sam receives the entire $3200 and then pays Soccer $500 for Soccer's work. Soccer and Sam have been doing this for the last five years. They average about fifty estate plans per year. Sam contacts Bifford Jones and sells Bifford an estate plan. Soccer prepares the plan, sends it to Bifford, and Sam goes by Bifford's house where he notarizes Bifford's signature on the plan.

Now, is anything wrong with the way that attorneys Angus, Charlie and Soccer performed? Let's start with the basic legal rule that an attorney has the duty to communicate with the client, according to California Business & Professions Code Section 6068. This is also a part of the duty to render competent representation under California Rules of Professional Conduct 1.1. It sure looks like these three lawyers had little or no mutual communication with the client. Lacking such communication, how do you draft an appropriate estate plan?

Professor Mary F. Radford's "Recommendations for Lawyers" given at the ACTEC 2019 Annual Meeting is worthy of consideration by busy lawyers. A summary of her recommendations, prepared and distributed by Bessemer Trust, covers a lot of ground in this field. It notes:

Education. Lawyers should educate themselves and every client about elder abuse issues.

Legal Instruments. Much of the elder financial abuse occurs through the use of vehicles prepared by lawyers, such as powers of attorney, deeds for joint ownership of property, trusts, etc. Lawyer should not write a document for someone who is not present to talk with the lawyer.

Dealing with Diminished Capacity Clients. Lawyers should ramp up their understanding of signs of clients starting to show diminished capacity. For those clients, lawyers should put into place protective mechanisms, going beyond just creating trusts and powers of attorney, but including things such as trust protectors and family oversight committees, always keeping in mind that the person to whom we are giving power may end up abusing that power. Lawyers should demand more clarity from bar associations of how to deal with clients with diminished capacity. Rule 1.14 of the Model Rules of Professional Conduct addresses clients with diminished capacity, but ignores the areas of vulnerability and susceptibility. A client can have a high level of capacity, but still be susceptible to risks.

Reporting Elder Abuse. Attorneys should demand that legislatures and bar associations clarify the responsibilities of lawyers reporting elder abuse. In some states, lawyers are mandatory reporters. That is contrary to the attorney-client confidentiality that is the hallmark of the attorney-client relationship. On the other hand, lawyers need to have the discretion to report abuse without fearing professional discipline. Illinois says that anyone can report suspected elder abuse, and if in good faith with the best interest of the victim in mind, the reporter is immunized from disciplinary action, even if the information was otherwise confidential. Georgia's professional conduct rules allows a lawyer to reveal confidential information if necessary to avoid or prevent substantial financial harm that would result from third party criminal conduct.

Ask for Trusted Contacts. Attorneys should discuss with clients the potential for future elder abuse, and ask the client if he or she is willing to provide names of someone who would be contacted if the attorney suspects elder financial abuse.

Hackard Law represents foreign, out-of-state and California clients in California trust, estate, probate and elder financial abuse litigation. We take significant cases where we think that we can make a substantial difference and there is a wrongdoer who can be made financially accountable for their wrongdoing or breach of duty. We focus our geographic reach to the Superior Courts, probate and civil, of Los Angeles, Orange, Santa Clara, San Mateo, Alameda, Contra Costa and Sacramento Counties.

If you would like to tell us about your case, call us at 916 313-3030. We'll be happy to hear your story.

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