Relish the moment because this is as exciting as probate law gets.
We’ve written about the case before (See: This is Awkward). Attorney prepares an estate plan (will and trust) for non-relative, leaving millions to said attorney and attorney’s family.
Trial court says: An attorney can’t do that under the rules of professional conduct, and therefore the estate plan is void – on summary disposition.
Court of Appeals reverses the trial court. COA says: While the lawyer may face discipline for the ethics violation, the validity of the trust is not implicated by the ethics rule. That decision was 2 to 1.
Now, the Michigan Supreme Court reviews the Court of Appeals, and it’s a 3 to 3 tie [The 7th Justice abstains because he was on the COA panel that decided it – and was one of the two votes on the prevailing side.] Apparently a tie means the COA decision is affirmed.
So the issue is whether a violation of the MRPC rule 1.8(c) (which precludes an attorney from creating estate plans for non-relatives in which they receive a substantial benefit) has any role in a trial contesting the validity of the estate plan? The answer is “no, it does not.” While everyone agrees that the attorney is a fiduciary and that, as such, the presumption of undue influence is in play, the prevailing opinion is that the ethics violation, in and of itself, is not a factor in the case.
It’s a Long Decision
As indicated, there are two opinions, each with 3 signatories. In all it’s 53 pages long. Click here to read the case.
The three who vote to affirm the COA ultimately conclude that it’s not their role to change the law of undue influence to enforce ethical obligations of the bar. The other three see this as an opportunity to do just that. Their approach would be to treat a violation of the ethics rule as giving rise to an per se finding of undue influence. They assert that the law needs to catch up with changes that have taken place since the last time the MSC reviewed this question more than 50 years ago, which changes included the adoption of MRPC 1.8(c).
Each opinion includes a lengthy discussion of undue influence and the presumption. It at least attempts to clarify some of the confusion that exists about the presumption and particularly about how it is rebutted. This case will no doubt be quoted in litigation going forward. So if you do this kind of work, you need to read this case.
They’re Making My Point
The Supremes don’t know it, and likely won’t revisit this issue in my lifetime, but their decision demonstrates the point I was trying to make in my recent post: The Imperfect Bandage of Undue Influence (click on name to read it). My point is that: Undue influence isn’t cutting it.
In both opinions, but especially the opinion of the non-prevailing Justices, the Justices seem uncomfortable with how difficult it is to prove undue influence and how easy it is for the presumption to be rebutted. For me though, their distress is too narrowly focused. Even the side that would change the law to prevent this result in this case, would only do so in situations where a lawyer is involved. From my perspective, it is just as suspicious when a benefiting child or housekeeper prepares the will, deed, beneficiary designation, etc..
So, in conclusion, the MSC has spoken. It’s a long opinion and long awaited by many in the probate community. The facts of the case and the evenly divided court add a dash of drama. Required reading for probate geeks.