Ethical Challenges for Lawywers in Estate Planning, Probate & Trust Administration

1. Ethical Challenges in
Estate Administration
By:
Monica Goel, Esq.
Tredway, Lumsdaine & Doyle
DOC ID# 92448

2. Ethical Issues in Probate Practice
 Sources
 Determining who your client is
 Representing an Estate
 PotentialConflicts of Interest
 Actual Conflicts of Interest
 The Unknown Conflict
 Avoiding Conflicts of Interest Involving Clients
and Beneficiaries

3.  Estate Planning Attorney Acting as
Attorney for Trustee
 Estate Planning Attorney Acting as
Trustee and Probate Counsel
 Attorneys acting as Trustees, Executor or
Administrator

4.  Problems Where Attorney May be a Percipient
Witness
 Where counsel for executor/trustee was also the
drafting estate planning attorney
 Competency
 Acting with Diligence
 Acting as a Supervising Attorney
 Obligation to Associate with Competent Counsel

5. Probate Fees dictated by statutory
schedule
 Attorneys' fees and the personal representative's commissions are
paid out of the estate and are computed as a percentage of the
gross value of the estate. The statutory fee schedule is as follows:
VALUE OF ESTATE PERCENT PAID AS FEES/COMMISSIONS
First $ 100,000.00 4%
Next $ 100,000.00 3%
Next $ 800,000.00 2%
Next $ 9,000,000.00 1%

6. Statutory v. Extraordinary Fees
 These are the fees that may be charged for ordinary services to the
estate, which generally includes all normal services rendered in
administering the estate.
 The Probate Code also permits the Court to authorize extraordinary
attorneys' fees for work performed by an attorney beyond the
above-mentioned services.
 Extraordinary fees will usually include, but are not limited to, any
attorney services in regard to the sale of real property, or any other
large asset, leases, rentals, evictions, litigation, negotiations to avoid
litigation, or preparation of personal and fiduciary income tax
returns. These fees are calculated by the attorney keeping his or
her time, and at the end of the probate administration, upon the
preparation of the final/waiver of accounting, the time spent in
extraordinary services is added and multiplied by the attorney's
billable rate.

7. ETHICS STUFF FOR
BUSY LAWYERS
SIX BASIC RULES FOR
STAY’N OUT OF TROUBLE!

8. RULE 1
IFYOU DON’T
KNOW THE LAW
DON’T TAKE THE
CASE

9.  Avoid taking cases outside of your practice area
absent supervision from competent colleague
and stay current on changes in the law affecting
your practice areas (CRPC 3-110)
 Medi-Cal Planning
 Elder Law
 Tax Law
 Domestic Partnerships and Sex Sax Marriage

10. RULE 2
AVOID CONFLICTS OF
INTEREST
 Avoid acquiring interests adverse to your
client (Rule 3-300)
 Avoid Sexual Relationships with your Client
 Avoid Conflicts of Interest ((Rule 3-310)

11.  Avoid the Third Party Payor Trap –
Remember who is your client!
 Estate Planning
 Trust Administration
 Avoid representation clients in a matter in
which opposing counsel is your spouse,
parent, child, etc.

12. RULE 3
 KEEP
CLIENT CONFIDENCES
ALWAYS?
What about when your client as
executor/trustee is the bad actor?
Actions taken by your client would
warrant removal or surcharge?

13. RULE 4
 AVOID REPRESENTATION OF
CLIENTS WITHOUT WRITTEN
FEE AGREEMENTS/ AVOID
UNCONSCIOUABLE FEES
(B&P CODE § 6149 and
Rule 4-200 )

14. RULE 5
AVOID THE PITFALLS
OF LIMITED SCOPE
REPRESENTATION

15. RULE 6
 DON’T AVOID OR IGNORE
YOUR CLIENT: MAKE THAT
CALL: COMMUNICATE,
COMMUNICATE,
COMMUNICATE (Rules 3-500
and 3-510)

16. Common Ethical Challenges in the
Trust Practice
 Can you avoid allocation on death of first spouse when
trust requires mandatory sub-trust split?
 Answer: Yes. Probate Code Section 15404 allows for
modification or termination by settlor and all
beneficiaries.
 Pitfalls
 Split families
 Contingent Beneficiaries
 Minor contingent beneficiaries – can they give consent or do
they need guardian ad litem to give such consent?

17. Common Ethical Mistakes that Can
Lead to Malpractice
 Actions that will trigger property tax
reassessment
 Client wants to share his inheritance with spouse.
Transfer to client alone first and then do a second
transfer to include spouse to avoid reassessment
 Transfer to grandchild while parent still living will
trigger reassessment
 Siblings buying each other out their distributive share
after distribution from trust

18.  Representing Co-Executors/Co-Trustees
 Do you have conflict language in your
Retainer Agreement?
 What do you do when conflict arises?

19. Questions?