An attorney may draft a revocable living trust with a pour-over will for a client and be named as trustee and/or personal representative. Such an arrangement does not constitute a gift under ER 1.8, but the lawyer may not recover trustee fees in addition to legal fees for the same work. The lawyer must be able to exercise independent professional judgment when acting as both trustee and counsel to the estate. [ERs 1.8, 2.1]
The inquiring attorney represents a client who has requested that the attorney draft a revocable living trust with a will that pours over into the trust. The client has requested that the attorney be named as the personal representative of the will and as successor trustee under the trust. The attorney has advised the client that the attorney would prefer that the client name a family member, a trusted friend or a corporate fiduciary such as a bank as personal representative and successor trustee. The client has rejected the option of a corporate fiduciary and the only family member the client would trust to serve in such a capacity has declined.
Is it ethically proper for an attorney who drafts a revocable living trust with a pour-over will on behalf of a client who is both the trustor and testator (testatrix) to be named as a successor trustee and personal representative in such documents and ultimately to serve in such capacity?
Relevant Ethical Rules
ER 1.8 Conflict of Interest: Prohibited Transactions
ER 2.1 Advisor
ER 1.8(c) provides:
A lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse, a substantial gift from a client, including a testamentary gift, except where the client is related to the donee.
This provision was considered in South Carolina in Opinion 91-07 (4/91) and it was held that a lawyer could draft a will or trust agreement naming himself as personal representative or trustee at the client's request. Similarly, in Opinion 91-1, the Formal Advisory Opinion Board of the State Bar of Georgia held that a lawyer who drafts a will or trust instrument for a client may also be named as executor or trustee provided that the lawyer does not promote himself or exert undue influence over the client's choice of executor or trustee, the lawyer obtains the client's consent in writing and the lawyer charges a reasonable fee for his services. Although this opinion was decided under the Model Code rather than the Model Rules, the standard set forth in the Georgia decision will remain equally applicable. This decision stated that the lawyer should disclose at a minimum the following: 1) other potential choices for executor and trustee and their relative abilities and fees; 2) the role of the lawyer as fiduciary and as counsel and his fees; 3) the possibility, if permitted under local law, that the lawyer may retain his own firm to represent the estate or trust an the fee anticipated for this representation; and 4) the lawyer should advise the client concerning the desirability of independent counsel for the client in making this decision.
The Committee agrees with the South Carolina and Georgia opinions and is of the opinion that ER 1.8(c) does not prohibit an attorney from writing a will or trust naming the attorney as successor trustee, executor, or even initial trustee. Moreover, such appointments would not constitute a gift under ER 1.8(c). The Committee notes, however, that the fees received as successor trustee may not be in addition to legal fees charged for the same work. Attorneys serving in such capacities should be cognizant of the possible conflicts in such a position if litigation ensues.
Another ethical rule involved is ER 2.1, which requires that a lawyer "exercise independent, professional judgment and render candid advice." The lawyer must decide in each circumstance whether the lawyer could exercise her independent, professional judgment and render candid advice if the lawyer or her law firm was acting both as executor/trustee and lawyer for the trust or estate.