Source: http://www.mayberrylawfirm.com/bio/writings/ethics-for-elder-lawyers
Timestamp: 2019-04-20 02:24:27+00:00

Document:
All lawyers practicing in the Commonwealth are bound by the Virginia Bar Rules of Professional Conduct [“Rules”] and Legal Ethics and Unauthorized Practice of Law Opinions [“LEOs”] approved by The Supreme Court of Virginia.
Legal knowledge, skill, thoroughness and preparation necessary to the representation are necessary before undertaking accepting this practice area.
New entrants may consider taking relevant CLE courses, such as this course, independent study of the law and practice using various Virginia Elder Law publications; use of a mentor; and taking the assistance of experienced lawyers on select legal issues or co-counseling with permission of the client with an experienced elder lawyer.
Protecting legacy assets for family, friends, charities and other beneficiaries of the testamentary disposition at the maker of the plan’s death is one of the goals in Medicaid asset protection planning. A recent case caused a reconsideration of traditional thinking that lack of privity prevented third party beneficiaries from commencing a legal action for malpractice against the lawyer preparing the legal instruments.
In Thorsen v. Richmond Society for the Prevention of Cruelty to Animals (June 2, 2016) http://www.courts.state.va.us/opinions/opnscvwp/1150528.pdf (also reprinted for the reader’s convenience, see Exhibit 3 below), the Virginia Supreme Court, abolish the privity requirement in legal malpractice actions and create a new cause of action against attorneys in favor of third-party beneficiaries in estate planning.
The scope of the decision is being studied by estate planning and elder law attorneys, including those whose primary practice is Medicaid and asset protection planning. The Thorsen dissent offers one justice’s perspective: “Such uncertain and unlimited liability will undoubtedly deter attorneys from offering estate planning services. Additionally, this expansion of liability will likely lead to higher malpractice insurance premiums and ultimately affect the ability of potential clients to obtain affordable estate planning” Thorsen at 33.
Medicaid asset planning, absent other factors, is ethical and legal. However, an understanding of where the line is drawn in such planning and the viewpoint that many, including the state, shall study closely to ensure the implementation of the plan is accomplished within the letter and spirit of current law. A look at when asset transfers become fraudulent is helpful.
The profile of a client involving fraudulent transfers typically has debt or a “financially toxic asset” whose value exceeds their ability or willingness to pay this financial obligation. Attempts at fraudulent conveyances find their way into estate planning offices due to the fact the conveyance into certain types of trusts and between trusts or use of select types of tax planning can better disguise the transaction than mere gifts and make them more difficult to untangle upon discovery. A trust conveyance [or any other conveyance] that transfers an asset out of the control of a debtor can be a fraudulent transfer if the transfer is made with the “intent to delay, hinder, or defraud creditor.” Fraudulent transfers can be set aside if the creditor asks the court to do so.
A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning, or application of the law.
A lawyer is required to give an honest opinion about the actual consequences that appear likely to result from a client's conduct. The fact that a client uses advice in a course of action that is criminal or fraudulent does not, of itself, make a lawyer a party to the course of action. However, a lawyer may not knowingly assist a client in criminal or fraudulent conduct. There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.
In LEO 1771, Exhibit 2, a client requested a lawyer transfer a client’s only asset from sole ownership to tenancy by the entirety with the client’s spouse for the purpose of placing the asset out of reach of the client’s creditors. A lawyer may explain it’s a void transaction which the lawyer could not lawfully or ethically implement.
This is a word to Medicaid planner to avoid any part of the planning which may involve a fraudulent transaction. Moreover, legislative history shows the concern of the government in any asset transfers for Medicaid qualification. 42 USC 1320 a-7b (1998) criminalized attorneys or other “paid advisors” to knowingly counsel an individual to dispose of assets (including into a trust) in order for the individual to become eligible for medical assistance under Medicaid.
This provision was found unconstitutional in New York Bar Association v. Reno, 999 F. Supp. 710 715 (E.D.N.Y. 1998), and asset transfers were decriminalized. In Medicaid planning, as with any other types of asset protection planning, counsel should clearly delineate the client’s goals, and reflect the same in the engagement letter.
Some flags of impairments are obvious, such as slurred speech, hearing disabilities, and cognitive functioning. Others impairments are more subtle; such as older adults starting to make decisions uncharacteristically contrary to their life long held beliefs and values. The lawyer has a duty to protect an older adult’s or otherwise impaired person interest zealously. The ethical caring lawyer can be a last line of defense in our society for the less fortunate individual.
If a lawyer believes the client is “at risk of physical, financial or other harm unless action is taken…the lawyer may take protective action…” including determining who can provide protection for the impaired person [e.g. a family member, or a governmental entity] and in cases warranting court intervention move for a guardianship. Urgent action by a lawyer in these circumstances calls for judgment and skill to protect the impaired person from self or others.
Many elder lawyers and estate planning attorney’s practices include contested and uncontested Guardianships while many lawyers provide a value service to the community acting as Guardian Ad Litem and factually investigating these type of cases for the Court.
Some of more usual cases that arise with estate planning lawyers involved clients in various phases of dementia. Initially the client is competent and preparing for impairment caused by this debilitating progressive neurological disorder. As the disorder progresses the client may be in the “grey zone” where it is unclear about the extent that the disorder is interfering with the client’s decision-making. Securing a medical opinion by the client’s specialized physician may help clarify whether the client is capable of making critical life decisions. Where possible the lawyer should look to the client’s representative [preferably a family member serving under a valid power of attorney or court appointment as a guardian] for decision-making.
Prevalence; A comprehensive study found elder law abuse to be prevalent among older adults in New York state: 1 in 13 older adults in the state of New York had been victims of at least one form of elder abuse in the preceding year. Extrapolated, an “estimated 260,000 older adults in the state had been victims of at least one form of elder abuse in the preceding year (a span of 12 months between 2008-2009).
Moreover, 2009 study revealed that close to 50% of people with dementia experience some kind of abuse. Quinn, K., & Benson, W. (2012). The states’ elder abuse victim services: a system in search of support. Generations 36(3), 66–71. See generally, the National Center on Elder Abuse, Administration on Aging at http://www.ncea.aoa.gov/Library/Data/index.
“When the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in the client's own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian”.
Adult Protective Services, part of Virginia Department of Social Services, may be contacted. APS will investigate and take appropriate action to protect the abused older adult. The Adult Protective Services hotline is: (888) 832-3858. See also http://www.dss.virginia.gov/family/as/aps.cgi.
Counsel may also, in appropriate cases, petition the court to appoint guardian ad litem to protect the interests of the abused.
These cases are extremely difficult for counsel, as the accompanying adults of your client may have brought the victim to your office and be present. Many lawyers believe there is a moral imperative if not an ethical duty to take action in cases of elder abuse to prevent further harm to the client.
The client is applicant of the Medicaid application, or grantor of the irrevocable trusts which may be used in asset protection planning for older adults older adult (which shall be referred to as the “client”). Rule 1.2 clearly states “(a) lawyer shall abide by a client's decisions concerning the objectives of representation…” “The client has ultimate authority to determine the purposes to be served by legal representation, within the limits imposed by the law and the lawyer's professional obligations.” Comment 1 to Rule 1.2.
Counsel must consider often the interests of the client is to retain control of assets during their lifetime (irrespective of effect on death beneficiaries), thus subjecting same to Medicaid spenddown reducing possible testamentary transfers to the adult children. Other client put more emphasis in protecting the legacy. Ascertaining client’s goals and best interest, and not permitting undue interest by downstream beneficiaries or any other person, avoids a conflict of interest from occurring.
The issue arises because the client may be challenged by the complexity and intricacies of the Medicaid application and transfer of assets, typically out of the control of the client, in the case of asset protection planning for the elderly anticipating loss of their estate due to nursing home and medical costs. Typically, the accompanying adult children are testamentary beneficiaries at their parent’s death leading some to believe they are “entitled” to control the lawyers work.
Sometimes the accompanying adult children believe they are also the client (untrue) and this is the point in which “(a) concurrent conflict of interest exists (when):(1) the representation of one client will be directly adverse to another client…” and “a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.” Rule 1.7(a) Clearly, “[l]Loyalty and independent judgment are essential elements in the lawyer's relationship to a client.” Id.
Third party payment of legal fees must “not compromise the lawyer's duty of loyalty to the client;”, and a lawyer should decline any arrangement in which the non-client payer of legal fees attempts to dictate the terms of the estate plan. Clearly set forth in the engagement letter a third party is paying the fees but has not control or access to information involving the representation by virtue of payment of legal fees.
An approach to implement the above is effectuated by counsel discussing with the client and accompanying adult children these issues, and then then meeting alone with the client to determine mental competency and the client’s goals.
Usually a married client is undertakes Medicaid planning out of the desire of the spouses to protect each other in this part of the aging process. A lawyer can, with the client’s consent represent two people whose interests are only potentially opposed to each other’s if each client’s consent is obtained in writing after full disclosure of the ethical issues to the clients.
A lawyer faces a conflict of interest in representing both spouses in a non-stable marriage (or if they are legally separated) in which the interests of each spouse are different and conflict with one another, or one in which each spouses take a different position on the Medicaid planning which conflict with each other. This conflict is clear-cut and not waivable and each party requires separate counsel.
Representation of married couples raises the issues of client confidentiality and privilege. Anything disclosed by one spouse is disclosable to the other spouse. The engagement letter reflects representation of a married couple, waiver of attorney client privilege between them and the agreement of each party for the lawyer to share information obtained from either spouse with the other spouse.
A lawyer shall not reveal information protected by the attorney-client privilege under applicable law or other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraphs (b) and (c).
A safe rule. A lawyer treats all information gleaned in Medicaid planning representation as confidential unless written permission is obtained from the client(s) within in the engagement letter which is typically with communications with the client’s other advisors (CPA, financial advisor, etc.). Ability to speak with advisors is embodied with the engagement letter or us of a written release.
The permissive disclosure rule permits a law firm to reveal otherwise client protected information in several contexts that might arise in an Medicaid planning practice, without the client’s consent such as upon receiving a subpoena from the Commonwealth Attorney or IRS; defend against an ethical claim or professional malpractice suit; or to prevent a client committing a fraud on a bank or other financial institutions; and very importantly, to preserve the file in case it is needed after the lawyer disabled or dies;, and to provide a sense of security in having law firm personnel work on the file without staff violating a client’s confidences.
In any situation other than the ones above where attorneys may or must reveal confidential information, the attorney must have consent to make the disclosure.
Consent does not always have to be express. There are some situations where the client’s consent is implied. The admission of facts that are not in contention in litigation can be to the clients benefit as can admission of facts in negotiation.
To competently represent their clients’ interests, attorneys need to consult with the colleagues from time to time. This is allowable provided that the attorney makes sure they are revealing the absolute minimum of confidential information and has made sure the attorney they are seeking advice from does not have a conflict.
If the attorneys are working in the same firm the attorneys may disclose information regarding the representation unless the client has stated, they want the information to only be known by certain lawyers.
A. What is reasonable fee?
Lawyers charge hourly and flat fees. Flat fees offer the advantage of the client knowing from the beginning the cost. However, reasonable hourly billing is of course also ethical.
The client interview is an integral part of the representing a client to prepare the legal instruments to implement the Medicaid planning. Most lawyers request the client bring a financial statement or completed questionnaire to the first meeting. Client goals, wealth, family and other relevant information is gleaned from the interview with the client. A good faith estimate of the cost for the legal services is also provided once the lawyer understands the scope of the representation. The terms of the representation are embodied in an engagement letter. See Representative Engagement Letter, Exhibit 3.
Not all prospective clients become actual clients. The questionnaire and information from the prospective interview process triggers the attorney-client privilege; the lawyer can’t disclose what prospective clients reveal in confidence even if the lawyer never ends up representing them. This information may be scanned and be preserved consistent with your firm’s record’s retention policy.
Discuss with client; find common ground, consider compromise if the fee is disputed. Fees can be substantial to the client in Medicaid asset protection planning. If assess fee challenges client’s ability to pay propose reasonable payment schedule in engagement letter to lessen probability of fee dispute. This also aids in preventing a bar complaint. If a fee dispute is not settled, either party may commence a legal action.
The results obtained by the lawyer.” Id.
A lawyer may place a predispute arbitration clause within the engagement letter stating the forum and venue, e.g. American Arbitration Association in Fairfax County. Arbitration is viewed as quicker and less expensive for both parties than commencing a civil action. Absent a predispute arbitration clause in the engagement letter, agreement of the parties to mediate and arbitrate, either party may commence a civil action on breach of contract in the circuit court. When commencing a legal action, remember the client has a right to file a counter claim for malpractice, and may file a bar complaint when the client believes the lawyer’s conduct was unethical. At some point, litigation in the courts for Medicaid planning fees, depending upon the amount involved, can be throwing good money after bad, time consuming and stressful diverting attention from service of other ongoing client matters.
PRESENT: Lemons, C.J., Goodwyn, McClanahan, Powell, and Kelsey, JJ., and Russell and Millette, S.JJ.
OPINION BY v. SENIOR JUSTICE LEROY F. MILLETTE, JR.
desired to go to the RSPCA upon her death.
executed the will as drafted by Thorsen.
company, the will left only the tangible estate, not real estate, to the RSPCA.
Davis. Thorsen v. Boyle, Rec. No. CL09-718 (April 9, 2010) (unpublished).
amount of $603,409.90. Thorsen now appeals.
Thorsen that Code § 55-22 does not apply to the oral contract between Dumville and Thorsen.
However, we do not agree that this is fatal to the RSPCA’s claim.
absurdity.” Id. (internal citations omitted).
An immediate estate or interest in or the benefit of a condition respecting any estate may be taken by a person under an instrument, although he be not a party thereto; and if a covenant or promise be made for the benefit, in whole or in part, of a person with whom it is not made, or with whom it is made jointly with others, such person, whether named in the instrument or not, may maintain in his own name any action thereon which he might maintain in case it had been made with him only and the consideration had moved from him to the party making such covenant or promise.
RSPCA’s cause of action, and the RSPCA has no recourse.
the general rule was that, whether the contract was express or implied, by parol or under seal, or of record, the action must be brought in the name of the party in whom the legal interest was vested, and that this legal interest was vested in the person to whom the promise was made, and consequently that he or his privy was the only person who could sue in a court of law upon such contract.
Thacker v. Hubard, 122 Va. 379, 387, 94 S.E. 929, 931 (1918); accord, Cemetery Cons[ultants] v. Tidewater Fun. Dir., 219 Va. 1001, 1003, 254 S.E.2d 61, 62 (1979). However, “in contracts not under seal, it has been held, for two centuries or more, that any one for whose benefit the contract was made may sue upon it.” Thacker, 122 Va. at 387, 94 S.E. at 931 (emphasis in original).
that the oral nature of a contract limits a third-party beneficiary’s ability to sue upon it.
a common law action based on an oral contract made for his or her benefit, which remains intact.
would be to judicially amend the Statute of Frauds, an action we decline to take.
Neither the complaint in this case nor the final order invoke or rely on Code § 55-22.
belief that it prohibited oral contracts and no common law cause of action existed.
demurrer was properly overruled and proceed to the next assignment of error.
it standing as a third-party beneficiary of the attorney-client contract.
Contracts § 37:1, at 14-15 (Richard A. Lord ed., 4th ed. 1990 & 2013 rev.); see supra Part II.A.
beneficiary, the right to enforce directly the promise from which he derives his interest.” Id.
at 134 (Richard A. Lord, ed., 4th ed. 2013) (quoting Seaver v. Ransom, 120 N.E. 639 (N.Y.
Beyond all doubt, the general rule is that the obligation of the attorney is to his client and not to a third party, and unless there is something in the circumstances of this case to take it out of that general rule, it seems clear that the proposition of the defendant must be sustained. . . . . Analogous cases . . . show to a demonstration that it is not every one who suffers a loss from the negligence of another that can maintain a suit on such grounds. On the contrary, the limit of the doctrine relating to actionable negligence, says Beasley, C. J., is, that the person occasioning the loss must owe a duty, arising from contract or otherwise, to the person sustaining such loss.
the privity rule lies there as well.
Needham v. Hamilton, 459 A.2d 1060, 1062 (D.C. 1983); Passell v. Watts, 794 So.2d 651, 65253 (Fla. Dist. Ct. App. 2001); Blair v. Ing, 21 P.3d 452, 462 (Haw. 2001); Ogle v. Fuiten, 466 N.E.2d 224, 226 (Ill. 1984); Walker v. Lawson, 526 N.E.2d 968, 968 (Ind. 1988); Schreiner v. Scoville, 410 N.W.2d 679, 682 (Iowa 1987); Woodfork v. Sanders, 248 So.2d 419, 425 (La. Ct. App. 1971); Pizel v. Zuspann, 795 P.2d 42, 51 (Kan. 1990); Mieras v. DeBona, 550 N.W.2d 202, 211 (Mich. 1996); Francis v. Piper, 597 N.W.2d 922, 924 (Minn. Ct. App. 1999); Donahue v. Shughart, Thomson & Kilroy, P.C., 900 S.W.2d 624, 629 (Mo. 1995); Simpson v. Calivas, 650 A.2d 318, 322 (N.H. 1994); Leak-Gilbert v. Fahle, 55 P.3d 1054, 1062 (Okla. 2002); Hale v. Groce, 744 P.2d 1289, 1292 (Or. 1987); Guy v. Liederbach, 459 A.2d 744, 746 (Pa. 1983); Fabian v. Lindsay, 765 S.E.2d 132, 141 (S.C. 2014); Persche v. Jones, 387 N.W.2d 32, 35-36 (S.D. 1986); Powers v. Hayes, 776 A.2d 374, 375 (Vt. 2001); Auric v. Continental Casualty Co., 331 N.W.2d 325, 328 (Wis. 1983); Stangland v. Brock, 747 P.2d 464, 467-68 (Wash. 1987). See also Riser v. Livsey, 227 S.E.2d 88, 89 (Ga. Ct. App. 1976); Hargett v. Holland, 447 S.E.2d 784, 786 (N.C. 1994); Jaramillo v. Hood, 601 P.2d 66, 67 (N.M. 1979) (recognizing a cause of action but finding that the statute of limitations had run).
There is a critical difference between being the intended beneficiary of an estate and being the intended beneficiary of a contract between a lawyer and his client. A set of examples will illustrate the point: A client might direct his lawyer to put his estate in order and advise his lawyer that he really does not care what happens to his money except that he wants the government to get as little of it as possible. Given those instructions, a lawyer might devise an estate plan with various features, including inter vivos trusts to certain relatives, specific bequests. . . [and] many people and institutions might be beneficiaries of the estate, but none could fairly be described as beneficiaries of the contract between the client and his attorney because the intent of that arrangement was to avoid taxes as much as possible. By contrast, a client might direct his lawyer to put his estate in order and advise his lawyer that his one overriding intent is to ensure that each of his grandchildren receive one million dollars at his death and that unless the lawyer agrees to take all steps necessary to ensure that each grandchild receives the specified amount, the client will take his legal business elsewhere. In this second example, if the lawyer agrees to comply with these specific directives, one might fairly argue each grandchild is an intended beneficiary of the contract between the client and the lawyer.
contract of which they were intended beneficiaries,” they had no claim. Id.
132, 140 (S.C. 2014) (quoting Guy v. Liederbach, 459 A.2d 744, 747 (Pa. 1983)).
Bank of Am. v. Musselman, Bowling, Franklin & Co., 240 F.Supp. 2d 547, 553-54 (E.D. Va.
2003) (“[P]rivity of contract is required where, as here, a non-party to a contract for . . .
2 While it has become commonplace for American courts to adopt the language that the third-party beneficiary relationship establishes privity, in that it implies the necessary obligation, it is more precise to state that the relationship dispenses with the need for strict privity. 13 Williston on Contracts § 37:1, at 24 (Richard A. Lord ed., 4th ed. 1990 & 2013 rev.) (citing Anderson v. Rexroad, 266 P.2d 320 (Kan. 1954)).
526 N.E.2d 968, 968 (Ind. 1988); Woodfork v. Sanders, 248 So.2d 419, 425 (La. Ct. App.
459 A.2d 744, 746 (Pa. 1983); Fabian v. Lindsay, 765 S.E.2d 132, 140 (S.C. 2014); Stangland v.
from Copenhaver until this day.
part of the obligations assumed by the contracting parties that a court will permit him to sue on 3 Cf. Restatement (Third) of the Law Governing Lawyers, § 51 (2000) (describing the circumstances giving rise to a duty of care when professional negligence lies in tort, yet analogous to the reasoning underlying a duty to third-party nonclient beneficiaries when professional negligence sounds in tort but arises from a contractual agreement).
that contract. Radosevic v. Virginia Intermont College, 651 F.Supp. 1037, 1038 (W.D. Va.
In the complaint, the RSPCA alleges that, “In engaging Mr. Thorsen’s legal services . . .
RSPCA in the event that her mother predeceased her” before she executed the will.
set forth in the successful Copenhaver hypothetical.
and definitely intended” third-party beneficiary as a matter of law. We disagree.
was a “clearly and definitely intended beneficiary” to the contract.
“clearly and definitely intended beneficiary” of the contract and not an incidental beneficiary.
which the legatee was the residuary beneficiary); Guy v. Liederbach, 459 A.2d 744, 746-47 (Pa.
who were unintentionally omitted residual beneficiaries could bring a claim).
is a “clearly and definitely intended beneficiary” of the contract to draft the will.
contract/third-party beneficiary theory); Passell v. Watts, 794 So.2d 651, 652 (Fl. Dist. Ct. App.
will is a third-party beneficiary of the contract to draft the will is a fact-intensive inquiry.
actionable claim is an inquiry properly left to the finder of fact.
Court reviews do novo. Van Dam v. Gay, 280 Va. 457, 460, 699 S.E.2d 480, 281 (2010).
In every action for which a limitation period is prescribed, the right of action shall be deemed to accrue and the prescribed limitation period shall begin to run from the date the injury is sustained in the case of injury to the person or damage to property, when the breach of contract occurs in actions ex contractu and not when the resulting damage is discovered, except where the relief sought is solely equitable or where otherwise provided under Code § 8.01-233, subsection C of § 8.01-245, §§ 8.01-249, 8.01-250 or other statute.
completing his legal services, on April 16, 2003 (citing MacLellan v. Throckmorton, 235 Va.
expired three years later, on April 16, 2006. We disagree.
463, 699 S.E.2d at 482.
dispositions.” Id. (citing Schilling v. Schilling, 280 Va. 146, 149, 695 S.E.2d 181, 183 (2010)).
action prior to the death of the testator.
enforce the contract. 13 Williston on Contracts § 37:55, at 354 (Richard A. Lord ed., 4th ed.
the time of the injury.” Van Dam, 280 Va. at 463, 699 S.E.2d at 482 (emphasis added).
place at the time the divorce decree was entered. In each instance, the statute of limitations on 4 We note that the primary purpose of Code § 8.01-230 as to contracts is to avoid creating a so-called “discovery rule,” and this reading of the two statutes together in no way frustrates that purpose. The requirement of the cause of action is merely that one sustains injury, not that it be known.
Courts which have addressed this issue seem to agree that the cause of action accrues as [sic] the testator’s death, not at the time of the drafting of, or signing of, the will. This is the time when the attorney’s negligence becomes irremediable and the impact of the injury occurs, courts recognize; before a testator’s death, the potential beneficiaries possess no recognized legal interest in the estate.
v. Continental Casualty Co., 331 N.W.2d 325 (Wis. 1983)).
we must affirm the trial court’s denial of the plea in bar premised on the statute of limitations.
RSPCA was a “clearly and definitely intended” beneficiary.
conclude that, for Dumville, an overriding purpose of the contract was to benefit the RSPCA.
[I]t was the clear intent of Alice and the intent in my drafting, to make a full and complete conveyance of Alice’s estate to her mother if she survived Alice, and if not, a full and complete bequeath/conveyance of all of Alice’s entire estate to the RSPCA. Moreover, I had no idea Alice had any relative other than her mother, and did not become aware of Ms. Boyles [sic] until sometime after [Dumville’s mother] died.
there is error in the drafting, the RSPCA is named specifically in the will instrument.
intended the RSPCA to be a third-party beneficiary of the contract.
agreement and the obligation to benefit the parties in the will.
5 Here, it is equally important to note what we do not decide today: while naming may in some cases support intention, failure to name does not necessarily indicate lack of intention, such as in the case of an intentional bequest to the substantially defined but open class of “my children,” a term invoked in many wills to include after-born children.
became aware of the directives of the client and agreed to undertake the obligation.
For the aforementioned reasons, we will affirm the judgment of the circuit court.
Assembly, not this Court. Therefore, I dissent.
“Virginia has adopted the strict privity doctrine in legal malpractice cases.” Johnson v.
adversarial system of justice.’” Id. at 625, 692 S.E.2d at 243 (quoting MNC Credit Corp. v.
client for any damage sustained by him by the neglect of his duty as such attorney.’” Glenn v.
1 The majority concludes that the “holding” in Johnson is “inapplicable” because the testamentary beneficiary pursued her claim as a beneficial owner under Code § 8.01-13 and “never argued that she was an intended third-party beneficiary.” Yet, the majority’s conclusion ignores the ratio decidendi for the Court’s holding in Johnson – the common law requirement of the existence of an attorney-client relationship to maintain a legal malpractice action and the underlying policy of such requirement, which also precludes assignment of legal malpractice claims.
any other legal malpractice actions.
2 The statute provides that “[a]n action for damages, including future tax liability, to the grantor, his estate or his trust, resulting from legal malpractice concerning an irrevocable trust shall accrue upon completion of the representation in which the malpractice occurred.” Code § 64.2-520(B) (emphasis added). “An action for damages pursuant to this section in which a written contract for legal services existed between the grantor and the defendant shall be brought within five years after the cause of action accrues” and “[a]n action for damages pursuant to this section in which an unwritten contract for legal services existed between the grantor and the defendant shall be brought within three years after the cause of action accrues.” Id. 3 Despite the majority’s implication otherwise, the Court in Ward v. Ernst & Young, 246 Va. 317, 435 S.E.2d 628 (1993), made no comparison between accountants and attorneys in its analysis of the third-party beneficiary claim in that case. In fact, the Court did not discuss the privity requirement in legal malpractice actions or even cite to Copenhaver in the context of its discussion of that claim.
privity requirement in actions for legal malpractice in this context. See, e.g., Robinson v.
reason for so extending attorney liability”); Noble v. Bruce, 709 A.2d 1264, 1275 (Md. Ct. App.
attorney liability to nonclients arising out of will drafting or estate planning.”); Schneider v.
and preserves an attorney’s loyalty to the client.”); Barcelo v. Elliott, 923 S.W.2d 575, 579 (Tex.
owes no professional duty of care to persons named as beneficiaries under the will or trust.”).
In most cases where a defect renders a will or trust invalid, however, there are concomitant questions as to the true intentions of the testator. Suppose, for example, that a properly drafted will is simply not executed at the time of the testator’s death. The document may express the testator’s true intentions, lacking signatures solely because of the attorney’s negligent delay. On the other hand, the testator may have postponed execution because of second thoughts regarding the distribution scheme. In the latter situation, the attorney’s representation of the testator will likely be affected if he or she knows that the existence of an unexecuted will may create malpractice liability if the testator unexpectedly dies.
The Court stated, “we are unable to craft a bright-line rule that allows a lawsuit to proceed where alleged malpractice causes a will or trust to fail in a manner that casts no real doubt on the testator’s intentions, while prohibiting actions in other situations.” Barcelo, 923 S.W.2d at 578.
and divided loyalties during the estate planning process.” Shoemaker, 887 N.E.2d at 1171.
over uncertain and unlimited liability as well as the effect on the availability of legal services.
when the alleged legal malpractice consists of a single, isolated act, the statute of limitations 5 In contrast, in the one instance in which the General Assembly has dispensed with the requirement of privity to permit a legal malpractice action by a nonclient, the General Assembly has provided that the action “shall accrue upon completion of the representation in which the malpractice occurred.” Code § 64.2-520(B) (emphasis added) (permitting action for damages to the grantor, the estate, or the trust, by the grantor’s personal representative or the trustee if such damages are incurred after the grantor’s death).
potentially lengthy, period of time after the preparation of such documents.
competing policy concerns raised by the extension of legal malpractice standing to nonclients.
which courts are ill-equipped to balance, . . . . [o]n the other hand, the legislative machinery is specially geared to the task. A legislative change in the law is initiated by introduction of a bill which serves as public notice to all concerned. The legislature serves as a forum for witnesses representing interests directly affected by the decision. The issue is tried and tested in the crucible of public debate. The decision reached by the chosen representatives of the people reflects the will of the body politic. And when the decision is likely to disrupt the historic balance of competing values, its effective date can be postponed to give the public time to make necessary adjustments.
Bruce Farms, Inc. v. Coupe, 219 Va. 287, 293, 247 S.E.2d 400, 404 (1978).
common law requirement of privity in legal malpractice actions is now abolished in Virginia.
unlimited liability will undoubtedly deter attorneys from offering estate planning services.
6 Although today’s opinion is rendered in the context of an action resulting from services provided in connection with a will, the majority’s discussion, as well as its citation to the Restatement (Third) of the Law Governing Lawyers, § 51 (2000), signals the Court’s intention to abolish the requirement of privity in all legal malpractice actions.
You have presented a hypothetical in which a client comes into the lawyer's office seeking legal assistance regarding the client's plan to render herself insolvent by transferring her only asset from sole ownership to ownership with her husband in the form of tenants by the entirety with survivorship. The transfer would not include any consideration. The client clearly expresses to the attorney that the client's purpose in making this conveyance is to place her one asset outside the reach of her creditors and, thereby, rendering herself insolvent. Your hypothetical presumes that the conveyance would be void under the Fraudulent Conveyance Act, Va. Code §55-80, and voidable under the Voluntary Conveyance Act, Va. Code §55.81.
This committee has previously applied this test to a number of situations. In most of those situations, the committee concluded that the question rested on a substantive legal question outside the purview of the committee. For example, in LEO 782, the committee addressed whether it was permissible for an attorney to tell a spouse separated from, and divorcing, her husband to enter the jointly owned home, now occupied solely by the husband, for the purposes of removing items of personal property. The committee concluded that whether such entry was legal was outside the purview of the committee; the committee just noted that if the conduct was illegal, the attorney could not advise the client to do it. See, LEO 782. The committee took a similar approach in several subsequent opinions. See, LEO 1219 (regarding whether an attorney could arrange for one client to loan a second client money for litigation expenses in light of the statutes addressing champerty and maintenance), LEO 1222 (regarding whether an attorney could assist in a settlement involving secrecy about criminal acts in light of the statutes addressing misprision of a felony), and LEO 1227 (regarding whether an attorney could assist potential parents in certain steps toward a private adoption). In each of these LEOs, the committee declared that a substantive legal question regarding the legality of particular conduct was outside the purview of the committee and concluded only that should the attorney determine the conduct in question to be illegal, he should not counsel his client to take that action.
The committee concludes that the present hypothetical presents a similarly limited issue within the committee's purview. A definitive conclusion as to whether the attorney in this hypothetical can assist this client without violating Rule 1.2(c) would require an analysis of whether a transfer described by Va. Code §§55.80 and/or 55.81 constitutes fraud.(1) Interpretation of those statutes is outside the purview of this committee. Accordingly, this committee must limit its conclusion regarding this matter by opining only that if this attorney determines that the proposed transfer constitutes fraud, he cannot recommend that transfer, nor assist his client in that conveyance. Rather, if the attorney does determine that the proposed transfer constitutes fraud, Rule 1.2(c) would only permit the attorney to explain the legal consequences of the client's proposal, namely, that the transfer would be void with regard to those creditors this client wishes to evade.
This opinion is advisory only, based only on the facts you presented and not binding on any court or tribunal.
1The committee notes that the Rules of Professional Conduct use a unique definition of "fraud." "Fraud" is defined in the Rules as "conduct having a purpose to deceive and not merely negligent misrepresentation or failure to apprise another of relevant information."
This is to confirm that you have retained us to represent you with respect to your estate plan.
The flat fee is $____,000 for assessing your estate planning needs, designing and drafting your trust-based plan, explaining it to you, and overseeing the execution of the documents.
If you fail to cooperate in our scheduling process or to provide requested information, we reserve the right to bill hourly for our time to refresh ourselves with your file and matter, re-assemble plan documents, and take other action to timely complete our services.
We deliver our services at a reasonable cost, and rely on your cooperation in scheduling the delivery meeting, funding meetings and other conferences with us to timely implement your estate plan as well as information and documents necessary for us to do our job. Substantial delays in scheduling and failure to provide necessary information causes and increase in cost and reduces our ability to maintain current pricing levels.
In extreme cases, we reserve the right to withdraw our representation should you fail to cooperate in providing requested information or in timely scheduling the presentation ceremony, funding meeting, or any other conference. Fees are payable in the case of our withdrawal as set forth in the section Fees Payable In The Case Of Discharge or Withdrawal of Representation.
Factors affecting my design recommendations to you and the flat fee include, among others, whether you have a taxable estate, the classes of assets you own, details of your life and family circumstances, your estate planning goals, and the time it takes to draft, present, and explain your estate plan to you.
If you omit material information affecting your estate plan or substantially change your goals after our planning conference or request explanations outside our normal course for similar plans, I am happy to undertake the additional work for you at my prevailing hourly rates and the fees will be adjusted upward.
If you choose to discharge us for any reason, or we withdraw from representing you, you agree to compensate us for all services rendered through the effective date of discharge or withdrawal at our agreed-upon flat rates referenced within, or $ __00 per hour, whichever is less.
The legal instruments we prepare may be complex to read and understand. Collective experience has shown that client review of drafts before reviewing them with counsel may lead to confusion and often delay in implementing the plan.
Therefore, we thoroughly review the plan documents with you at the presentation and signing ceremony at which time we explain each document generally article by article and as thoroughly as you desire. Do not be passive in this process, it is your plan. In signing this agreement, you affirmatively represent that you will ask questions when in doubt as to the meaning of any part of the presentation you don’t understand. I will endeavor to make non-design changes you request during the presentation prior to your signing and provide a trust summary and list of fiduciaries to you prior to the delivery meeting for your review.
If you desire to review draft documents prior to the delivery meeting, ask me and I will provide them to you. The remainder of your fee is payable prior to the delivery of such drafts and you alone are responsible for an unsigned estate plan caused by delay in your not promptly scheduling a delivery meeting.
With my presentation protocol, the duty to read every instrument, every page, thoroughly, occurs with most clients after the delivery meeting. By signing this engagement agreement, you agree you will read and review the legal instruments thoroughly, and timely notify me if any do not conform to your estate planning objectives or if you don't understand any part of it.
Remember, no attorney is error-proof. Your thorough review is important to ensure that I have followed your directions and objectives and that we have properly recorded all essential information. Also, despite our best efforts, from time to time, glitches, such as typographical errors, occur in lengthy documents. Any changes made due to our error you timely notify me of will be made without cost to you.
Also, this is a window of opportunity for you to timely notify me of any minor, non-substantive word processing changes that are not design changes you wish to make.
You are best served when your lawyer can coordinate with your non-lawyer professionals, e.g. accountants, financial advisors, insurance agents, banking institutions, and other advisors. We do not disclose any non-public personal information about you to anyone except as permitted by law, or as authorized by you.
By signing this letter you authorize me to disclose non-public personal information to unrelated third parties, such as your financial advisor, insurance professional, stockbroker, stock transfer agent, CPA, banker or other similar professional any information regarding you to aid in the coordination and implementation of your estate, financial and retirement planning and to government authorities in connection with any tax returns prepared by us, supervised by us or at my direction.
We restrict access to non-public personal information about you to those agents of my law firm who need to know the information in order to provide legal services to you. We maintain physical, electronic, and procedural safeguards that comply with Federal Regulations and our rules of ethics to guard your non-public personal information.
Joint Representation and Confidentiality for Married Couples [If Applicable].
It is common for a husband and wife to employ the same lawyer to assist them in planning their estates. You have taken this approach by asking me to represent both of you in your planning.
We are entering into this representation with the understanding that you have a stable marriage, commonly agreed to estate planning objectives, including but not limited to, choice of trustees and the distribution of assets at death, and can legally be represented by my law firm. If this is not the case, please promptly inform me.
It is important that you understand that because I will be representing both of you, each of you is considered our client. By signing this agreement, you waive a conflict of interest in this joint representation to the extent one may exist.
We will not treat any information one of you provides to us as confidential from the other. If we withhold information given to us by one of you, it destroys the effectiveness of our representation of the client from whom that information is withheld. Accordingly, any information we receive from one of you pertaining to your estate plan will be available to the other spouse.
We may, from time to time, make suggestions that one or the other of you perceives to be inimical to your interests. Should that occur, either of you would be free to retain another lawyer to complete the part of the estate plan pertaining to you.
Joint Representation and Confidentiality for Unmarried Couples [If Applicable].
It is common for two persons, or partners, irrespective of sexual orientation to live with each other unmarried and ask the same lawyer to assist them in planning their estates. You of course have the right to separate lawyers instead of a joint representation. You have taken the joint representation approach by asking me to represent both of you in your planning.
We are entering into this representation with the understanding that you have a stable relationship and are in agreement of your common estate planning objectives, including but not limited to, choice of trustees and the distribution of assets at death, and can legally be represented by my law firm. Unmarried couples do not at this point in time enjoy the same tax benefits, such as the unlimited marital deduction, as married couples.
It is important that you understand that because I will be representing both of you, each of you is considered our client. By signing this agreement, you waive a conflict of interest in this joint representation and waive any confidentially as between the two partners.
You have directed us and we shall comply in sharing all information one of you provides to us as available to the other partner. If we withhold information given to us by one of you, it destroys the effectiveness of our representation of the client from whom that information is withheld. Accordingly, any information we receive from one of you pertaining to your estate plan will be available to the other spouse. Understand we may, from time to time and where justified by law, inform one of you as to legal recommendations that the other may view as inimical to their interests. Should that occur, either of you would be free to retain another lawyer to complete the part of the estate plan pertaining to you.
We do not anticipate a disagreement to arise between us. However, should a disagreement occur between us, both parties agree to resolve it before the Virginia Bar Associations Fee Dispute Resolution Program through mediation and if mediation fails its arbitration.
Should either party not sign the VBA’s Agreement to Mediate and if that fails Arbitrate, the dispute shall be arbitrated before the American Arbitration Association in Fairfax Virginia.
A photocopy of this retainer shall have the same force and affect as any original, and may be used for any purpose the original could be used. If you have any questions on the terms of our engagement, call me and please do not hesitate to promptly ask them. We are honored to represent you in this important matter.
 “Failure to comply with an obligation or prohibition imposed by a Rule is a basis for invoking the disciplinary process. Although interpretation of similar language in the ABA Model Rules by other states' courts and bars might be helpful in understanding Virginia's Rules, those foreign interpretations should not be binding in Virginia.” Rules Preamble.
 Exception to Client Confidentiality Rules, see Rule 1.6 Comment 5 a.
 Fraudulent Conveyance Act, Va. Code section 55-80 at https://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-80. For an excellent review of the substantive law of fraudulent conveyances see McBeth and Davis, Bulls, Bears, And Pigs: Revisiting the Legal Minefield of Virginia Fraudulent Transfer Law, University of Richmond Law Review (2011) at http://lawreview.richmond.edu/wp/wp-content/uploads/2012/01/McBeth-Davis-4615.pdf .
 Voluntary Conveyance Act, Va Code 55.81 at https://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-80.
 See generally Rule 1.14 and its Comments.
 Rule 1.7(b) (1-4), Rule 1.7(b) (1-4).
 Rule 1.6 (b); practical exceptions to 1.6(a) prohibitions include: compliance with court orders, establishing a claim/defense for counsel regarding the representation, protecting third parties from fraud by the client, protecting client’s interest in event of disability or death of the lawyer and to facilitate law office management.
 Rule 1.18 (b)Even when no client-lawyer relationship ensues, a lawyer who has had discussions with a prospective client shall not use or reveal information learned in the consultation, except as Rule 1.9 would permit with respect to information of a former client.

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