Trust & Estate Bandits | Abused Beneficiaries
- March 9, 2018 - Abused Beneficiaries, Estate Litigation, Trust Litigation,
Blundering trust and estate bandits are still bandits – outlaws secretly or openly defiant of laws and responsibilities that go with the legal obligations required of those who possess or are otherwise responsible for estate or trust assets. While the vast majority of trust and estate professionals take their fiduciary obligations seriously, unfortunately some outliers, some might say “bandits” – those who take “unfair advantage over others usually to procure inordinate payment or profit.”  Inordinate payment may range from outright theft to unconscionable overbilling that drain trusts and estate funds.
Longtime Nevada estate attorney Robert Graham pled guilty last fall “to stealing more than $16 million from clients, many of whom relied financially on trust funds he oversaw.”  Graham was sentenced in December 2017 to 16 to 40 years behind bars. In February 2018 Paul Richard Karan, a New York “attorney who specialized in trusts and estates planning, pleaded guilty to grand larceny and other charges for the theft of more than $2.6 million from the estates and trusts of multiple families … callously abusing the longtime trust they placed in him as their attorney and advisor … The defendant systematically drained his victims’ trusts and estate funds over a period of more than a decade 
Out-and-out thefts from estates and trusts, once discovered, bring near-universal revulsion and disdain. But what about other efforts that effectively use “unfair advantage” to “procure inordinate payment or profit?” Justia’s Verdict is an online site that provides “legal analysis and commentary” on developments in law and politics. Verdict published an article online in November 2014 titled “The Problem of Inflating Billable Hours.”4 The article described lawyer conduct referenced as “’churn that bill, baby!’ mode.” It cites “astonishing stories of lawyers overbilling their clients.” Those who practice estate and trust law have seen or hear of anecdotal evidence of such churning: A law firm charging nearly $1 million for a trust defense that didn’t go to trial and had only three depositions; Efforts by a law firm to collect almost $200,000 in defense fees that involved minimal pleading and discovery; and a law firm seeking $1 million in fees for recovering $500,000 in assets.
The Verdict article references a legal fee management & litigation consulting firm that will examine the reasonableness of fees with legal bill reviews, “legal bill audits,” and expert testimony. There are a number of consulting firms that do this with an end goal that often provides detailed and comprehensive reports identifying legal expenses that appear unreasonable, wasteful, mismanaged or inefficient. The bottom line? Accountability and transparency.
I’ve previously written about the “burn the house down” approach that I’ve seen some trustee’s lawyers use in trust litigation. The basic approach is that the trustee will spend all remaining trust assets to pay attorney’s fees to defend against aggrieved beneficiaries. The technique is at times simply outrageous and reflects the justly criticized “churn that bill, baby!” approach to litigation. Opposing lawyers will often seek the intervention of the court to stop such billing abuse on but judicial intervention is not always forthcoming – or unfortunately deferred to a date where the damage is already done. If possible, “legal bill audits” by independent and respected consultants may be a partial remedy to such overbilling.
I view it a privilege to be a lawyer. Our profession truly can be a force for good and not for evil. The problem of inflating bills is not a problem coming from only one area of the profession.
Legal fees are supposed to be reasonable. Statutes set some attorney’s fees and contractual arrangements outline the parameters for other fees – whether hourly, contingency or “set fees.” The retention of litigation counsel in trust and estate litigation can be expensive. Expensive is one thing and overbilling is another. In any event it is important to be vigilant in estate and trust litigation, just as it is in many areas of our life. Billing transparency and attorney accountability go a long way toward providing the data needed for vigilance.
 Danielle Braff, “New billable hour tracking tools reignite fee debate,” ABA Journal, March 2018, accessed March 8, 2018, http://www.abajournal.com/magazine/article/billable_hour_tracking_fee_debate
1 “bandits.” (1993). In Philip Babcock Gove (Ed.)., Webster’s Third New International Dictionary (p. 170). Springfield, MA: Merriam Webster Inc.
2 Jeff German and David Ferrara, “Las Vegas: Attorney Rob Graham Pleads Guilty to Stealing over $16 million from Client Estate Funds,” Las Vegas Review Journal, 2017, accessed March 8, 2018, https://www.reviewjournal.com/videos/attorney-pleads-guilty-to-stealing-over-16-million-from-clients/.
3 Colby Hamilton, “Attorney Pleads Guilty to $2.6M Theft from Estates, Trusts,” The New York Law Journal, 2018, accessed March 8, 2018, https://www.law.com/newyorklawjournal/2018/02/15/attorney-pleads-guilty-to-2-6m- theft-from-estates-/ .
4 Ronald D. Rotunda, “The Problem of Inflating Billable Hours,” Verdict, 17 Nov 2014, accessed March 8, 2018, https://verdict.justia.com/2014/11/17/problem-inflating-billable-hours.
Attorney Michael Hackard
Michael Hackard is a top rated “AV” for over 20 years (“AV Preeminent is a significant rating accomplishment- a testament to the fact that a lawyer’s peers rank him or her at the highest level of professional excellence.”). Avvo also ranks him with their highest rating – “ 10.0 Rating – ‘Superb.’” Michael is also a “SuperLawyer” – an honor reserved for no more than five percent of attorneys in each state. [ Attorney Bio ]
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