Lack of Coordination: The Potential for Best Laid Plans to Go Awry
By: Martin S. Shenkman and Sandra D. Glazier
This article was originally published in Leimberg Information Services, Inc. (LISI).
In 1786 Robert Burns wrote his insightful poem commonly referred to as “Mousie”. In it he reflects that upon plowing his fields he undoes the foresight of mice who unfortunately built their nest in Burns’ field. He pens the oft used phrase that “the best laid plans of mice and men often go awry”. In the realm of estate planning, a lack of coordination in the designation of agents, assets and/or beneficiaries frequently causes even the best laid plans to go awry. While subsequent changes to designations made by a client may be beyond our control, attention to the potential difficulties arising from conflicting directions and designations of agents may be a discussion worth having. At least the client who is “forewarned is forearmed”.
Generally, clients come to us with some general, or perhaps even specific, ideas of how they wish to dispose of their property upon death. As part of a comprehensive approach to the client’s estate plan, it’s incumbent upon us to ask who they want to be responsible for administering those assets, not only upon death but also in the event of incapacity. Because the issue of asset management and control can fall under the auspices of different fiduciaries, consideration of who they will be and how they might interact and relate can be extremely important. Creating a comprehensive plan for clients often goes beyond simply drafting estate planning documents.
Planning for aging (and incapacity) requires more than just the traditional preparation of a Will, durable power of attorney (“DPOA”) (and perhaps a revocable trust). The multitude of fiduciary and quasi-fiduciary appointments clients make, almost entirely without professional input, can create conflicts and inconsistencies in the administration of the client’s affairs. Practitioners can provide great assistance to their clients when they expand the scope of their inquiry and client discussions to address issues relating to such appointments and the importance of coordination of fiduciaries named under primary legal documents. Doing so can forewarn the client of pitfalls that could undermine the safeguards the planning team is endeavoring to create. As estate planning remains extremely relevant in implementing client desires, it’s important for practitioners to evolve and consider a broader range of practical, non-technical, considerations that can make our services beneficial to all spheres of client echelons.
No Good Deed Goes Unpunished Especially When Acceptance Means a Target on One’s Back: Defending Breach of Fiduciary Duty Claims in the Context of Trust and Estate Administration By Sandra D. Glazier, Esq., Lipson, Neilson, Cole, Seltzer & Garin, P.C., April 17, 2017.
Family members or trusted family consultants are often honored when they learn they’ve been nominated to act as a trustee. They take the appointment seriously, but may not have a background in trust administration. Perhaps they perused or read the pertinent instrument in its entirety when they accepted the appointment. They might interpret oft included boilerplate language as instilling them with broad (if not unlimited) powers. The enumeration of powers might lead non-professional fiduciaries to the mistaken belief that they can handle the assets as they do their own — or in the same fashion that the settlor did.
Since they view themselves as ‘‘reasonable’’ they may believe that they need only to xercise their discretion as they deem appropriate. They may even believe they know what the settlor wanted and adapt their decision making accordingly. For purposes of these materials, we will generally assume that the trustee acted in good faith. Unfortunately, it’s not uncommon for nonprofessional trustees to be unaware of statutory and common law that may supersede, supplement or otherwise override provisions contained within the trust instrument.
Further complicating this area may be that the settlor was the glue that held the family together. When the settlor is no longer able to manage his own affairs, no longer has capacity, has otherwise become vulnerable or has died, familial rivalries may find a new forum in which to play out. Litigation in this arena often is more than just about the money. It’s often emotionally charged and, even if carefully managed, such litigation can result in irreparable family rifts…Click here for full article.
Independent Insurance Agents: Order Takers or Fiduciaries?
Article co-written by C. Thomas Ludden, litigation Partner at the Lipson Neilson law firm, and James R. Redeker, claims manager in the Insurance Agent’s E&O Program at SwissRe Corporate Solutions.
An insured has a significant loss, but discovers that the insurance company will not cover the loss under the insurance policy that had been purchased. One of the potential options that an insured may consider pursuing is a claim against the insurance agent who was involved. Whether that claim is ultimately successful may depend upon whether the agent is considered a fiduciary of the insured or the agent has assumed duties in addition to the duty of ordinary care.
The answer to these questions depends upon:
1. Whether the agent is an independent or captive agent;
2. What duties are normally imposed by the applicable jurisdiction;
3. Whether the agent and the customer have agreed that the agent would perform additional duties;
4. Whether the agent has performed acts or omissions that trigger additional duties; and
5. Whether unique circumstances exist that will impose additional duties upon the agent…Click here for full article.
Staying Out of CFPB Jail (Part 1)
Article written by Dax Watson is the first of a three part series on the enforcement powers of the Consumer Financial Protection Bureau (CFPB). Most of us have heard of the CFPB and that it is not only coming to town…it is already here. In turn, now is the time for all professionals in the real estate field to learn how to stay out of CFPB jail! So, what should real estate licensees be mindful of?…click here for article
How Do I Stay Out of the Lawyer’s Office?
Article written by Dax Watson provides tips for Real Estate Agents. This article is on page 3 of the December 2015 issue of WestWords, published by WestUSA Realty. Dax Watson is the managing partner of the firm’s Phoenix office. Dax focuses his practice in commercial litigation with an emphasis in real estate matters and professional liability defense. In his capacity as a defense attorney, he defends professionals in the fields of real estate, law, accounting, architecture, and engineering.
Can Insurance Defense Counsel ‘Serve Two Masters’?
Co-authored by Jessica A. Green along with attorney Joseph Hainline, article published in the June 29, 2015 issue of The Whisper, the newsletter of the DRI’s young lawyers committee. Jessica is an attorney in the firm’s Las Vegas office. Her practice focuses on professional liability defense, employment law, bad faith insurance defense, and commercial litigation. She is the Secretary of the Nevada CLM Chapter, and a DRI Professional Liability Young Lawyer Liaison.
The Future of Senior Housing.By Steven H. Malach, article published by the Open Retirement organization (2015).Mr. Malach heads the firm’s Estate Planning/Probate practice group, which also operates under the name Center for Estate Planning. He is a member of the National Academy of Elder Law Attorneys (NAELA).
Understanding a Child’s Right to Special Education.By Mary T. Schmitt Smith, article published by The Special Needs Alliance (2014)Mary is Michigan’s first Certified Elder Law Attorney and is AV-Rated by Martindale Hubbell for the past 16 years. She has served on the Board of Directors of the National Academy of Elder Law Attorneys (NAELA) and is a Founding Member of the Special Needs Alliance, a national network of lawyers dedicated to Disability and Public Benefits Law..
A Road Map to Attorney Fees in Domestic Relations Actions.By Sandra D. Glazier, article published in the Michigan Family Law Journal (2014).With more than 33 years of experience, Sandra has handled a multitude of complex cases. In the probate litigation arena, Glazier has represented parties in some of the largest estates subjected to litigation in Michigan. She is the Chair of the Oakland County Bar Association’s Probate Committee for 2015-2016.
When Is a Trustee Not a Trustee (in the Context of Real Estate Businesses Held in Trust, for Purposes of the Net Investment Income Tax)?By Sandra D. Glazier, article published in Bloomberg BNA’s Tax and Accounting News and Analysis (2014).
Recent Nevada Supreme Court Advance Option examines the statute of limitations discovery rule applicable to legal malpractice actions.Moon v. McDonald Carano & Wilson, LLP 129 Nev., Advance Opinion 56 (August 1, 2013)
By Joseph P. Garin and Jessica A. Green Allowing varying accrual dates for litigation and transactional malpractice claims undermines the discovery rule. Sierra International, Inc. (“Sierra”) entered into a $1.4 million promissory note with Appellant Moon (“Moon”). Sierra eventually defaulted on the promissory note and filed a Chapter 7 voluntary petition in Bankruptcy Court in 2001. Moon hired McDonald Carano Wilson, LLP (“MCW”) to represent their interests in Sierra’s bankruptcy action. Sierra’s bankruptcy action concluded in 2008.
“Business Enterprise Exclusion” Defeats Coverage Where Entity Claiming Legal Malpractice was Managed and 27% Owned by Partners of Law Firm Accused of Malpractice Am. Guarantee & Liab. Ins. Co. v. Flangas McMillan Law Group, Inc., 2:11-CV-188-KJD-RJJ, 2012 WL 628511 (D. Nev. Feb. 24, 2012) By Joseph P. Garin A real estate company asserted claims for legal malpractice against an insured law firm. The real estate company was managed by 2 attorneys in the insured law firm who also owned a combined 27% membership interest in the real estate company.
Contribution: A New Remedy for Entireties Property?By Sandra D. Glazier Tkachik v Mandeville,decided by the Michigan Supreme Court in July, 2010, appears to be yet another example of “bad facts making bad law”. In Tkachik, the parties held interests in two separate unrelated properties as tenants by the entireties. The properties statutorily passed to the husband upon the wife’s death, outside of probate (and by operation of law), as the surviving owner of the properties, subject only to the joint obligations secured against such properties.