Plan To Be 100

New published Court of Appeals opinion. Click here to read it.

Lawyer prepares an estate plan for client (and purported friend). The estate plan leaves most of the multi-million dollar estate to himself (the lawyer) and the lawyer’s son.

This is against the Michigan Rules of Professional Conduct for lawyers, which rules prohibit lawyers from making themselves beneficiaries of estate plans that they prepare for non-family members.

The trial judge rules in favor of the parties seeking to set aside the document. The trial court says that the violation of the Rules of Professional Conduct makes the estate plan invalid.

The Court of Appeals reverses – meaning that while the Attorney may face disciplinary action by the State Bar for violating the Rules of Professional Conduct, these rules do not control the outcome of litigation over the validity of a document prepared in violation of those rules. Rather, the Court of Appeals says this is a case in which the normal rules of undue influence apply, and because the attorney who prepared the document had a position of trust (fiduciary relationship) with his client, a presumption of undue influence applies.

Suffice to say cases like this make lawyers uncomfortable. These things shouldn’t happen. If this individual really was so friendly with his attorney that he wanted to leave his estate to him, the simple solution would have been to have this client go to another lawyer to have his documents prepared.

It is an important decision, in that it clarifies that the Rules of Professional Conduct which control the way lawyers can act, do not control the outcome of civil actions in which the attorney engaged in professional misconduct.

The issue however may not be settled. There is enough money involved so that it is almost certain that the Michigan Supreme Court will be asked to review the Court of Appeals’ decision. Whether the Supreme Court elects to do so, and what they conclude if they do, will be interesting. Stay tuned.