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  • Inside Track
    July 21, 2021

    Dilemma: Estate-planning Clients, a Divorce, and Potential Conflicts

    Timothy J. Pierce

    After a client's divorce, can I represent that client in an estate planning matter if I previously represented both former spouses together on an estate plan?
    divorce house divided by gavel

    July 21, 2021 – What conflicts arise when a former client contacts you to update his or her estate plan post-divorce, if you previously drafted an estate plan for the client and the now ex-spouse when they were married?

    Question

    I did a simple estate plan for a married couple several years ago in which the surviving spouse inherited from the deceased spouse.

    The couple subsequently divorced, and they each had separate counsel – I had no involvement in the divorce proceedings. Now that the divorce is final, I have been approached by the husband to revise his estate plan to remove his now former wife as a beneficiary.

    May I undertake this representation or is it a former client conflict?

    Need Ethics Advice?

    As a State Bar member, you have access to informal guidance and help in resolving questions regarding Wisconsin’s Rules of Professional Conduct for Attorneys.

    Ethics Hotline: To informally discuss an ethics question, contact State Bar ethics counselors Timothy Pierce or Aviva Kaiser. They can be reached at (608) 229-2017 or (800) 254-9154, Monday through Friday, 9 a.m to 4 p.m.

    Answer

    SCR 20:1.9(a) governs former client conflicts and states:

    A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in a writing signed by the client.

    There are thus two elements to former client conflict analysis:

    • material adversity of interests; and

    • substantial relationship between the prior and current representations.

    Tim PierceTim Pierce is ethics counsel with the State Bar of Wisconsin. Reach him by email or through the Ethics Hotline at (608) 229-2017 or (800) 254-9154.

    The proposed estate planning work for the husband is clearly substantially related to the estate planning work the lawyer did for the couple when they were married (see ABA Comment [3] to SCR 20:1.9), so the question is whether disinheriting the former wife is materially adverse to the interests of the former wife.

    There is little authority on this precise question, but Example 1.9-1 to the ACTEC Commentary to MR 1.91 addresses it squarely:

    Example 1.9-1. Lawyer (L) represented Husband (H) and Wife (W) jointly in connection with estate planning matters. Subsequently H and W were divorced in an action in which each of them was separately represented by counsel other than L. L has continued to represent H in estate planning and other matters. Because W is a former client, MRPC 1.9 imposes limitations upon L’s representation of H or others. Thus, unless W gives informed consent, confirmed in writing, MRPC 1.9(a) would prevent L from representing H in a matter substantially related to the prior representation in which H’s interests are materially adverse to W’s, such as an attempt to modify or terminate an irrevocable trust of which W was a beneficiary. However, after the marital dissolution is final, amending H’s estate plan to remove W as a beneficiary, consistent with state law and the dissolution decree, should not be considered a conflict. Also, under MRPC 1.9(c), L could not disclose or use to W’s disadvantage information that L obtained during the former representation of H and W in estate planning matters without W’s informed consent, confirmed in writing (emphasis added).

    The reason this “should not be considered” a conflict, as alluded to above, is that there is no adversity of interests.

    This is explained more fully in ABA Formal Ethics Op. 05-434, which discusses whether it is a conflict to disinherit a client a lawyer currently represents on an unrelated matter:

    Direct adversity requires a conflict as to the legal rights and duties of the clients, not merely conflicting economic interests. There may be direct adversity even though there is no overt confrontation between the clients, as, for example, where one client seeks the lawyer's advice as to his legal rights against another client whom the lawyer represents on a wholly unrelated matter. Thus, for example, a lawyer would be precluded by Rule 1.7(a) from advising a client as to his rights under a contract with another client of the lawyer, or as to whether the statute of limitations has run on potential claims against, or by, another client of the lawyer. Such conflict involves the legal rights and duties of the two clients vis-à-vis one another.

    Applying this analysis to the circumstances dealt with in this opinion, a testator is, unless limited by contractual or quasi-contractual obligationsor by state law,free to dispose of his estate as he chooses, or to consume his entire estate during his lifetime or give it all away, leaving nothing to pass under his will. A potential beneficiary, even one who has been informed by the testator that he has been named in a testamentary instrument, has no legal right to that bequest but has, instead, merely an expectancy.Thus, except where the testator has a legal duty to make the bequest that is to be revoked or altered, there is no conflict of legal rights and duties as between the testator and the beneficiary and there is no direct adversity (emphasis added and footnotes omitted)2

    Thus, because the former wife has no legal right to inherit from the former husband, there is no conflict between the “legal rights and duties” of the now former spouses, and thus it is not a conflict under SCR 20:1.9(a).

    This scenario assumes there is no obligation on the part of the husband to provide for the former spouse, in which case there would be a conflict (as well as other problems) in undertaking the representation.

    Further, as discussed in ABA Formal Ethics Op. 05-434, there are some additional considerations involved when a lawyer is asked to disinherit a currently represented a client. On these basic facts, however, the lawyer may represent the husband.

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    Endnotes

    1 The ACTEC COMMENTARIES, FIFTH EDITION 2016 is published by The American College of Trust and Estate Counsel Foundation and is available at actecfoundation.org.

    2 SCR 20:1.7 uses the term “direct adverse” while SCR 20:1.9 uses the term “materially adverse” but neither rule articulates a difference between the terms. The recently issued ABA Formal Op. 21-497 noted that “(m)aterial adverseness, referred to by the Gillette court, “requires a conflict as to the legal right and duties of the clients, not merely conflicting or competing economic interests.”




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