SIDEBAR Spring 2018 - 12

MONTGOMERYBAR.ORG

BRACE FOR IMPACT:

THE RISE IN TRUSTS &
ESTATES CLAIMS AGAINST
ATTORNEYS

H

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making the need to protect your law firm
from the dangers of cyber breach more
important than ever.
It is no secret that malpractice claims
against attorneys have been rising on a
national level since the American Bar
Association ("ABA") began compiling
statistics, with allegations of wrongdoing
in plaintiff's personal injury and real
estate matters being the most common.
However, trusts and estates claims have
also been steadily rising over the last thirty
(30) years, from just shy of 7 percent of
all malpractice claims in 1985 to 12.05
percent in 2015. Although these may
appear to be small numbers at first blush,
this represents a nearly 75 percent increase1.
This number is certain to rise in the
coming years, with commentators and
experts predicting a statistically significant
spike due to several factors acting in
concert. Thanks to humanity's advances
in science and medicine, humans are living
longer than ever. In the United States, the
average life expectancy of a child born in
2015 was 78.8 years2, whereas a child born
in 1970 could expect to live an average
of 70.8 years3. An aging population,
combined with the huge number of people
born just after the end of World War II

(and more generally between 1946 and
1964), known colloquially as the Baby
Boomers, results in more elderly deaths
and the highest transfer of wealth than at
any other time in this country's history.
An aging population also translates into
a greater incidence of Alzheimer's disease
and dementia, raising questions of mental
capacity, elder abuse and undue influence
when estate plans are unexpectedly
changed.
As the pool of older Americans gets
larger and larger, the number of heirs
and beneficiaries disputing over an estate
increases as well, with a concomitant rise
in claims against attorneys who draft estate
planning documents, represent estates
and clients during litigation, and/or act
in a fiduciary capacity over estates and
trusts. Among malpractice claims asserted
against trusts and estates practitioners,
the most common form occurs when a
beneficiary claims that they have received
less of decedent's assets than they believe
they were entitled to, but for the negligent
estate will and/or trust drafting or
advice on the part of the attorney. Less
common, but still frequent, are instances of
scrivener's errors (drafting omissions such
as failing to include a residuary clause or
a self-executing affidavit where witnesses
predecease the decedent) and failing to
appreciate various tax consequences.

There are varying levels of general
protection afforded to trust and estate
attorneys depending upon the jurisdiction.
States such as New Hampshire and
Montana afford the least level of protection
and burden the attorney with a duty of care
towards non-client beneficiaries, under the
theory the retention's primary purpose is to
ultimately benefit the natural object of the
decedent's bounty. In Florida and Iowa, an
attorney is liable to non-client beneficiaries
only when the decedent's intent has been
frustrated and the negligence is clearly
evident within the four corners of the trust
document or last will and testament.
States which follow the strict privity
rule, such as Ohio and Texas, foreclose
malpractice lawsuits from non-client
beneficiaries even in cases of clear
negligence, assuming the lawyer has not
acted outside the scope of a clearly defined
attorney-client relationship. Of course, the
strict privity rule does not protect against
an attorney's fraud, collusion or other
malicious act. Some states have slightly
relaxed the strict privity rule in recent
years. For example, Pennsylvania now
permits intended third-party beneficiaries
to sue a drafting attorney for malpractice.
New York, another state which held
firm to the strict privity rule for many
years, now permits an estate's executor or
administrator to assert a malpractice claim

According to the ABA's Standing Committee on Lawyers' Professional Liability, which publishes a Profile of Legal Malpractice Claims study every four (4) years, trusts and estates
claims accounted for the following percentages of all malpractice claims: 6.97 percent in 1985, 7.6 percent in 1995, 8.7 percent in 1999, 9.68 percent in 2007, 10.7 percent in
2011, and 12.05 percent in 2015.
2
https://www.cdc.gov/nchs/data/nvsr/nvsr66/nvsr66_06_tables.pdf
3
http://www.cdc.gov/nchs/data/nvsr/nvsr64/nvsr64_02.pdf
1

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SIDEBAR Spring 2018

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