Understanding Your Client, 0314 SCBJ, SC Lawyer, March 2014, #2

AuthorCarrie Warner

Understanding Your Client

Vol. 25, Issue 5, Pg. 29

South Carolina Bar Journal

March 2014

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0A Lawyer's Guide to Preventing Financial Exploitation of an Elderly Client

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0 Carrie Warner

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The lawyer plays a critical role in making informed decisions and judgments prior to preparation of estate documents on behalf of a client. Make no mistake, wills and powers of attorney are very powerful documents that can either serve to carry out your client's true wishes and intentions, or serve as the perfect tool to financially exploit the elderly client and pillage his entire estate plan that he worked his entire life to build.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The focus of this article is to highlight important practical situations and considerations necessary for the lawyer to understand prior to taking on the tall task of drafting powerful estate documents for the elderly client. The points highlighted in this article could very well be the difference between a lawyer safeguarding and protecting his client's well-being and estate plan or having to notify his malpractice insurance carrier of an impending claim.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Identifying your client

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0How many times have we either experienced or heard of a lawyer receiving a phone call from an adult child of an elderly person asking the lawyer to draft a "simple" will or power of attorney for his mother or father naming him as a beneficiary and attorney-in-fact under each document, respectively? The lawyer, having never met the elderly person, prepares the documents and has them delivered to the adult child unsigned, never to see or hear from him again. Little did the lawyer know that it was his work product that put the ball in motion for that adult child to raid and pilfer his elderly parent's estate to the exclusion of the intended beneficiaries under the elderly person's previous estate plan.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Believe it or not, this kind of practice by the unknowing lawyer occurs many more times than imagined. Lawyers prepare and place these documents in the stream of commerce without thought of the disastrous consequences that may loom. Therefore, prior to drafting any estate document, it is imperative that the lawyer determines for whom he is drafting the documents, o r in effect, who his principal is. After all, it is that person to whom the lawyer owes a duty of care as the client.1 While one may argue that the duty of care is to the fiduciary, or agent, when drafting the documents, consider this: no fiduciary capacity existed until after the lawyer drafted the document. By that time, the potential malpractice had already been committed by the lawyer.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0While South Carolina courts have been requested but ultimately have refused to wade in the waters in declaring a malpractice cause of action against lawyers by intended beneficiaries, it appears that a case with facts on point may be ripe for our courts to finally give in on this issue. In Henkel v. Winn,2 the surviving wife sued her and her deceased husband's lawyer for malpractice in the lawyer's preparation of her late husband's will that effectively decreased what she would have received under her husband's previous will. The court declined to find for legal malpractice by the lawyer, citing no latent ambiguity within the content of the will itself as a means to decipher the testator's true intent. The court, however, did recognize law in other jurisdictions that support a negligence action against the lawyer thereby potentially leaving this issue open for determination when the facts present themselves.3

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Then again in Rydde v. Morris,4 the S.C. Supreme Court declined to set a legal malpractice cause of action against a lawyer as the facts there also fell short of creating any duty to intended beneficiaries. In Rydde, the question presented was whether a lawyer's failure to timely draft a will prior to the death of his client presented a malpractice claim by the intended beneficiaries of the deceased's estate. In dismissing the malpractice claim, the Court found that the lawyer owed no duty to the prospective beneficiary of a will that did not exist. However, the Court noted other jurisdictional law in acknowledging that a duty exists to non-client intended beneficiaries of an executed will where the...

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