SBM - State Bar of Michigan

RI-291

April 23, 1997

SYLLABUS

    Where a lawyer has been asked by a client to draw up a testamentary device or trust, the lawyer may not suggest that the lawyer be named as the Personal Representative or Trustee to serve without bond for a reasonable fee. However, the lawyer may accept the nomination if asked independently by the client, provided the lawyer makes the appropriate disclosures to the client.

    References: MRPC 1.8(a) and (c), 1.7(b), 7.3(a).

TEXT

The inquirer is a lawyer practicing in the field of Probate and Estate planning who finds that some clients seek testamentary devises or trusts, but do not have any individual or institution that they wish to nominate as personal representative or trustee.

The inquirer poses four related questions: (1) The lawyer asks about the propriety of suggesting that the lawyer (inquirer) be named in the instrument as personal representative or trustee, to serve without bond and for a reasonable fee; (2) In the event the lawyer cannot suggest such a nomination, may the lawyer properly agree to the nomination if the client independently asks the lawyer to serve; (3) The inquirer asks about the propriety of the lawyer (inquirer) drafting the instrument to name the lawyer as the lawyer for the estate or trust, regardless of who is nominated as personal representative or trustee; and (4) If such nomination is proper, must the lawyer subsequently advise the client, that despite the nomination, the personal representative or the trustee has the ultimate choice relating to who will actually serve as counsel for the estate or the trust.

There are a number of Rules of Professional Conduct which provide guidance in answering these questions.

MRPC 7.3 states:

    "(a) A lawyer shall not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. The term "solicit" includes contact in person, by telephone or telegraph, by letter or other writing, or by other communication directed to a specific recipient, but does not include letters addressed or advertising circulars distributed generally to persons not known to need legal services of the kind provided by the lawyer in a particular matter, but who are so situated that they might in general find such services useful, nor does the term "solicit" include "sending truthful and nondeceptive letters to potential clients known to face particular legal problems" as elucidated in Shapero v. Kentucky Bar Ass'n, 486 US 466; 108 S Ct. 1916; 100 L Ed 2d 475 (1988)."

Clearly, a suggestion by the lawyer that the lawyer be appointed to serve as the personal representative or trustee would constitute solicitation, and is therefore prohibited by the Rules of Professional Conduct.

MRPC 1.8(a) and (c) state:

    "(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client unless:

      "(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner that can be reasonably understood by the client;

      "(2) the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and

      "(3) the client consents in writing thereto."

Providing further insight is the general rule relating to conflict of interest, MRPC 1.7(b) which states:

    "(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests unless:

      "(1) the lawyer reasonably believes the representation will not be adversely affected; and

      "(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved." Emphasis added.

Here, clearly in the first question the inquirer seeks to secure multiple representation as it relates to the client on very favorable terms including serving without a bond and for a fee that the lawyer feels is reasonable, but the real question would be whether or not that is reasonable to the estate and to the client under all of the circumstances.

There appears to be no prohibition against the attorney accepting the nomination if independently asked by the client, however, counsel must consider Michigan Rule of Professional Conduct 1.7(b)(2) - Conflict of General Interest, which provides that the lawyer must provide complete disclosure to the client, detailing both the pros and cons of the lawyer serving as the personal representative of the estate. Counsel must also comply with MRPC 1.8(a)(2), which requires the lawyer to give the client a reasonable opportunity to seek the advice of independent counsel in the transaction.

It appears that no rule of professional conduct prohibits the lawyer from drafting the instrument to name the lawyer as the lawyer for the estate or the trust provided there have been no improper suggestions or solicitation, as presumably that is the very reason for the client visiting and consulting with the lawyer to begin with. However, the lawyer does have the responsibility of notifying the client at the time of drafting the instrument that notwithstanding the nomination of personal representative or trustee, the fiduciaries may choose whomever they wish to act as counsel for the estate or the trust, in line with the requirements of MRPC 1.7(b)(2).

In conclusion, it appears that the lawyer may not suggest that the lawyer be named as the personal representative or trustee to serve without bond for a reasonable fee, however, the lawyer may accept the nomination if asked independently by the client, provided the lawyer makes the appropriate disclosures to the client.

Moreover, the lawyer may draft the instrument naming the lawyer as the lawyer for the estate or the trust, however, the lawyer should advise the client that despite that nomination the personal representative or the trustee will ultimately have the choice of counsel, thus avoiding any potential claims of conflict of interest at a later point.