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Ethics/Multi-Party Representation

 

SLEEPING WITH THE ENEMY: HOW TO SLEEP AT NIGHT WHILE MAKING A LIVING WITH AN ESTATE PLANNING PRACTICE  

By Glenn M. Karisch, Barnes & Karisch, P. C., Austin, Texas

Copyright 1998 by Glenn M. Karisch, All Rights Reserved

 

Table of Contents

I. INTRODUCTION

II. MEET THE BRADYS

III. ETHICAL ISSUES AT THE BEGINNING OF REPRESENTATION

A. Who is the Client?

B. Effect of Barcelo on Suits by Surviving Spouse

1. The Barcelo Decision

2. Does the Surviving Spouse Have Privity?

3. Drafting Engagement Letters After Barcelo

C. Getting Paid

IV. ADDRESSING OTHER PROBLEMS OF MULTI-PARTY REPRESENTATION

A. Keeping Client Communications Confidential

B. Keeping Each Client Reasonably Informed

C. Death Planning vs. Divorce Planning

D. Family Limited Partnerships

1. The Law

2. Potential Liability of General Partner of Limited Partnership

V. OTHER ISSUES INVOLVING CLIENT COMMUNICATIONS

1. Terminating the Relationship at the End of Planning

2. Too Much of a Good Thing?

VI. CONCLUSION

VII. APPENDICES

A. Appendix A -- Engagement Letter

B. Appendix B -- Transmittal Letter (For Drafts)

C. Appendix C -- Transmittal Letter (For Executed Originals)
 

Sleeping With the Enemy: How to Sleep at Night While Making a Living With An Estate Planning Practice

I. INTRODUCTION

Estate planning can be an financially and emotionally rewarding area of practice. In a profession built around adversarial relationships, estate planning can offer a lawyer the opportunity to, for the most part, opt out of the "I win, you lose" approach to practicing law. If an attorneys are writers, not fighters, they can spend most of their time working toward tax and family planning objectives that leave everyone a winner and no one (except perhaps the Internal Revenue Service) the loser.

This nonadversarial approach to estate planning can lull an attorney into forgetting that congenial situations can turn sour. When things do not work out as the clients intended, the disciplinary rules and ethical considerations which apply to all attorneys suddenly may impose themselves into an otherwise utopian setting.

Many of these problems arise because, by the very nature of an estate planning practice, attorneys usually are representing multiple parties in the same engagement. More often than not, estate planning clients are married couples. While occasionally spouses have different attorneys plan their estates, the vast majority retain one attorney to prepare both spouses' documents.

This paper discusses some of the ethical issues involved in planning a married couple's estate. Its goal is to better prepare estate planning attorneys to anticipate and deal with potential ethical problems before they become unmanageable. Hopefully this will ward off those demons which lead to sleepless nights -- the enemy of all of us who take on the vast professional responsibility to navigate families through traumatic times.

The author was assisted in the preparation of this paper by many attorneys, to whom he extends thanks. Special thanks go to William D. Pargaman of Austin and Joyce Moore of San Antonio for their help.

II. MEET THE BRADYS

Here's the story of a lovely lady who was bringing up three very lovely girls. All of them had hair of gold like their mother, the youngest one in curls. It's the story of a man named Brady who was busy with three boys of his own. They were four men living all together, yet they were all alone until one day when the lady met this fellow, and they knew that it was much more than a hunch that this group must somehow form a family. That's the way they all became the Brady Bunch.

Mike Brady was widowed with three sons (all minors): Greg, Peter and Bobby. Mike married Carol, a divorcee with three daughters (also all minors): Marcia, Jan and Cindy. Mike and Carol had this 70ish idea that they could merge their families into one big, happy family, with all six children treated as the children of both parents.

Mike and Carol Brady came to see you in 1986 for estate planning. Things had been going quite well for the Bradys at the time, and it appeared likely that their combined marital wealth would probably exceed $1.2 million. Fortunately, they came in to see you, a young estate planning attorney, shortly after you returned from that year's Advanced Estate Planning and Probate Law Course, and you were equipped with several good estate planning ideas.

After your skillful explanation of the tax issues involved, and based on your energetic recommendation that they should take advantage of the tax savings afforded by credit shelter planning, Mike and Carol ask you to prepare wills for each of them with the following features:

When the Bradys come in to sign their new wills, Carol is a little concerned about all the complex tax and trust language in the will. Mike gives Carol a dirty look, and you are afraid that there may be an ugly scene. Quickly you smooth over the waters by explaining to Mike and Carol that these bypass trusts are just like outright dispositions, but with the added advantage of tax savings.

Seven years later, in 1991, Carol Brady calls you. She reports that Mike Brady has passed away (there were some nasty rumors about AIDS, but she assures you he had colon cancer) and that she needs to know what to do. The first thing you do is dig out your copy of Mike's will. Sadly, it doesn't look anything like your current wills. Still, it doesn't look too bad, and in due course you probate the will, file the tax return (there is no tax due because of the optimum marital deduction plan), fund the bypass trust and send Mrs. Brady on her way.

Now Mrs. Brady has come to see you again. (Funny, she doesn't look so bright and cheery now.) It seems that she is having trouble with her children. Ever since Mike died, she has been estranged from Greg and Peter. Bobby is the only one of Mike's children who is still on speaking terms with Carol, and he's a twenty-something year old who is jobless and still living at home. Peter is now a lawyer, and he's been peppering Mrs. Brady with letters demanding information and accountings. Mrs. Brady says she has decided that the whole tax savings thing isn't worth it, and that she just wants to undo the bypass trust and make a new will leaving everything to her daughter Jan. (After much prodding, you learn that Marcia (who has moved to Mount Shasta and changed her name to "Glistening Stone Under Falling Waters") and Cindy (who apparently has developed into something of an actress and dancer performing under the stage name "Sin-dee") have fallen into disfavor.) Mrs. Brady is especially interested in terminating the trust, since she lost a good deal of "her" money by investing in a failed fern bar called "Flowers and Friends."

What advice do you give Mrs. Brady?

III. ETHICAL ISSUES AT THE BEGINNING OF REPRESENTATION

Let's turn the clock back to when Mr. and Mrs. Brady first came to see you about estate planning. What were the Bradys' estate planning goals? What effort did you make to discern if Mr. Brady's goals and Mrs. Brady's goals were the same? What did you do to assure that the plan you devised met the Bradys' goals? What steps did you take to protect yourself from later problems with the plan? What liability do you face as a result of preparing the Bradys' estate plan?

A. Who is the Client?

First, let's start with what appears to be a simple question: Who was your client when you prepared the Bradys' estate plan? Mr. Brady? Mrs. Brady? Both Mr. and Mrs. Brady? The Brady family? Most of us would probably say that our clients were both Mr. and Mrs. Brady. Hopefully we used an engagement letter which addressed this issue, although most of us probably would find few engagement letters in our 1986 estate planning files.

Identifying the client or clients can be tricky, especially when 20-20 hindsight affects the parties' recollection of the facts. The attorney-client relationship is governed by the law of agency and arises only upon the mutual consent of the attorney and the client. See Duvall County Ranch Co. v. Alamo Lumber Co., 663 S.W.2d 627, 633 (Tex. Civ. App. -- Amarillo 1983, writ refd. n.r.e.); Thompson v. Vinson & Elkins, 859 S. W. 2d 617, 621-23 (Tex. App. -- Houston [1st Dist.] 1993, writ denied). However, consent to establish an attorney-client relationship may be inferred from the conduct of the parties. Duvall County Ranch Co. v. Alamo Lumber Co.,663 S. W. 2d at 633. Assume for the moment that one of the Bradys' children attended the estate planning conference. That child's recollection of the meeting might convince a jury that an attorney-client relationship existed between the attorney and the child, despite everything the attorney may say to the contrary. In Vinson & Elkins v. Moran, 946 S. W. 2d 381, 1997 Tex. App. LEXIS 1498 (Tex. App. -- Houston [14th Dist.] 1997, writ pending), which was an estate administration case, the estate beneficiaries successfully established the existence of an attorney-client relationship with the executor's attorneys based on "beneficiary meetings" with attorneys and letters sent directly from the lawyer to the beneficiaries.

If an engagement letter is used, the identity of the client or clients should be expressly stated. For example, in the form engagement letter attached as Appendix A, the following language is used:

You, and you alone, are my clients. I owe no duty to your family members or to your potential estate beneficiaries.

This language may make things clear vis a vis the attorney and the persons he or she considers the clients, but it is only marginally helpful in defeating the claim of a family member who attempts to assert the existence of an attorney-client relationship. Should the attorney insist that a copy of the engagement letter be given to all potential estate beneficiaries? That seems extreme and is likely to be counter to the clients' best interests (since the clients may not wish to broadcast the fact that estate planning is occurring to all potential estate beneficiaries). However, if a potential estate beneficiary meets with the attorney and the clients at one or more of the estate planning conferences, then it is a good idea to provide a carbon copy of the letter to the potential beneficiary or, perhaps, a separate letter to the potential beneficiary.

B. Effect of Barcelo on Suits by Surviving Spouse

A key reason why it is important to identify one's clients is the privity defense in legal malpractice claims. Privity is alive and well in Texas, as evidenced by the Texas Supreme Court's decision in Barcelo v. Elliott,923 S. W. 2d 575 (Tex. 1996).

1. The Barcelo Decision

In Barcelo, the intended beneficiaries of an invalid trust brought a legal malpractice claim against the attorney who prepared the trust, alleging that the attorney's negligence caused the trust to be invalid. The Supreme Court held, in a split decision, that the attorney owed no professional duty to the intended trust beneficiaries because he did not represent them. Chief Justice Phillips writes in the majority opinion:

We believe the greater good is served by preserving a bright-line privity rule which denies a cause of action to all beneficiaries whom the attorney did not represent. This will ensure that attorneys may in all cases zealously represent their clients without the threat of suit from third parties compromising that representation. . . . We therefore hold that an attorney retained by a testator or settlor to draft a will or trust owes no professional duty of care to persons named as beneficiaries under the will or trust.

923 S. W. 2d at 578-9. [Emphasis added]

Thus, it seems clear under Barcelo that, if the attorney successfully establishes that the intended beneficiaries are not his clients, then the attorney owes no duty to such beneficiaries and he or she is off the hook for negligently preparing estate planning documents. Remember, however, that the beneficiaries may successfully prove that an attorney-client relationship existed between the attorney and themselves. See Vinson & Elkins v. Moran, 946 S. W. 2d 381, 1997 Tex. App. LEXIS 1498 (Tex. App. -- Houston [14th Dist.] 1997, writ pending).

2. Does the Surviving Spouse Have Privity?

The answer is not so clear when the attorney represents both spouses and the surviving spouse is a beneficiary. If an attorney-client relationship existed between the attorney and the surviving spouse, and if the estate planning documents were negligently prepared, resulting in a material harm to the surviving spouse (for example, if an intended QTIP trust fails to qualify for the marital deduction, resulting in unintended tax liability on the death of the first spouse to die), does Barcelo bar a malpractice claim brought by the surviving spouse?

One the one hand, one may argue that the policy arguments supporting Barcelo apply with equal force to a malpractice claim brought by the surviving spouse in his or her capacity as beneficiary. Barcelo's bright-line privity rule is intended to ensure that attorneys may zealously represent their clients without threat of suit from third parties. If the attorney must fear a suit by the surviving spouse as beneficiary, the advice he or she gives the testator may be affected. Also, while the attorney may have represented both spouses in preparing the estate planning documents, the surviving spouse was not "the client" for privity purposes vis a vis the will of the first spouse to die.

On the other hand, one may argue that, in entering into the attorney-client relationship with the attorney, the surviving spouse reasonably anticipated that the attorney would prepare both sets of documents in a professional manner. The Barcelo court seems to anticipate that beneficiaries who also are clients may have the requisite privity to bring a malpractice claim. In Vinson & Elkins v. Moran, supra, the beneficiaries overcame the privity barrier by proving to the jury's satisfaction that an attorney-client relationship existed between the beneficiaries and the attorneys.

There is no clear answer to this issue at this time. An excellent source of defensive arguments based on Barcelo is Joyce Moore's article entitled "Ten Foot Tall and Bullet Proof, or, What's Left After Barcelo? A Case Study" in the Advanced Estate Planning Strategies Course (1997), State Bar of Texas.

Joyce Moore may have a hand in clarifying the law in this issue. In Estate of William H. Arlitt v. Patterson,Cause No. 04-97-00750-CV now pending in the Fourth Court of Appeals (San Antonio), the Court of Appeals is being asked to overturn a summary judgment entered by Bexar County Probate Court No. 1 that neither the personal representative of the testator's estate nor the estate beneficiaries -- including the surviving spouse who also purchased estate planning services from the same attorneys at the same times as the testator -- had privity to bring a legal malpractice claim.(1)

3. Drafting Engagement Letters After Barcelo

Consider again the following language from the form engagement letter attached as Appendix A:

You, and you alone, are my clients. I owe no duty to your family members or to your potential estate beneficiaries.

Does this language hurt the attorney's privity argument in a malpractice claim brought by the surviving spouse? If this provision was not in the engagement letter, the attorney might argue that, under Barcelo, the attorney-client relationship in question was between the attorney and the deceased spouse. This affirmative statement that both spouses are clients may actually do more harm than good.

How would a prospective client react to the following provision in an engagement letter?

You, and you alone, are my clients. I owe no duty to your family members or to your potential estate beneficiaries. In preparing [Husband]'s estate planning documents, I am representing [Husband] only and owe no duty to [Wife]. In preparing [Wife]'s estate planning documents, I am representing [Wife] only and owe no duty to [Husband].

Could one reasonably expect a client who reads this provision to sign the engagement letter? If not, isn't that a pretty good indication of what the clients' expectations are regarding professional duties owed to the surviving spouse?

On the other hand, the following language is not so offensive and may preserve a Barcelo privity argument in a suit by the surviving spouse:

Multi-party Representation. My representation of you in this matter requires me to represent each of you as clients at the same time. Of course, you could each retain your own attorney to prepare your estate planning documents, but you have indicated that you prefer to have me prepare estate planning documents for both of you. I am happy to do this, subject to the following conditions regarding multi-party representation:

1. Since there are two of you, the possibility of a conflict between you exists. You acknowledge and understand that, since I am representing both of you, no communication either of you has with me can be kept confidential from the other of you. If a conflict develops between the two of you, I may decline to continue to represent you.

2. When I am advising [Husband] and preparing [Husband]'s documents, [Husband] is my only client, and I owe no duty [Husband]'s family members or potential estate beneficiaries.

3. When I am advising [Wife] and preparing [Wife]'s documents, [Wife] is my only client, and I owe no duty [Wife]'s family members or potential estate beneficiaries.

This language is included as an option in the form engagement letter attached as Appendix A.

C. Getting Paid

There are several bases for being paid for estate planning services, including:

Whatever basis one uses for charging for one's services, one must keep in mind the following provisions of Rule 1.04 of the Texas Discliplinary Rules of Professional Conduct:

(a) A lawyer shall not enter into an arrangement for, charge, or collect an illegal fee or unconscionable fee. A fee is unconscionable if a competent lawyer could not form a reasonable belief that the fee is reasonable.

(b) Factors that may be considered in determining the reasonableness of a fee include, but not to the exclusion of other relevant factors, the following:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.

(c) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.

IV. ADDRESSING OTHER PROBLEMS OF MULTI-PARTY REPRESENTATION

In the vast majority of cases, both the husband and the wife will be the attorneys' clients. This multi-party representation, which practitioners in other areas of practice may shun, is the bread and butter of an estate planning practice. Thus, estate planning lawyers must live with the issues surrounding multi-party representation every day.

Rust E. Reid presented an excellent paper on multi-party representation at last year's conference. See "Ethical Problems in Multi-Party Representation in Estate Planning, Probate, and Fiduciary Matters," 1996 Advanced Estate Planning and Probate Course, State Bar of Texas. Reid points out that the most obvious (but not the only) problems presented in the representation of multiple parties have to do with communications -- (1) keeping client communications confidential and (2) keeping both clients reasonably informed.

A. Keeping Client Communications Confidential

Handling the problem with keeping client communications confidential is easy to solve, at least on the surface. An attorney cannot keep confidential information given by one client secret from the other client and still keep both clients reasonably informed. Therefore, both clients should agree that no communications between the attorney and either client will be kept confidential from the other. The form engagement letter in Appendix A includes the following language for this purpose:

Since there are two of you, the possibility of a conflict between you exists. You acknowledge and understand that, since I am representing both of you, no communication either of you has with me can be kept confidential from the other of you. If a conflict develops between the two of you, I may decline to continue to represent you.

In practice, the attorney is likely to run into problems where this tidy solution to the problem is challenged by messy facts. Assume, for instance, that the husband is the attorney's old college buddy and that this friendship is the reason the attorney-client relationship was established in the first place. If the husband shares information with the attorney which the husband assumes will be kept confidential (for example, news of an impending divorce), is the attorney going to keep that information confidential? Is the attorney in such a situation going to decline further representation of the friend?

B. Keeping Each Client Reasonably Informed

The problems of keeping each client reasonably informed can be equally troubling. The client contact on an estate planning project is rarely equal. True, there are some cases in which a married couple comes to each planning session together. However, even in these cases there are likely to be telephone conferences with one spouse or the other. Also, the clients may participate unequally in planning conferences, and one client may understand the issues less than the other. Finally, one spouse may appear to dominate the other or make decisions for the other.

How does the estate planner assure that the estate planning document meets the wishes of both clients? One way is to rely more heavily on written communications (although this may in reality protect the attorney more than it protects the "quiet" spouse). Descriptions of strategic decisions involved in devising the estate plan can be included in engagement letters or transmittal letters. For example, the following language (from the form engagement letter attached as Appendix A) may be used to emphasize that meeting tax planning objectives meant sacrificing other objectives:

[Y]ou have indicated that you want your estate plan to include provisions designed to save your family estate and/or gift taxes. By including these provisions, you should recognize that (a) your estate planning documents are likely to be more complex than they would have been if tax savings was not an objective and (b) restrictions may be placed on your beneficiaries (including the surviving spouse) that may make it more difficult to fully utilize and enjoy the property free from interference by and/or liability to others. This will confirm that we have discussed these issues at some length and that you have decided that the potential tax savings to be gained from this plan take priority over these potential detriments.

This solution may succeed only in protecting the attorney, rather than one or both of the clients. Also, the attorney may be reluctant to discuss some strategies in such a letter. And, of course, there is always the risk that the description of the plan may deviate from the plan itself. Nevertheless, written communication of this sort is one way to attempt to assure that your clients know what they are getting into.

C. Death Planning vs. Divorce Planning

An estate plan that is an estate and gift tax masterpiece can be a disaster for either or both spouses if their marriage ends in divorce rather than death. See Robert H. Kroney and Thomas P. Goranson, "Estate Planning/Divorce Interface," 18th Annual Advanced Estate Planning and Probate Course (1994), State Bar of Texas. Hopefully we all cover this issue in our estate planning conferences. Even if the issue is discussed, it should also be covered in written form. The following language (from the form engagement letter attached as Appendix A) may be used:

In helping you with your estate plan, my objective will be planning for the death or disability of either or both of you; I will not be considering the effects of a possible divorce. Either or both of you may be adversely affected by your estate plan in the event your marriage ends in divorce. If you have any questions about how this plan may affect you in the event of a divorce, please consult with an attorney experienced in family law matters.

D. Family Limited Partnerships

Another area in which issues of multi-party representation may arise, as well as other ethical/malpractice issues, is in the area of family limited partnerships. These partnerships may be great vehicles for managing family assets and obtaining discounts for transfer tax purposes, but they can be a source of fiduciary liability for the general partner. When used for estate planning purposes, the clients often end up as the general partners. The clients may unwittingly be placing themselves in a position of potential liability to their children and other family members who are partners in the limited partnership by assuming the role of general partner -- a potential liability which they may blame on the attorney who recommended the partnership.

Does the general partner of a limited partnership owe fiduciary duties to the limited partners? The answer to that question is not simple.

1. The Law

Section 4.03(b) of the Texas Revised Limited Partnership Act ("TRLPA") provides that, except as otherwise provided in such act or in the partnership agreement, the liabilities of the general partner to the limited partners is the same as the liabilities of a partner in a general partnership.

Under the Texas Uniform Partnership Act ("TUPA"), it is clear that partners owed fiduciary duties to each other. See TUPA Section 21; Crenshaw v. Swenson, 611 S.W. 2d 886 (Tex. Civ. App. -- Austin 1980, writ refd. n.r.e. -- managing partner owes the highest fiduciary duty recognized in the law); and Watson v. Limited Partners of WCKT, Ltd., 570 S.W.2d 179 (Tex. Civ. App. -- Austin 1978, writ refd. n.r.e. -- general partner stands in the same fiduciary capacity to limited partners as a trustee stands to the beneficiaries of a trust).

However, in 1993 the Texas Revised Partnership Act ("TRPA") was enacted, which applies to all partnerships formed on or after January 1, 1994, pre-1994 partnerships who elect to be so governed, and all partnerships after December 31, 1998. TRPA Section 4.04 provides (1) that a partner owes a duty of loyalty and a duty of care to the partnership and the other partners, (2) that a partner does not violate a duty merely because "the partner's conduct furthers the partner's own interest," and (3) "[a] partner, in that capacity, is not a trustee and is not held to the same standards as a trustee."

The Comment of the 1993 Bar Committee accompanying the TRPA says that this section:

states specifically that a partner owes to the partnership and the other partners duties of loyalty and of care. These duties may not be waived or eliminated entirely in the partnership agreement, but they may be modified as described in the discussion of Section 1.03(b). Unlike the title of TUPA 21, but like its text, Section 4.04 does not use the term "fiduciary." This section defines partner duties and implies that they are not to be expanded by loose use of "fiduciary" concepts from other contexts or by the rhetoric of some prior cases. Similarly, subsection (f) specifically states that a partner as such is not a trustee and is not held to the same standards as a trustee, thus further attempting to restrict reliance on the unfortunate language of prior law. The term "fiduciary" is inappropriate when used to describe the duties of a partner because a partner, unlike a true trustee, may legitimately pursue the partner's own self interest and not solely the interest of fellow partners or the partnership.

In M. R. Champion, Inc. v. Mizell, 904 S.W.2d 617 (Tex. 1995), the Supreme Court characterized the duties owed by one partner to the other as "a duty in the nature of a fiduciary duty." 904 S.W.2d at 618. The Mizell case arose under the TUPA prior to adoption of the TRPA, but the court cited TRPA Section 4.04, saying in a footnote that, although the statutory provisions were completely revised in 1994, the principles as they apply to the Mizell case had not changed.

2. Potential Liability of General Partner of Limited Partnership

Where does this leave the clients who install themselves as the general partners of a limited partnership? What about the bereaved widow or widower who never was active in family business affairs but who finds himself or herself as sole general partner upon the death of his or her spouse?

First, if the limited partnership was established prior to 1994, if the partnership has not elected to be governed by TRPA, and if the partnership agreement is silent, then the general partner owes trustee-type fiduciary duties to the limited partners, and electing to be governed by TRPA may be in order.

If the limited partnership was established in or after 1994 (and most family limited partnerships fall in this category), or if the limited partnership has elected to be governed by TRPA, then it is likely that the general partner will be held to less than "the highest fiduciary duty recognized in the law." It is also likely, however, that the general partner owes some duties to the limited partners and that these duties include the duty of loyalty and the duty of care.

To make matters even more complicated, in TAM 9751003, the Internal Revenue Service took the position that gifts of interests in a Texas limited partnership did not qualify for the annual gift tax exclusion where the partnership agreement sought to insulate the general partner from fiduciary liability by providing:

the General Partner may distribute funds of the partnership to the partners at such times and in such amounts as the General Partner, in its sole discretion, determines to be appropriate. Without limiting the generality of the foregoing, the General Partner shall have complete discretion to retain funds within the partnership for future partnership expenditures OR FOR ANY OTHER REASON WHATSOEVER. [Emphasis supplied by IRS.]

The service took the position that this, in effect, made the general partner free from fiduciary duties to the limited partners and, since he could not be compelled to make income distributions to limited partners, gifts of limited partnership interests were not present interest gifts. While this may be viewed as a somewhat extreme position, it nevertheless poses a problem for an estate planner who wishes to insulate the client/general partner from liability while still permitting annual exclusion gifts of limited partnership interests.

As a practical matter, from the client's perspective in his or her capacity as general partner, it doesn't matter what the duty is called or the extent of the duty imposed -- the general partner owes some duty "in the nature of a fiduciary duty," and this is enough of a crack in the wall to inspire a disgruntled limited partner to complain of the general partner's self-serving actions is probably enough to force a jury issue on the breach. Thus, whether the standard is low or high, a standard of conduct still exists, and the faces the possibility of a lawsuit for the manner in which he or she manages the partnership.

Of course, just because the general partner owes duties to the limited partners is no reason to never use a family limited partnership as an estate planning device. Like all planning techniques, FLPs have their advantages and disadvantages. General partner liability is just one of the issues that has to be considered when an FLP is being discussed.

V. OTHER ISSUES INVOLVING CLIENT COMMUNICATIONS

Has there ever been a paper addressing ethical issues which did not emphasize the importance of client communications? This paper is no different. As may be gleaned from the above discussion, a number of the ethical dilemmas which arise in representing a married couple in estate planning can be addressed, if not totally avoided, in an attorney's correspondence with the client.

Attached to this paper as Appendix A is a form engagement letter which addresses a number of these issues. Attached as Appendix B is a form of letter used to transmit drafts of estate planning documents to the clients for review. Attached as Appendix C is a form of letter used to transmit executed original estate planning documents to the clients.

1. Terminating the Relationship at the End of Planning

Note that these forms attempt to terminate the attorney-client relationship at the conclusion of the estate planning process. For example, the cover letter transmitting executed originals (Appendix C) provides:

7. My representation of you. Please read through the enclosed documents carefully over the next two weeks. If I have made any mistakes, or if there is something you do not like or understand, please call me, and I will clear things up. If I have not heard from you within two weeks, I will assume everything is the way you want it, and my representation of you in this matter will cease.

In this matter, you and you alone have been my client. I owe no duty to any of your family members or other possible beneficiaries. I have no continuing duty to update your plan or otherwise represent you. Of course, I look forward to working with you again in the future should you wish to hire me to help you with revising your estate plan or with another matter.

A speaker at the Advanced Estate Planning and Probate Course several years ago suggested this approach, including giving the client a couple of weeks to review the documents. In several years of using this language, the author has never had a client call back during the two-week period with a problem.

Terminating the attorney-client relationship is important so that there is no confusion about whether or not the attorney has a duty to keep the client informed of law changes and to update documents as necessary.

2. Too Much of a Good Thing?

It is easy to get carried away in client communications. Document assembly programs now make it possible to produce "understandable" abstracts of estate planning documents which can accompany the documents themselves. Living trust factories produce impressive binders and document descriptions which their customers obviously like. Estate planning attorneys understandably feel pressure to do likewise.

The goal in client communications should not be detailed descriptions of every aspect of the representation, but rather general discussions of the key points. A section-by-section description of each document presents the following potential problems:

Thus, rather than a section-by-section description of the bypass trust, the following general description in the transmittal letter (Appendix B) gets the necessary points across:

[Each of your estate plans will include a] Will, which provides (among other things) for the creation of a "Bypass Trust" as a means to preserve the estate and gift tax credit of the first spouse to die. This credit, which currently is equivalent to $600,000 in assets, may allow the two of you to pass more of your combined marital wealth to your descendants or other estate beneficiary free of the estate tax. The Bypass Trust in each Will is funded by means of a formula. This formula contains language which is intended to maximize the amount of property passing into the Bypass Trust without causing there to be any tax due on the death of the first spouse to die. Funding of the Bypass Trust pursuant to this formula is mandatory on the death of the first spouse -- the surviving spouse has no power to choose whether or not to fund the Bypass Trust.

Another practice which may create some problems while solving others is the use of estate planning questionnaires. Before preparing and using a questionnaire, the attorney should ask himself or herself: What is the purpose of the questionnaire? It may be marketing tool. For example, in answering the questions, the potential client may convince himself or herself that estate planning is needed or give the attorney discussion points in the initial client conference which will help close the deal. Or it may be a tool for the attorney to use to better plan the estate. For example, it may include obscure questions which are easily missed in the initial client interview.

Whatever its purpose, the attorney should review the questionnaire for malpractice traps. Imagine, for example, that the attorney representing the Bradys used a questionnaire which asked the following [the Bradys' responses are shown]:

Please indicate which of the following are your estate planning goals and rate those goals where "1" is the most important goal and "10" is the least important goal:

3 Tax savings

4Providing for my children

6 Providing for my grandchildren

1 Providing for the surviving spouse

5 Asset protection

2 Preventing family disputes

Now imagine that the plan the attorney came up with for the Bradys involved a bypass trust with the surviving spouse as the trustee and a spray power to the spouse and descendants based on a health, education, maintenance and support standard. If Mrs. Brady is sued by one of her grandchildren for breach of fiduciary duty, and if she digs out her copy of the questionnaire (or it is produced in discovery) and finds that providing for the surviving spouse and preventing family disputes were given the highest priorities, what position will the attorney be in?

VI. CONCLUSION

Where does all this leave poor Mrs. Brady? And where does it leave you and your malpractice carrier? Like most other unpleasant things in life, it leaves you older and wiser and hopefully in a position to avoid this mess the next time a Mr. and Mrs. Brady walks into your office.

By the way, by all reliable accounts the stars who played the Brady children all grew up to be fine, upstanding citizens. My hypothetical was just a way to focus attention on these issues and is not a reflection on those actors.

VII. APPENDICES

A. Appendix A -- Engagement Letter [Date]

Mr. and Mrs. [Husband's Name]

[Client's Address]

Re: Agreement for Legal Services

Dear Mr. and Mrs. [Client Last Name]:

The purpose of this letter is to set forth the terms of my legal representation of you.

1. Scope of representation. You have asked me to help you with planning your estate. This representation will include the following:

a. Drafting your estate planning documents based on the information you have provided to me. Your estate planning documents will include the following documents for each of you:

(1) A will, which provides (among other things) for the creation of a "Bypass Trust" as a means to preserve the estate and gift tax credit of the first spouse to die. This credit, which is currently equivalent to $600,000 in assets, may allow the two of you to pass more of your combined marital wealth to your descendants or other estate beneficiary free of the estate tax. [Option 1: The Bypass Trust in each will is funded by means of a disclaimer by the surviving spouse. This method of funding permits the surviving spouse to wait until the death of the first spouse to die to decide to what extent the Bypass Trust is to be funded. The surviving spouse could choose to disclaim nothing, meaning that the surviving spouse would receive the entire estate and nothing would be placed in the Bypass Trust. Or the surviving spouse could decide to disclaim up to $600,000 worth of property, causing the property so disclaimed to pass into the Bypass Trust. Thus, the estate tax savings under each will is totally dependent upon the decision of the surviving spouse to disclaim or not to disclaim.][Option 2: The Bypass Trust in each will is funded by means of a formula. This formula contains language which is intended to maximize the amount of property passing into the Bypass Trust without causing there to be any tax due on the death of the first spouse to die. Funding of the Bypass Trust pursuant to this formula is mandatory on the death of the first spouse -- the surviving spouse has no power to choose whether or not to fund the Bypass Trust.]

(2) A statutory durable power of attorney.

(3) A durable power of attorney for health care.

(4) A declaration of who you want your guardian to be if the need for one ever arises in the future.

(5) A directive to physicians (often called a "living will").

b. Providing you with instructions on how to coordinate your life insurance and retirement plan beneficiary designations with your estate planning documents.

c. Sending these drafts to you and answering any questions that you may have.

Preparing final drafts of the documents for signing.

e. Supervising your execution of these final documents in my office.

Sending you the completed, signed documents for your records.

2. Excluded from representation. My representation of you is limited to matters described above, and I owe you no duty of ongoing representation in this or other matters. My duties to you under this agreement will end when I have sent you your completed documents and you have had two weeks to review them for accuracy. After that time, my representation of you will cease, and I will owe you no duty to update your plan or to notify you of law changes which may affect you. Any future representation is not a part of this engagement and will be covered by a separate agreement.

3. Planning objectives. In helping you with your estate plan, my objective will be planning for the death or disability of either or both of you; I will not be considering the effects of a possible divorce. Either or both of you may be adversely affected by your estate plan in the event your marriage ends in divorce. If you have any questions about how this plan may affect you in the event of a divorce, please consult with an attorney experienced in family law matters. In addition, you have indicated that you want your estate plan to include provisions designed to save your family estate and/or gift taxes. By including these provisions, you should recognize that (a) your estate planning documents are likely to be more complex than they would have been if tax savings was not an objective and (b) restrictions may be placed on your beneficiaries (including the surviving spouse) that may make it more difficult to fully utilize and enjoy the property free from interference by and/or liability to others. This will confirm that we have discussed these issues at some length and that you have decided that the potential tax savings to be gained from this plan take priority over these potential detriments.

4. Fees. I will perform the services described above for a fee of $[Flat Fee], which fee includes up to [Hours in Flat Fee] hours of attorney time. If this project takes more than this amount of time, you agree to pay for time in excess of [Hours in Flat Fee] hours of attorney time at the hourly rate of $[Attorney Rate] per hour of attorney time. I will keep track of all time that I spend on this matter, and all of that time will count this limit. This will include the time that I or other office personnel may have already spent discussing this matter with you, time that I or other office personnel spend talking to you on the telephone or in person, time that I or other office personnel spend talking to each other or to third parties (your advisors, other attorneys, etc.) about your matter, time that we spend doing research on your matter, time that we spend drafting, revising and reviewing your documents, time that we spend drafting and reading correspondence, and time that our attorneys or other office personnel spend supervising your execution of documents. It has been my experience that I and my staff have been able to prepare estate plans like the one you have indicated you want for the majority of my clients within this time frame. Therefore, I have priced my services so that the majority of my clients can get a fair price for their plans and have a good idea of what those plans will cost. If I exceed the time limit in your case, I will charge you a larger fee based on the hourly rate stated above. Reasons why the time limit may be exceeded are: the need to make more revisions than usual; the need to spend more time than usual explaining provisions or answering questions; and delay in providing me with requested information. We mention these reasons not to discourage you from asking questions or having your documents be just the way you want, but to explain to you the effect this may have on the fee I charge so that you are in a position to control costs if you wish to do so.

5. Expenses. In addition to the fee described above, you agree to pay all expenses related to this matter. These expenses include, but are not limited to, postage, long distance telephone, photocopying, overnight messenger charges and filing fees. It has been my experience that, if there is only one overnight messenger charge and no long distance charges, the expenses associated with a plan such as yours will be approximately $[Flat Expenses]. Since these expenses usually are not known precisely until after you sign your documents, I probably will bill you the estimated amount stated above. This allows you to pay your bill in full and complete your business with my firm without having to wait a month or two to pay the expenses.

6. Billing procedure. Payment for fees and expenses is due at the earlier of (1) the time you sign your documents; or (2) 45 days from the date of this letter. Please be ready to pay when you come in to sign your documents.

[Option 1:7. You are my clients. You, and you alone, are my clients. I owe no duty to your family members or to your potential estate beneficiaries. Since there are two of you, the possibility of a conflict between you exists. You acknowledge and understand that, since I am representing both of you, no communication either of you has with me can be kept confidential from the other of you. If a conflict develops between the two of you, I may decline to continue to represent you.]

[Option 2:7. Multi-party representation. My representation of you in this matter requires me to represent each of you as clients at the same time. Of course, you could each retain your own attorney to prepare your estate planning documents, but you have indicated that you prefer to have me prepare estate planning documents for both of you. I am happy to do this, subject to the following conditions regarding multi-party representation:

a. Since there are two of you, the possibility of a conflict between you exists. You acknowledge and understand that, since I am representing both of you, no communication either of you has with me can be kept confidential from the other of you. If a conflict develops between the two of you, I may decline to continue to represent you.

b. When I am advising [Husband] and preparing [Husband]'s documents, [Husband] is my only client, and I owe no duty [Husband]'s family members or potential estate beneficiaries.

c. When I am advising [Wife] and preparing [Wife]'s documents, [Wife] is my only client, and I owe no duty [Wife]'s family members or potential estate beneficiaries.]

8. Termination of Representation. Either of us can terminate this relationship at any time for any reason by giving written notice to the other party. My representation of you will terminate immediately upon the giving of this notice by either party, except that, if you are involved in a court proceeding (such as a lawsuit or probate proceeding) at the time of termination and I am the attorney of record, my representation will continue until I am sure that my immediate withdrawal as your attorney will not jeopardize your interests in the proceeding. Upon termination by either party for any reason:

a. You agree to pay my fees through the date of termination calculated at the hourly rate or rates stated above;

b. You agree to pay expenses incurred through the date of termination; and

c. You are entitled to the file I maintain on your matter if you request it, provided that I am entitled to photocopy the file contents at your expense prior to delivery of the file to you.

9. Grievances. The State Bar of Texas investigates and prosecutes professional misconduct committed by Texas attorneys. Although not every complaint against or dispute with a lawyer involves professional misconduct, the State Bar Office of General Counsel will provide you with information about how to file a complaint. For more information, please call 1/800/932-1900. This is a toll-free phone call.

I look forward to working with you on this matter. If you want me to represent you, and if you agree to the terms of this letter, please sign one copy of this letter and return it to me. (The other copy is for your records.)

Very truly yours,

[Law Firm]
 
Accepted and Agreed:

___________________________________

[Husband's Name]

___________________________________

[Wife's Name]

B. Appendix B -- Transmittal Letter (For Drafts)
 
  [Date]  

Mr. and Mrs. [Husband's Name]

[Client's Address]

Dear Mr. and Mrs. [Client Last Name]:

Enclosed are drafts of the following documents for each of you:

1. A Will, which provides (among other things) for the creation of a "Bypass Trust" as a means to preserve the estate and gift tax credit of the first spouse to die. This credit, which is currently equivalent to $600,000 in assets, may allow the two of you to pass more of your combined marital wealth to your descendants or other estate beneficiary free of the estate tax. [Option 1: The Bypass Trust in each Will is funded by means of a disclaimer by the surviving spouse. This method of funding permits the surviving spouse to wait until the death of the first spouse to die to decide to what extent the Bypass Trust is to be funded. The surviving spouse could choose to disclaim nothing, meaning that the surviving spouse would receive the entire estate and nothing would be placed in the Bypass Trust. Or the surviving spouse could decide to disclaim up to $600,000 worth of property, causing the property so disclaimed to pass into the Bypass Trust. Thus, the estate tax savings under each Will is totally dependent upon the decision of the surviving spouse to disclaim or not to disclaim.][Option 2: The Bypass Trust in each Will is funded by means of a formula. This formula contains language which is intended to maximize the amount of property passing into the Bypass Trust without causing there to be any tax due on the death of the first spouse to die. Funding of the Bypass Trust pursuant to this formula is mandatory on the death of the first spouse -- the surviving spouse has no power to choose whether or not to fund the Bypass Trust.]

2. A Statutory Durable Power of Attorney, which gives the person you name broad power and authority to deal with your property.

3. A Durable Power of Attorney for Health Care (with Disclosure Statement), in which you give the person named in the power of attorney the authority to make health care decisions for your if you are incapacitated and unable to make the decisions yourself.

4. A Declaration of Guardian, in which you name the person you want to be the guardian of your person and estate should the need later arise.

5. A Directive to Physicians, often called a "living will," in which you indicate your wishes regarding medical treatment in the event of a terminable illness. In the Directive to Physicians, you name the person you want to make treatment decisions for you if you are unable to do so for yourself.

6. Instructions on how to coordinate your life insurance proceeds and retirement plan benefits with your estate plan. It is important for these proceeds and benefits to be coordinated with the estate plan so that all of the goals of the estate plan are realized. You will have to contact your insurance companies and plan custodians or trustees to determine how to change the beneficiary, since each company has slightly different requirements.

Keep in mind that the above descriptions of your documents are included in this letter for your convenience only. These descriptions are summaries only and are not intended to make it unnecessary for you to read the documents carefully. You must read the actual documents carefully and be sure that you actually understand them. If there is a conflict between the terms of the documents and the terms of this letter, the terms of the documents will control.

Please read the enclosed documents carefully to make sure that they are correct and to make sure that they properly reflect your wishes. Pay particular attention to birthdates, the spelling of family member names, etc. -- it is easy for me to make a mistake on these items. Please call me if you have any questions. Also, please call me to provide missing information, if any.

Please contact me with your questions, corrections or changes, and please contact me to set up a time to sign these documents.

I look forward to hearing from you.

Very truly yours,

[LAW FIRM]
 
Enclosures

C. Appendix C -- Transmittal Letter (For Executed Originals)
 
  [Date]    

Mr. and Mrs. [Husband's Name]

[Client's Address]

Dear Mr. and Mrs. [Client Last Name]:

Enclosed are the following executed original documents dated [Signing Date], for each of you:

1. Last Will and Testament.

2. Statutory Durable Power of Attorney.

3. Durable Power of Attorney for Health Care.

4. Declaration of Guardian.

5. Directive to Physicians.

Also enclosed is a set of copies of all of the documents, as you requested. I have kept a set of copies in my files. Finally, also enclosed are instructions on how to coordinate your life insurance benefits with your estate plan.

This letter discusses several points about your estate plan of which you should be aware. If you have any questions about any of the matters discussed in this letter, please call. I suggest that you keep this letter with your documents so that you may refer to it from time to time.

1. Revising your beneficiary designations. In order for your estate plan to be complete, you must coordinate the beneficiary designations on your life insurance policies with your will. Please refer to the enclosed instructions regarding beneficiary designations.

2. Safekeeping your estate planning documents. Your documents should be kept in a safe place, and the representatives named in your estate planning documents (executor and alternate executors, trustee and alternate trustees, guardian and alternate guardians, etc.) should know where to find them. A safe deposit box at a bank is a safe place, but your representative may have difficulty gaining access to your box after your death. Therefore, most people keep their documents elsewhere. A fireproof file or safe at home is an excellent place.

3. Copies of your documents. I have a copy of your executed documents in your file at my office. You may decide to keep an extra copy of the documents at your home or office, or you may decide to give a copy to one or more of your representatives. It is possible to use a copy of your will for probate purposes if the original cannot be found. However, there is no guarantee that a copy will be accepted by the court (since a presumption arises that you revoked the will if the original cannot be found), and the procedure for getting a copy admitted to probate is more troublesome and expensive. That is why it is important to take care of the original documents.

You do not have to give your representatives or alternate representatives copies of your documents, so long as they know where to find the originals if the need arises. In some cases, giving copies to loved ones may cause more problems than it solves -- it may make it awkward to make changes to your documents, and it may increase the risk of a challenge to your documents.

If you want to make more copies of your documents, please do not remove the staples in order to remove the documents from the manuscript covers for copying. Having more than one set of staple holes in your original documents increases the chances of someone thinking that your documents are falsified. If you do not want to go to the trouble of making the copies with the documents in the manuscript covers, I will be happy to make copies of my copies at our standard per-page copy fee.

4. Personalizing your estate plan with a letter or memorandum. Because your estate planning documents are drafted to be flexible and to meet technical legal requirements, they may seem cold and impersonal. Also, there may be matters of a personal nature that you wish to express that are not covered by the documents. Frequently a good way to handle this is to leave a letter or memorandum addressed to your representative. The two most frequent uses of such a letter or memorandum are: (1) to say to whom you want items of sentimental value to go when you die; and (2) to give greater guidance to the representative regarding how to take care loved ones (usually your children) after your death. While a letter or memorandum can be very useful, there are some important points to keep in mind:

a. Letter or memo about items of sentimental value. If you are using the letter or memo to tell to whom you want particular items of sentimental value to be given when you die:

(1) Always make it clear that you do not intend to change your estate planning documents in any way. Your estate planning documents were carefully prepared at some expense to dispose of all of your property efficiently and generally in accordance with your wishes. If you write a letter or memorandum after the date of your documents which is inconsistent with your documents, there is a risk that a court will deem that you have revoked, or canceled, your estate planning documents in whole or in part, and since the letter or memo may not meet the legal requirements for a will, the letter or memo will be considered invalid. Thus, your effort to make a relatively minor change to your will or other documents could result in invalidating the whole estate plan. Don't try to change your documents without the help of a licensed attorney. If you use a letter or memo to express your wishes about particular items of property, always start the letter or memo with this language:

"I am writing this letter or memorandum to express my wishes regarding the disposition of certain things that I own that have sentimental value to me. It is my desire that my executor and the beneficiaries of my estate will honor my wishes. However, notwithstanding anything in this letter or memorandum to the contrary, I am not changing or revoking my will in any way. If there is a dispute between or among the beneficiaries of my estate about the matters discussed in this letter or memorandum, then the terms of my will shall control and this letter will have no force or effect."

(2) Don't use a letter or memorandum to cover items of significant monetary value. If you wish to leave a particular item of property to someone, and that item has real monetary value (and not just sentimental value), you should get a lawyer's help and redo your will so that the item is covered. Obviously, it is more expensive and troublesome to do this, but the letter approach doesn't work well for items of value. This is because the will, not the letter or memorandum, legally controls disposition of your property. You are depending upon your loved ones to honor the wishes expressed in the letter or memo. If they do not wish to honor the letter or memo, the terms of the will control. Obviously, if something is more valuable, the person or persons who would get the item under the terms of the will are more likely to want to disregard your letter or memo.

(3) Changing the letter or memorandum. One of the real advantages of using a letter or memo for this purpose is that you can change it from time to time without a lot of trouble and expense. Keep the letter or memo with your estate planning documents. When you want to change it, write a new letter or memo and discard the old one. Since the letter or memo is merely advisory and not controlling, it does not have to be signed with all the formality of a will or trust agreement.

b. Letter or memo giving guidance to your representatives. If you are using a letter or memo to give guidance to your executor, trustee or designated guardian:

(1) Always make it clear that you do not intend to change your estate planning documents in any way. Your estate planning documents were carefully prepared at some expense to meet technical legal requirements and to provide your representatives with a great deal of flexibility to deal with unforeseen events. I think this flexibility is important. If you do not wish to give your representatives a lot of flexibility, your documents need to be changed to be more restrictive. You can preserve the flexibility of the documents and still give personal guidance to your representatives by using a letter or memorandum. To preserve the flexibility of your documents and to keep from unintentionally revoking them, you must make it clear that your letter or memo is advisory and not controlling. Start your letter or memo with this language:

"I am writing this letter or memorandum to give the executor, trustee and guardian of my minor children guidance on matters of interest to me. This letter or memo is advisory only and does not control or supersede my estate planning documents in any way. Notwithstanding anything in this letter or memorandum to the contrary, I am not changing or revoking my will in any way. I hope that my representatives will heed my advice, but they are free to use their best judgment on all matters in accordance with the terms of my will."

(2) Changing the letter or memorandum. One of the real advantages of using a letter or memo for this purpose is that you can change it from time to time without a lot of trouble and expense. Keep the letter or memo with your estate planning documents. When you want to change it, write a new letter or memo and discard the old one. Since the letter or memo is merely advisory and not controlling, it does not have to be signed with all the formality of a will.

5. Changing or revoking your documents. You should never mark on your estate planning documents in any way. These markings could be construed as your attempt to change or revoke the documents. The laws regarding wills and trusts are very technical, and it is likely that a change that you attempt to make without a lawyer's help will not have the effect you intend. Therefore, if you wish to revoke your will or another document, please contact me or another attorney.

a. Your will. If you wish to revoke your will, be sure to do it in a way that leaves no question as to your intent. For instance, cut up the document and discard it, or conspicuously mark through the writing on every page with a large "X". Obviously, consider carefully before revoking your will unless you have replaced it with another plan.

Your will includes language revoking earlier wills you may have made. This language is effective unless you are prohibited from revoking the earlier will by the terms of a contract or other agreement. This prohibition is very rare and is likely to arise only in cases where spouses previously made a joint, or mutual, will. Therefore, unless you are subject to an agreement prohibiting you from revoking an earlier will, any earlier wills were revoked when you signed your new will. You do not need to destroy your old wills, but it generally is a good idea to destroy them to prevent confusion after your death.

b. Your statutory durable power of attorney. If you want to revoke your statutory durable power of attorney, you should contact me or another attorney. The new statutory durable power of attorney forms are easier to use but harder to revoke. You should seek my advice or the advice or another attorney if you wish to revoke it.

c. Your health care power of attorney. To revoke your Durable Power of Attorney for Health Care, you may either sign a new Durable Power of Attorney for Health Care (which automatically revokes earlier powers) or inform your agent and health provider, preferably in writing, that you have revoked the power.

6. Updating your estate plan. You should have your estate plan reviewed by an attorney or other estate planning professional periodically to assure that it still meets your needs. Also, you should have your plan reviewed if any of the following occur:

a. The marriage, divorce, illness or incapacity of you or of any member of your immediate family.

b. The death of any member of your immediate family.

c. A significant change in your financial condition (positive or negative).

d. You move to another state or country.

e. The receipt of a large gift or inheritance.

f. You acquire property which requires special consideration and handling.

g. You change your mind about how to dispose of your property and/or who you want as your representatives.

Finally, you should have your plan reviewed if there is a significant change in the tax laws which may effect your estate.

7. My representation of you. Please read through the enclosed documents carefully over the next two weeks. If I have made any mistakes, or if there is something you do not like or understand, please call me, and I will clear things up. If I have not heard from you within two weeks, I will assume everything is the way you want it, and my representation of you in this matter will cease.

In this matter, you and you alone have been my client. I owe no duty to any of your family members or other possible beneficiaries. I have no continuing duty to update your plan or otherwise represent you. Of course, I look forward to working with you again in the future should you wish to hire me to help you with revising your estate plan or with another matter.

Thank you for allowing me to provide you with these services. Good luck, and please call if I can be of further assistance.

Very truly yours,

[Law Firm]
 
 
Enclosures

     

Endnotes

1. Another recent development is NationsBank of Texas, N.A., v. Akin, Gump, Hauer & Feld, L. L. P., 1998 WL 43190 (Tex. App.-- Corpus Christi January 29, 1998, opinion not yet released for publication), in which the court of appeals determined that the net worth of the executor or trustee (NationsBank, in this case) was irrelevant in determining if the estate or trust it represents is a consumer for purposes of the Texas Deceptive Trade Practices Act.  

 

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Copyright 1998 by Glenn M. Karisch     Last Revised May 15, 1998