Death and Taxes Blog

The duties that attorneys owe their clients are set forth in the Illinois Supreme Court Rules. They can be found here, and include things like:

the duty of competence;

the duty of confidentiality; and

the duty to avoid conflicts of interest.

What about duties that a client owes his attorney? I guess those vary by attorney. For instance, I won't put up with a verbally abusive client -- if you start swearing at me, and/or telling me I'm an idiot, I will fire you. But maybe that's just me.

If you look at disciplinary complaints against attorneys, you usually see that "failure to communicate" is at or near the top. That usually means an attorney who doesn't return calls in a timely manner (or doesn't return calls at all), an attorney who doesn't keep her client up to date on the status of their case.

But I think "failure to communicate" goes both ways. An attorney can't represent your interests if he doesn't know the whole story, and this is particularly true in estate planning and probate. And I'd say that this is a really important client "duty" that sometimes is ignored. Examples (from real cases):

Estate Planning. You hire me to do your estate planning, and we set up a living trust. You then ask me to prepare a deed, transferring your house into your living trust. You give me a copy of an old deed, showing you on title as sole owner. But you don't give me a copy of a newer deed, in which you gave 1/2 of your house to your son.

Probate. You hire me to open a probate estate for your mother. As part of the proceeding, we prepare an affidavit listing your mother's heirs (her children). But you fail to mention the three children your mother adopted one year before her death.

Probate Litigation. You hire me to file a claim against an estate. You claim that, for two years, you took care of an elderly woman who (you said) never got around to paying you. I file a claim on your behalf. During discovery - 6 months after you hired me - you disclose for the very first time that the elderly woman "made a gift" to your children of $150,000 right before she died.

These problems are probably bigger if you (like me) are a sole practitioner. Many of my clients view us as a less-expensive alternative to a big law firm (which I suppose we are -- not cheap, but cheaper). But that usually means we're spending less time on your matter, and relying on you to provide correct information to us. If that line of communication breaks down and we're working with bad information, that's a major problem.

I was recently asked by a 3rd year law student for some advice on how to succeed upon graduation. Basically, what I told her can be summed up in three words: "find your niche."

I realize that this isn't a revolutionary idea, but I think too many young attorneys don't realize the importance of marketing yourself. What unique thing do YOU as a young attorney bring to the table? It can't just be intelligence and hard work -- most attorneys have those qualities.

So how do you find your niche? The easiest way is through your existing connections. If you're married to a doctor, and hang out with him and his other doctor friends, then consider areas of the law that would allow you to make medical professionals your client base.

Of course, not everyone has existing connections. In that case, you need to try to find something to level the playing field. In my experience, one thing that works well is becoming an expert with respect to some new development in the law. That's a big benefit because, with new developments, you are not at a disadvantage in terms of experience. When a new law passes or a new case comes down, you as a first year associate may know just as much about it as a partner who's been practicing for 30 years. Three examples:

1. Read and summarize the new Citizens United Supreme Court case, and write an article for your local paper about what it REALLY means.

2. Your state is legalizing marijuana for medicinal purposes. Totally familiarize yourself with all of the rules and regulations relating to setting up a marijuana dispensary, and advertise yourself as someone who can help clients "get legal."

3. Learn the ins and outs of the Trouble Asset Relief Program (TARP), so you can speak at seminars on the topic.

Earlier this year, I decided to try and start a side business. The business related to my law practice, and the goal was to solve a problem: so-called "orphan" Wills. Some attorneys retain their clients' original Wills and other estate planning documents. But what happens if the attorney loses contact with the client, or the attorney dies and the documents pass to some other attorney? Destroying old documents isn't really an option, since you run the risk of destroying a valid Will. But Illinois didn't have an official Will Depository (as some other states do).

My business idea was to set up a private Will Depository. I did my research, hired a web designer, put together procedures, and started to work on www.IllinoisWillVault.com. But I made (at least) one big mistake: I guessed (incorrectly) that our current recession -- and Illinois's deficit problem -- would make legislation in this area unlikely. I was wrong, as we now have Public Act 096-137, which becomes effective on 1/1/2010. This act allows for the filing of an "orphan" Will (the creator of which cannot be located) with the Illinois Secretary of State's office.

Oh well.

Professor Beyer has this post about Judge Sotomayor's decisions in a few cases affecting trusts and estates. One case in particular is of interest to me, as it relates to a discussion I had with David Giacalone (detailed here) a few years ago about whether personal representatives should be able to handle a probate without hiring an attorney (that is, pro se). Judge Sotomayor's take is the same as I've heard in the Cook County probate court:

“[A]n administratrix or executrix of an estate may not proceed pro se when the estate has beneficiaries or creditors other than the litigant.”

In addition to representing parties in probate and probate litigation proceedings, I also am a mediator. I offer mediation services at my regular hourly rate ($275, payable equally by the parties), as a (hopefully) quicker, less expensive alternative to full-fledged litigation.

I've taken the leap to Twitter, even though I'm fairly suspicious about such things. You can find me here, if you're interested (and believe you me, I'll understand if you aren't). I occasionally tweet about estate planning and probate, although it's difficult to say anything of substance in 140 characters, and my mind wanders to topics such as family, film, architecture, the piano, genealogy, and baseball (to name a few). I do often include links to new blog posts.

Schoenmeyer Law Office, P.C., my firm, is also on Facebook -- here.

Here is an interesting summary of a California legal malpractice case, Chang v. Lederman. The case involved an attorney named Gregory Lederman, his client Raphael Schumert, and Mr. Schumert's girlfriend (later wife), Myung Chang.

Chang alleges in her complaint that in February, 2005, Schumert instructed Gregory Lederman, as his attorney, to revise the trust to provide for distribution of the entire estate to Chang, with the exception of $250,000 to be distributed to his son. According to the complaint, Lederman refused to do the amendment stating that an Etti Hadar would sue Schumert and also advised that a psychiatric evaluation be done before any changes be made to his estate plan. Schumert died on March 17, 2005.

Estate planning is a big area for legal malpractice claims. Many of these claims are brought by beneficiaries of an individual's estate plan (as the article mentions, the privity of contract required in other malpractice actions is relaxed for an action against an estate planner).

It's hard for me to fault Mr. Lederman here. It's one thing to say "I as beneficiary am receiving less because you the attorney screwed up my husband's Will." But Ms. Chang appears to be saying "I as beneficiary am receiving less because you the attorney weren't sure if my husband was competent to sign his Will." Ms. Chang is essentially asking Mr. Lederman to put her interests above the interests of his client, Mr. Schumert. Put another way (in the article):

To extend liability in favor of a beneficiary who alleges that the testator meant to provide for him would place counsel in the awkward position of being sued for doing what a testator had actually asked him to do.

On a slightly different topic, the words "psychiatric evaluation" caught my eye in this article. I'm not a doctor in real life, nor do I play one on TV. But I do view it as my duty to make sure, in my own possibly clumsy way, that a client seems competent to execute his or her estate plan.

Let me give an example: a few weeks ago I met with a potential client. The meeting took place at his niece's home, where he lives. The niece was also the one who set up the meeting. The potential client was in bed for the entire meeting, seemed disoriented, and didn't seem to know about or be interested in signing a Will. While he seemed to want to leave his property to his niece (once I explained his options to him), I didn't feel confident that he understood what he owns and what would happen to that property at his death. So, I decided to pass on this potential client. I am certainly not saying that the niece did anything wrong, or that the potential client was totally incapable of signing a Will. Rather, I was saying that I wasn't going to be the one to draft it.

Last week I wrote (here) about the question of "who's the client?" in the estate planning context. As one reader pointed out to me in an e-mail, this issue also arises in the estate administration or probate context.

Let's say that you are approached by an individual who is named as Executor in the Will of John Smith. Do you as attorney represent:

-the Executor?
-the Estate of John Smith?
-the beneficiaries?
-some combination thereof?

This can be a tricky question to answer -- most model rules of professional conduct were not written with estate planning or probate in mind. However, The American College of Trust and Estate Counsel (ACTEC) publishes commentaries to these rules. Here is what ACTEC has to say on this issue (the emphasis is mine):

A minority of cases and ethics opinions have adopted the so-called entity approach under which the fiduciary estate is characterized as the lawyer's client. However, most cases and ethics opinions treat the fiduciary as the lawyer's client and the beneficiaries as persons to whom the lawyer owes some duties. See ACTEC Commentaries on MRPCs 1.2 (Scope of Representation), 1.4 (Communication), 1.6 (Confidentiality of Information) and 1.7 (Conflict of Interest: General Rule). The lawyer and the fiduciary, following full disclosure by the lawyer, may agree that the fiduciary estate and not the fiduciary shall be the lawyer's client. Such an agreement may significantly affect the extent of the lawyer's duties to the fiduciary, including the duty of confidentiality. However, such an agreement may not limit the duties that the lawyer or the fiduciary otherwise owe to the beneficiaries of the fiduciary estate.

My engagement letter and other correspondence makes it clear that the fiduciary is my client, but I also make the fiduciary consent to my reporting of any wrongdoing by the fiduciary. Still, this may not be a perfect situation, as my e-mailer points out. If there is a problem with the fiduciary, then the beneficiaries have to pay twice: they pay the fiduciary's attorney, and then they hire their own attorney to go after the fiduciary.

One of the cases mentioned at the ethics seminar I attended yesterday involves an Illinois attorney named Karris A. Bilal. Mr. Bilal was facing disciplinary action for a number of reasons. One of the reasons involved his actions with respect to his father's wife, Rachell, and Rachel's aunt, Georgia Hodges. From the ARDC Review Board's Decision:

... Bilal drafted a separate document, a Durable Power of Attorney (2004 DPOA). Bilal gave the unexecuted 2004 DPOA to Rachell, who had it executed on June 30, 2004. The 2004 DPOA gave Rachell broad powers to deal with Hodges's property, including the power to make gifts of Hodges's property and to sell real estate owned by Hodges. This power expressly included the house in which Hodges was living, which was being sold....

Bilal also prepared a living trust, similarly dated June 30, 2004, in which Hodges appointed Rachell as trustee. Rachell signed this document for Hodges pursuant to the power of attorney. Hodges's property was placed in the trust. Under the terms of the trust, the trustee was to pay the grantor any trust income or principal the grantor requested during her lifetime. Upon the grantor's death, the trustee was to give the grantor's tangible personal property to charity and distribute the remainder of the trust in equal shares to Hodges's brothers and sisters, Rachell, and Rachell's son.

Bilal also prepared a warranty deed for the sale of Hodges's home. Hodges signed the deed on July 1, 2004. Hodges was not present at the closing. Rachell signed Hodges's name to the documents signed at the closing. Bilal represented the seller at the closing and received attorney fees of $5,000. The house was sold for $240,000. Bilal did not advise Rachell concerning the proceeds of the sale of Hodges's house.

The crux of the problem here is this:

Bilal did not meet with Hodges before preparing the 2004 DPOA, the trust, or the deed. He did not attempt to determine whether Hodges had capacity to sign those documents or whether doing so was in her best interests. Other evidence presented at hearing, including testimony from Dr. Veres, indicated that Hodges had dementia as of at least January 2003 and would not have been competent to sign the documents. Bilal did not give Hodges any advice concerning the documents.

The issue goes to what I was saying yesterday. Who's the client? It should have been Hodges, but Mr. Bilal acted as though it was Rachell. For that reason, and others, Mr. Bilal is suspended from practicing law for 18 months.

I was at a seminar today on ethical considerations in estate planning. One of the things I noticed was how often an ethical dilemma starts because the attorney doesn't know (or doesn't keep in mind) the identity of the client. Some examples:

1. Joint representation (husband and wife): In most cases, they are BOTH the client, even if one of them is your primary contact. And that should mean that there are no secrets here -- if John and Jane Adams come to see you for estate planning, and John pulls you away and tells you "secretly draft my Will to leave everything to my mistress," you have a duty to inform Jane (YOUR CLIENT) of John's comment.

2. Multiple-generation representation: Maybe you represent mom and dad, and one or more of their grown kids and their spouses. Just remember that they are ALL your clients, and you can't favor one set of them (usually mom and dad) over the others.

3. The third party: Son or daughter calls you. "I want you to do a Will for mom." Who's your client? NOT son or daughter. It's mom, and you don't do it unless it's what mom wants, and you can assure yourself that mom is competent and isn't being unduly influenced.

4. Same as above, but son or daughter are paying you. Who's your client? It's still mom -- it doesn't matter who's paying you.

I accept contingent fee cases in the probate context, in a couple of different situation:

1. Where a client wishes to contest the validity of a Will; or

2. Where a client has a potential claim against an estate.

In these cases, my fee -- instead of being charged hourly at $225 per hour -- is 30% of whatever I am able to collect from the estate for my client.

Is a contingent fee representation right for you? That's up to you to decide, just as it's up to me to decide whether such a representation makes sense for ME in any given case. The biggest "pitfall" to a contingent fee representation for the attorney is the risk that I perform hundreds of hours of work on your behalf, and receive nothing. The biggest pitfall for the client is that I settle the case quickly, and receive much more than I would have received if I had been paid hourly.

In most probate cases, I represent the personal representative (executor or administrator). However, I'm seeing a big increase in the number of beneficiaries who want to hire me to represent them in connection with a probate estate.

Why would you, as a beneficiary, want an attorney? Just to make sure that your rights are protected, and that you understand the process. Keep in mind that, while the personal representative's attorney may owe you a fiduciary duty, you are not his or her client. So you may want to hire an attorney of your own, to review court papers and to monitor the progress of the estate. Doing so is NOT a slam on the personal representative -- it's just a way that you can protect your interests.

I've previously spoken about ways in which computer filing could streamline the Cook County Probate Court, saving attorney time and client money (here and here). I thought this was just my crazy dream, but lo and behold, a friend of mine alerted me to the fact that Court Clerk Dorothy Brown will be introducing E-Filing starting in April 2009. Evidently this will include creating the court file and paying court fees electronically.

Thanks for the tip, Maureen!

One more thing: The fee for filing a petition to open a probate estate in Cook County for estates with values of $15,000 and above has increased, from $304 to $314.

This article -- on the topic of the possible death of billable hours -- is pretty interesting.

I wrote about billing arrangements (and the problems with them) here. As I said there, I'm not sure that billable hours per se are the problem. Rather, the problem is attorneys who bill clients for .25 hours for a 3-minute phone call. (You can do the math -- if an attorney bills at $500 per hour and bills .25 hours for a 3-minute phone call, that's $112.50 for 3 minutes.) That type of behavior is unethical in any environment, and will cause clients to leave when the economy is bad. Ditto with ridiculously high billing rates. I'm at $225 per hour now, but I know attorneys with similar amounts of experience who charge $300 per hour more; I know more senior attorneys who are within shouting distance of $1,000 per hour. The fact is that, once you get to a certain level of experience, I'm not sure what you as a client are paying for. A fancy office? Artwork on the wall? Your attorney's second or third home? The ability to say "I'm represented by Fancy & Shmancy, Attorneys at Law"?

A while back, I sold a couple of domain names I wasn't using (www.probateblog.com and www.estateplanningblog.com). Now I have a couple more available, perfect for the Illinois estate planning or probate professional:

www.illinoisestateattorney.com

and

www.illinois-estate-attorney.com

I assume potential buyers would want both of these. If you are interested, you can bid at www.tdnam.com.

I'll have more details about this later, but I will be presenting a day-long (six-hour) seminar entitled "Boot Camp for Executors and Trustees" on Friday, April 17 from 9:00 a.m. to 4:00 p.m. (with a one-hour break for lunch, which is included in the seminar price.) This seminar is open to the general public, and may be of interest to anyone who is named as an executor or trustee in someone else's estate planning documents (or anyone who just wants to know more about the probate process). The seminar will be held at my office in Westchester, Illinois, located at 1 Westbrook Corporate Center, Suite 300.

The cost of the seminar is $299, and space is limited to 8 individuals. I will post more information soon, or you can call me at (708) 358-1282 with questions or to sign up.

I blogged here about how I would simplify the court process if I ran the Cook County Probate Court. Sitting in court this morning -- for an HOUR -- made me think of one other idea: computer scheduling. The judges could use a Google Calendar-like application to allow attorneys to schedule routine court hearings online. This would save judge and attorney time as well as client money -- you would not believe how many cases get called only so that the attorney can set another date in 1 or 3 or 6 months.

The application could be set so that only a given number of cases are heard on a judge's daily call. (Maybe 15-20 at the regular 10:00 a.m. call.) If the limit has been reached, you can't schedule on that day.

The Model Rules of Professional Conduct are a framework for attorney conduct in many states. The problem is that the Model Rules seem to have been written by and for litigation and commercial attorneys, and not by and for estate planning and probate attorneys. Luckily, ACTEC (the American College of Trust and Estate Counsel) has written commentaries on the Model Rules from an estate planning/probate practitioner's perspective. The commentaries are available in book form or online.

ACTEC also has some other helpful materials online, including a great book containing sample engagement letters to be sent to potential clients, here.

I just signed a lease on a second office, closer to home. It's located at 7225-27 West Madison Street in the hip, up-and-coming (though not because of me) suburb of Forest Park. Here is a map.

I still have my first office, located a bit further west in Westchester (One Westbrook Corporate Center, Suite 300).

Speaking of offices, I've had a number of questions over the past few months from new solo practitioners wondering how to set up an office. This is an important issue, especially with the current economy, where credit may be hard to obtain.

If you are hanging out your own shingle, you can do one of two things:

1. Go traditional -- get a big office, hire staff (secretary, paralegal), and take a big loan to finance all of this.

2. Do what I did, and in a sense continue to do -- operate in a low-budget way. I have only one employee, and he's a clerk who works on contract (only when I need him). I answer my own phones, and respond to my own e-mail. I use technology to keep in touch with clients, and I make myself flexible in terms of where I'll meet them (I make housecalls, although I'm trying to cut down on that). I get my business from referrals and, increasingly, from the internet. I have no debt.

So, you might ask, why do I have two offices? Well, office #1 is an office-sharing arrangement, through a company called HQ. For $200 per month, I get 8 hours of office time -- I typically use that to meet with one or two clients. If I need room for more than two clients, I rent out the office's conference room. HQ also has offices all over Chicago -- I can use these offices for a fee. (Am I sounding like an ad? I don't mean to. I'm sure HQ also has some competitors who presumably do a similar job for a similar price.)

I needed office #2 because (a) it was a great deal and (b) I need to get away from my family. I mean that in the best possible way, but my wife also occasionally works from home, and we find ourselves fighting over the fax machine and such. (There's also the issue of a high-spirited 7-year-old girl who loves to yell up to daddy in his office, even when daddy is on the phone.)

I guess what I'm trying to say is that technology has made it easier than ever for a savvy, debt-averse attorney to make it on his or her own. You aren't required to get a big office and a bunch of staff to make a go of it.

It's always hard for a lawyer to figure out what to call him/herself. What type of lawyer am I? Well, I'm the type of lawyer who currently has 33 active client files, in the following areas:

Estate Administration/Probate/Trust Administration: 18 (plus 3 "inactive" client files), or 54.5%

Estate Planning: 10 (plus 6 "inactive" client files), or 30.3%

Estate Litigation: 4, or 12.1%

Guardianship: 1, or 3.0%