ETHICAL ISSUES AS AN ESTATE LAWYER WHO ACTS FOR THE WHOLE FAMILY - PART I
In this series of blogs, we address relevant ethical issues that can be troubling for the estate lawyer.
The ethical question that we thought we would struggle with is a circumstance where you have acted for a family as a whole, including the parents and the children, with regard to their estate planning and succession needs and then the parents come to see you, and ask you to amend the Will to reflect a greater gift to one child over another as a result of the fact that the other child's spouse has just inherited a great deal of money.
The concern, of course, is that there is no true animosity as between the parents and the child that is going to be less favourably treated; however, there is presumably a sensible rationale behind the new estate plan. The question remains, can you continue to act on behalf of the parents to effect these new instructions knowing that you have essentially acted for all of the family members? In other words, can a careful lawyer make these requested changes by the parents?
In the prior retainer where you were crafting an estate and succession plan on behalf of the family, as a whole there really was no meaningful conflict of interest as between the family members. The prior estate plan, before these new instructions, contemplated that the estate would be equally divided. Some consideration needs to be brought to bare on this difficult ethical dilemma.
In our next blog, we will start to work through what we think is the appropriate response and one which reflects the view that there is very little which can, ultimately be done. As you know, acting on behalf of the family can be a good idea when dealing with succession planning issues in light of the economies of scale that are created and the seamless and streamline instructions that you can work through.
Practically speaking, it often works well that the lawyer in fact be the family lawyer. In this case, it is not uncommon for the lawyer to act for one generation and then the latter generation as well. The U.S. experience has been that the lawyers will typically ensure that the nature and extent of the family lawyer "retainer" is clearly identified at the outset in a clear and unequivocal retainer letter.
The American College of Trust and Estate Counsel (ACTEC) have an ethics sub-commitee, which over the years have considered this question. In fact, in the ACTEC commentaries, there are specific suggestions made in the context of such retainer situations. For example, there are recommendations that waivers be obtained at the outset by all parties. The waiver would specifically address the obvious conflict that is inherent in the family lawyer's general role of acting on behalf of the generations.
It seems to us that one thing you do not want to do is have any uncertainty as to who your client is, as lack of communication can make for problems later.
Thanks, Ian and Suzana.
