Tag Archive | "trusts"

The Survivors Guide to Everyday Estate Planning Practice – Nov. 2

TOPICS:
The Wonderful World of Wills:
Knowing How & When to Use Wills for Everyday Estate Planning

Untangling the Myths of Trusts:
Best Practices in Recommending & Drafting Commonly Used Trusts

Everyday Estate Planning Roundtable –Wills vs. Trusts?:
Wills v. Trusts, & Other Current Topics in Everyday Planning Practice (including a Question & Answer Session)

The Medicaid & Long Term Planning Maze:
Identifying When Clients May Need More than the Simple Estate Plan

Dealing with the Impaired/Incapacitated Client:
How to Ethically Identify, Deal with & Manage Impaired/Incapacitated Clients

Putting on the Finishing Touches to the Estate Plan:
Drafting & Using Powers of Attorney, Living Will Declarations & Health Care Proxy Documents
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FACULTY:
Jeanette C. Kassebaum – Chair
Attorney At Law, Fishers, IN

Mary J. Hoeller, R.N., J.D., NCG
Indianapolis, IN

Mark W. Holwager
Holwager & Holwager, Attorneys at Law, P.C., Beech Grove, IN

Kimberly A. Jewell
Holwager & Holwager, Attorneys at Law, P.C., Beech Grove, IN

Arlene Kline
Law Office of Arlene Kline, Indianapolis, IN

Steven C. Robinson
Robinson Wolenty & Young, LLP, Indianapolis, IN

Julia S. Weaver, J.D., LL.M.
Director, Family Office Services & The Trust Company of Oxford,
Oxford Financial Group, Ltd., Carmel, IN

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The Survivors Guide to Everyday Estate Planning Practice
6 CLE / 1 E – Thursday, November 2

LIVE IN-PERSON SEMINAR
– ICLEF Conference Facility, Indianapolis

LIVE INDIVIDUAL WEBCAST
– From your home or office computer

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Estate Representation: Negligence? Course of Action?

Perhaps you’re interested in legal negligence issues. Or, perhaps you should be.  I have important information on legal malpractice action provided by Robert York during his recent CLE presentation. Included in Bob’s list of the Five Key Cases in Estate Practice in 2013 is Ferguson v. O’Bryan. He shares the details of this interesting case with Law Tips readers.

Ferguson v. O’Bryan – 996 N.E.2d 428 (Ind. Ct. App. 2013)
Here, Relatives of testator brought legal malpractice action against an attorney who drafted will, asserting that due to attorney’s negligence, bequests testator intended to make to relatives failed.

Facts and Procedure:
In 2005, the seventy-eight-year-old Linder wished to change her will. Linder contacted Marian College, her alma mater, for a referral to an attorney. The school referred her to O’Bryan, who is also a Marian graduate. Linder hired O’Bryan to draft a new will. Before O’Bryan drafted the will, Linder informed him that she had a list of items that she wanted to leave to various individuals. O’Bryan informed Linder that he would bring her a separate form that she could use to make these and other specific bequests and told her that she would need to fill out the form and sign and date it. In accordance with Linder’s wishes, the will contained a residuary clause in favor of Marian College. The will also referenced the list that Linder had discussed with O’Bryan. Specifically, Article II of the will provided as follows:

I hereby give and bequeath each described item of cash or personalty set out on a certain list which I will from time to time update and keep with this Will. Said list will set out the name of the person and the item or items I bequeath to each such person.

I direct that my Personal Representative honor the list the same as if it had been set out herein. Should any questions arise regarding said list, the decision of my personal representative shall be conclusive. Any modifications I may choose to make to said list shall each be dated and initialed.

The form O’Bryan provided to Linder for the purpose of making the list referred to in her will was titled “Specific Bequests of Cash and/or Personalty” and included the following statement:

This list is the one I, Mary Helen Linder, referred to in my Last Will & Testament dated February 19, 2005. I direct that my Personal Representative honor this list and see to it that each such listed item be given to the named donee. I intend to make changes to this list from time to time by additions or deletions by lining through any deletions and initialing and dating all such changes. I will try to keep this list with or near a copy of the above-mentioned Will.

The form did not contain designated spots for the bequests to be signed, dated, or witnessed.

Linder filled in the form indicating that she wished to make a number of cash bequests, including bequests to the Relatives ranging from $5000 to $50,000 apiece. Linder did not sign and date the list as instructed, nor was the list witnessed. Following the execution of the will, O’Bryan stayed in regular contact with Linder, but he denies ever seeing the filled-in form or even knowing whether Linder ever filled out the form at all. Two years after drafting the original Will, at Linder’s request, O’Bryan drafted a codicil and assisted Linder in its execution. Linder passed away just twelve days later.

The named personal representative notified O’Bryan, who filed the will and codicil with the probate court, but not the list. Sometime later, O’Bryan informed the probate court of the list’s existence. The probate court appointed special counsel to investigate the list’s validity and held a hearing on the matter. Before the probate court issued a ruling, it approved a settlement agreement between Linder’s estate and the Relatives providing that the list was invalid and that $25,000 would be divided among the Relatives.

In April 2010, the Relatives filed a legal malpractice action against O’Bryan. In August 2011, O’Bryan filed a motion for summary judgment, asserting that he did not owe the Relatives a duty because “there is absolutely no evidence that [he] had actual knowledge that they were on the List or were intended beneficiaries of Ms. Linder or her Estate.” After a hearing, the trial court denied the motion in March 2012. O’Bryan filed a motion to correct error, and, after a hearing, the trial court granted the motion and entered summary judgment for O’Bryan in June

2012. The Relatives then filed a motion to correct error, and the trial court held yet another hearing. In October 2012, the trial court entered an order denying the Relatives’ motion to correct error and clarifying the basis for its entry of summary judgment in O’Bryan’s favor. In a 2-1 decision, the Court of Appeals reversed the granting of summary judgment in favor of O’Bryan.

What do you believe are the responsibilities of the attorney to his client in this case? Did his duty extend to the Relatives?  Do you agree with the courts’ rulings on summary judgment?  Deliberate on your own until next week when we’ll continue this case review by Bob York with the holding by the court and a discussion of the results.  Join us here at Law Tips to see where the court stands. 

If you’re interested in an update from experts in estate and related fields the ICLEF On Demand Seminar of “120 Hot Tips in Probate, Guardianships, Trusts and Tax” is available by clicking here.  This CLE features succinct and relevant training from a panel of 25 experts in their fields, including our Law Tips contributor, Bob York

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About our Law Tips faculty participants:
Robert W. York, Robert W. York & Associates, has practiced law in Indianapolis since 1973, beginning with his first year of practice as a Marion County Deputy Prosecuting Attorney.  He is a seasoned trial lawyer who focuses his practice on litigation involving estates/trusts/probate; business; contracts; insurance; and injury, in all Indiana state and federal courts. Mr. York served as an Indiana Administrative Law Judge from 1974-83; and also as a frequent Special Judge in major felony trials from 1992-2011.  Bob has also earned his USA Master Hockey Coach Certification.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Law Tips; Estate & Trust Administration Tune-up, Pt. 3; The Duty of Confidentiality

After you have established who is your client, agreed on a reasonable fee and reviewed all the possible conflicts of interest, there are yet additional curves in the probate road about which our expert warns you.  Kristin Steckbeck Bilinski’s advice on being aware of the good fiduciary who may go bad and dealing with beneficiaries were parts 1 and 2 of our Estate & Trust Administration Tune-up series.  If you didn’t get the chance to read Kristin’s previous counsel, you may want to page back in Law Tips after we finish here.  To wind up our series, she offers an opinion on your duty of confidentiality. 

Does lawyer-client confidentiality prevent the fiduciary’s lawyer from disclosing information to estate or trust beneficiaries? In my opinion, the answer to this question is unclear. Rule 1.6 of the Indiana Rules of Professional Conduct states that the lawyer may make such disclosure as is “impliedly authorized to carry out the representation.” It has been suggested that the “impliedly authorized” language of Rule 1.6 permits, but does not require, disclosures to the beneficiaries of past breaches of fiduciary duty in order to protect the beneficiaries. 9

But what about a beneficiary who is reasonably requesting information in the case where the fiduciary has done nothing wrong? In such cases, it is best for the lawyer to strongly encourage the fiduciary to communicate more openly with the beneficiaries. 10 This is yet another area where open and honest (and sometimes blunt) client communication can save a lawyer much doubt and heartache.

In more extreme situations, Rule 1.6 governs in cases where the lawyer suspects that the fiduciary may be contemplating not just a breach of fiduciary duty, but a breach rising to the level of a criminal or fraudulent action. In such cases, the lawyer may disclose otherwise privileged information in order to prevent action that is “reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services.” If the criminal or fraudulent action has already taken place and is subsequently discovered by the lawyer, the lawyer may disclose privileged information if such disclosure will “prevent, mitigate, or rectify” any “substantial injury” that would otherwise result from the fiduciary’s actions.

As for the right or obligation of the lawyer to withdraw from representing a fiduciary who has or is going to commit a crime or fraud, here’s my comment on communication with the client:  It is unfortunate that Rule 1.3 is ever an issue for any lawyer, but busy days and heavy workloads mean that the duty to “act with reasonable diligence and promptness” is frequently compromised. Rule 1.3 serves as a good reminder – it is always incumbent on the lawyer to act with reasonable diligence in representing the fiduciary client and to work hard to keep the fiduciary well-informed.

This concludes our Estate & Trust Administration Tune-up here on Law Tips. I am grateful to Kristin Steckbeck Bilinski for providing her valuable guidance for avoiding ethical dilemmas along the probate road. If you need to review her ethical tips in Parts 1 and 2 of this series, scroll down below.

There is a full array of expert advice from the panel of our CLE program entitled Estate & Trust Administration Skills: Bumps, Curves and Detours Along the Probate Road  that’s available as an On Demand Video or near you as a Video Replay Seminar, Click Here. Or if you prefer your CLE live, the Estate & Admin. Skills Part 3: Timeout to Taxes, is now available as a Live In-Person Seminar on October 24, Click Here

9  American College of Trust and Estate Counsel commentary to Model Rule 1.6. See also Report of the Special Study Committee on Professional Responsibility: Counseling the Fiduciary, Real Property, Probate and Trust Journal Vol. 28, No.4 (1994).

10 See ACTEC commentary to Model Rule 1.2, which states that it is primarily the fiduciary’s responsibility to communicate with beneficiaries, and not the lawyer’s.

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Our Law Tips Faculty Participant:
Kristin Steckbeck Bilinski joined Longsworth Law LLC, Fort Wayne, Indiana, in 2011 as an associate. Prior to joining Longsworth Law LLC, Kristin practiced in the areas of estate planning, estate administration, and general civil litigation. She was admitted to practice in Indiana in 2007 after graduating cum laude from Indiana University Maurer School of Law. Kristin’s community service includes the Juvenile Diabetes Research Foundation, Northern Indiana Family Mentor Coordinator and Fort Wayne Business People.

About our Law Tips blogger:
Nancy Hurley, Law Tips blogger, has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page. Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you on Law Tips.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Law Tips: Estate and Trust Administration Tune-up Pt. 2, Dealing with Beneficiaries

Welcome back to our Law Tips series offering pointers from Kristin Steckbeck Bilinski on navigating the bumps, curves and detours along the probate road. This week Kristin’s advice turns toward dealing with beneficiaries.  Here are some important insights from Ms. Bilinski for avoiding ethical problems: 

Comment [11] to Rule 1.2 of the Indiana Rules of Professional Conduct cryptically states that “[w]here the client is a fiduciary, the lawyer may be charged with special obligations in dealings with a beneficiary.” Sounds logical- but what does this sentence really mean?

The American College of Trust and Estate Counsel (ACTEC) commentary to Rule 1.2 may perhaps provide a bit more guidance. This comment states that:

[t]he lawyer for the fiduciary owes some duties to the beneficiaries of the fiduciary estate although he or she does not represent them. The duties, which are largely restrictive in nature, prohibit the lawyer from taking advantage of his or her position to the disadvantage of the fiduciary estate or the beneficiaries. In addition, in some circumstances the lawyer may be obligated to take affirmative action to protect the interests of the beneficiaries. Some courts have characterized the beneficiaries of a fiduciary estate as derivative or secondary clients of the lawyer for the fiduciary. The beneficiaries of a fiduciary estate are generally not characterized as direct clients of the lawyer for the fiduciary merely because the lawyer represents the fiduciary generally with respect to the fiduciary estate.

Some states (Indiana not included) have gone so far as to state that the lawyer for a fiduciary has privity or an affirmative duty vis-a-vis estate or trust beneficiaries. 11

The complex relationship with beneficiaries is perhaps one of the most commonly faced ethical issues when representing a trustee or a personal representative. Most often, estate or trust beneficiaries do not have their own counsel, and instead rely on the fiduciary’s honesty and judgment.  When a beneficiary is thus unrepresented by counsel, it sometimes becomes necessary for the fiduciary’s lawyer to deal with her directly, whether it be providing distributions and receipts, providing a copy of the trust instrument, preparing tax returns, dealing with claims paperwork for life insurance or annuities, etc. When a beneficiary frequently communicates with the fiduciary’s lawyer, he can mistakenly gain the impression that the fiduciary’s lawyer is “his” lawyer too.

Rule 4.3 gives a lawyer some guidance in this situation. In such circumstances, a lawyer should never “state or imply that the lawyer is disinterested.”

Rather, [w]hen the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding.

Make every effort to insure- preferably in writing- that the beneficiary completely understands the nature of your representation of the fiduciary. The ACTEC commentary to Model Rule 1.2 states that it is primarily the fiduciary’s responsibility (rather than that of the fiduciary’s lawyer) to communicate with the beneficiaries, so be sure to communicate through the fiduciary whenever possible. Additionally, the ACTEC commentaries suggest an initial meeting between the fiduciary, her lawyer, and all beneficiaries in order to give everyone the opportunity to discuss and understand the complex relationship between all parties in an estate or trust administration.

Rule 4.4 is also sometimes relevant in the lawyer’s dealings with the beneficiaries, especially those who are unrepresented. This rule states that “a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person.” Frequently, there is personal or family animosity between a lawyer’s fiduciary client and a ‘black sheep’ beneficiary.  The lawyer must always be careful not to participate in any way in such animosity. For example, be careful of the wording of correspondence and court filings. Also be sure that your fiduciary client is making distributions in a timely and equal manner among trust beneficiaries, regardless of any strained relationships.

Dealings with beneficiaries can be hazardous, or at the very least may present a few challenges. I appreciate Kristin Steckbeck Bilinski sharing her succinct ethical guidance in this area. The Video Replay for “Estate & Trust Administration Skills: Bumps, Curves and Detours Along the Probate Road,” is available in several locations around the state in the upcoming weeks, plus the On Demand Seminar is available Anytime Anywhere. Click Here for more info.

We’ll continue our road trip around another curve next week as Ms. Bilinski provides her counsel in the Duty of Confidentiality.  Stay tuned as she covers these important issues.

11See, e.g., Charleson v. Hardesty, 839 P.2d 1303 (Nev. 1992); Elam v. Hyatt Legal Svcs., 541 N.E.2d 616 (Oh. 1989); contra Goldberg v. F1ye, 217 Cal. App. 3d 1258, 1269 (1990) (“[P]articularly in the case of services rendered for the fiduciary of a decedent’s estate, we would apprehend great danger in finding stray duties in favor of beneficiaries.”)

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Our Law Tips Faculty Participant:
Kristin Steckbeck Bilinski joined Longsworth Law LLC, Fort Wayne, Indiana, in 2011 as an associate. Prior to joining Longsworth Law LLC, Kristin practiced in the areas of estate planning, estate administration, and general civil litigation. She was admitted to practice in Indiana in 2007 after graduating cum laude from Indiana University Maurer School of Law. Kristin’s community service includes the Juvenile Diabetes Research Foundation, Northern Indiana Family Mentor Coordinator and Fort Wayne Business People.

About our Law Tips blogger:
Nancy Hurley, Law Tips blogger, has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page. Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you on Law Tips.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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