Practice Pitfalls: Wills & Estates

In the September 2010 issue of LAWPRO Magazine, we asked our claims counsel about what they feel are the biggest malpractice hazards in each area of law based on the claims files they work on every day. Here is an excerpt from that article that discusses the risks that can arise when dealing with elderly clients. Click here to read the full article “Practice Pitfalls”.

Changing demographics are leaving their mark on trends that concern LAWPRO counsel: We are seeing increased potential for claims surrounding issues of the capacity of elderly clients and undue influence. The increased number of elderly clients with large estates also increases the risk that family disputes will entangle the lawyer.

If elderly clients come in requesting a major mortgage refinancing or change to their wills, it is important that lawyers not just take matters at face value. Dig below the surface to find out what’s going on. Be very wary of undue influence and ask “who’s benefiting from this arrangement?”

Don’t have the client in the same room as their son or daughter if they’ve all come to discuss changing the will or refinancing the family home for the children’s benefit. If there is a language barrier, don’t just rely on the “translation” of another family member. Have written proof that the advice was given regarding risks inherent in what the elderly clients are proposing or the need for independent legal advice, and perhaps have the client provide a letter explaining his or her motives.

Some lawyers now tape their meetings with clients in such situations (with client consent, of course). And finally, the lawyers must be aware of who they are acting for and avoid giving advice to parties with conflicting interests. All of this puts a burden on the lawyer, but as Mitch Goldberg, Unit Director & Counsel at LAWPRO says, “the reality of practice today is that you have to spend enormous amounts of
time protecting yourself.”

Complicating things further is the question of capacity. When acting for elderly clients who want to make significant changes to their wills, lawyers have to be very careful about how they satisfy themselves that the clients have capacity and how evidence of that capacity is documented, because there’s a good chance that the will may be challenged and the lawyer will be drawn into the dispute.

Yvonne Bernstein, Litigation Director & Counsel at LAWPRO, sees this as an issue of spotting the danger signs. “If you have clients who are in their late 80s, in a nursing home, with a substantial estate and numerous children, I see red flags. And if the new will distributes the estate in a dramatically different way so that some children get less than what they would have received under the old will, I see a will challenge on the horizon.” Having documentation that steps were taken to rule out undue influence and verify capacity could protect lawyers from costly claims.

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Comments

  1. Among other things, Dan Pinnington’s post says that a family dispute could entangle a lawyer, where an elderly client with a larger estate had been unduly influenced in a major mortgage refinancing.

    We know that very many people with smaller estates have their life savings in the value of their homes. This might give rise to even more claims arising out of registered transfers or mortgages.

    Claims of this kind might not only entangle the lawyer acting for the elderly client, but also entangle a financial institution or a land registration system. In many cases, the lawyer for a financial institution will also act for the elderly client or family member and know of a “red flag.”

    A financial institution or land registration system might have an incentive to try to guard against this kind of problem. The system protects property rights. A problem will inevitably entangle the institution or system. The institution’s mortgage might be affected. The system might even have to compensate for the loss.

    Rule 2.04 of the Ontario Rules of Professional Conduct and the Ontario electronic land registration system try to cover fraud, but not elder abuse.

    The rule shows that a lawyer mustn’t usually act for both parties in a transfer of real property, but this doesn’t apply where the parties are related.

    The Ontario Electronic Registration Procedures Guide reflects this, by saying that the system will require the lawyer signing for both parties to state that he or she is signing “in accordance with the lawyer’s professional standards.” The guide shows that this refers only to rule 2.04.

    Perhaps law societies, their insurers, financial institutions and land registration systems can find ways to assess the risks and guard against these problems.

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