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. Who knew?
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 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. They assert that the law needs to catch up with changes that have taken place since the last time they reviewed this question more than 50 years ago.
Each opinion includes a lengthy history of undue influence and the presumption. It at least attempts to clarify some of the confusion that has long-existed about the presumption and how it works. No doubt it will be quoted in litigation going forward. 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 making in my recent post: The Imperfect Bandage of Undue Influence (click on name to read it). Which point is that the law of undue influence isn’t cutting it.
In both opinions, the Justices get into the weeds of undue influence law, the presumption and how it is rebutted; and both sides seem uncomfortable with how easy it is for the presumption to be undone. Their outrage however 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 outrageous when a child or housekeeper exploits a vulnerable adult. We need better law.
So, in conclusion, the MSC has spoken. It’s a long opinion, but for true probate geeks, worth the read.