Views From a Former Member of a Grievance Committee: Hot Buttons For the Estate Planning, Probate and Trust Attorney

I have had the great opportunity to be on three Grievance Committees (the “Committee”) for a total of nine years. I would like to say my participation on the Committee has been purely altruistic but my experience has taught me I am not often “purely altruistic”. I realized that when I opened my own practice in 1990 I needed to understand how The Florida Bar ethics rules practically affected my practice. I have had the good fortune to interact with attorneys in different areas of practice, such as criminal defense (most interesting), personal injury (most entertaining), civil litigation (sometime complicated), securities (always complicated), family (most drama), prosecuting attorneys and public members from air conditioning company owners to real estate developers, to certified public accountants and to trust officers. My relationships with these fine individuals developed through discussions in the Committee meetings and have enhanced my practice, not only through referrals, but also in educating me in other areas of practice and helping me become a true “counselor” to my clients.

I have had the opportunity to review situations where I think to myself in total indignation “I can’t believe he or she did that” (usually stealing) to “I have to go back and check my files to be sure I did not do that” to everything in between. I have had the privilege to act as a chairperson of a Committee and presided over evidentiary trials with the accused attorney represented by excellent attorneys. This article is written to share my thoughts and experiences as to certain “hot buttons” applicable to estate planning, probate and trust attorneys, suggestions on how to avoid having a complaint filed and the general procedures of the grievance process if a complaint is filed against you. I have obviously omitted names and exact circumstances because of confidentiality of the proceedings. Certain cases are public record. I also want to reiterate these are only the opinions of the author. Ethics opinions should be reviewed and specific questions directed to the ethics hotline at 800-235-8619.

ESTATE PLANNING

In my experience clients do not generally file complaints in the drafting of the estate planning documents as most complaints generally arise after the death of the client. Nevertheless, complaints in this area are primarily communication, competence, fees, and conflict of interest.

Communication. Committee members (remember at least one–third of the members are public members) are generally amazed when attorneys do not return phone calls, sometimes for weeks. This complaint is easily avoided by having an office policy that every phone call must be returned by you or your assistant within 24 hours of the call. Documentation of your return phone calls also provides the Committee objective evidence that you or your staff actually called the complainant particularly when the complainant states they have not heard from you in weeks or months. Sometimes clients will get mad at the attorney because they do not get the response they want and may file a complaint that you have not returned their calls when they are calling you 10 times a day. Documentation refutes those false complaints. If you are in trial then you should train your assistant to return those phone calls. Some clients prefer e-mails rather than phone calls. When you respond to a client via e-mail, print and file the e-mail or save it to the file on the computer. Software programs, such as Amicus, automatically assign e-mails and telephone calls to the appropriate file. Some practitioners avoid the use of e-mails because e-mails are discoverable and often language in an e-mail is not carefully thought out as in written correspondence.

Competence. Clients complain when an attorney advises the client that he or she can provide certain estate planning techniques, for example a qualified domestic trust, for which the attorney is not currently qualified to handle. Instead of turning down the client and referring to a qualified attorney, the attorney signs a fee agreement with the client. The comment to the applicable rule provides that an attorney can perform legal work for which the attorney does not have experience but the attorney must research and become qualified to handle such a matter. If the attorney realizes that he or she can not adequately handle the matter, then he or she may avoid the client ( see communication above) because they have already spent the money advanced by the client (which is another issue). Unfortunately, the incompetence is often not discovered until after the death of the client. If an attorney finds that he or she can not handle a matter, then the attorney should either advise the client and refund the client’s advance payment or consult with a more experienced attorney and be willing to pay the experienced attorney for their time.

Excessive Fees. Estate planners often charge fixed fees for wills and trusts and the client agrees and willingly signs the fee agreement. Such a fee agreement does not prevent the client from filing a grievance against an attorney for excessive fees. Committee members will review the fee agreement but if, for example, an attorney counsels a client and determines the client needs a simple will and the attorney charges and collects an exorbitant fee (many times a family member reviews the fee agreement and complains), the Committee members will not look favorably upon such an fee agreement unless there is a valid explanation, not “the client signed the fee agreement and therefore the fee is not excessive. ” If, however, the simple will is not “simple” and involves complex provisions, those factors will influence the outcome. Generally Committee members request time records even if a fixed fee agreement is signed. Committee members, especially public members, understand time records. Committee members will want to know how many hours the attorney spent on the matter. While time records generally do not apply to criminal, personal injury matters and certain probate matters, the hourly rate is still what Committee members understand. Remember you, the attorney, have to defend your fee and your time records are the best defense.

Conflict of Interest. A complaint alleging conflict of interest in the planning context usually arises in the representation of multiple parties in an estate planning vehicle such as a family limited partnership or limited liability company. When representing multiple family members it is critical that an attorney have the clients sign conflict letters and the attorney must advise the clients of the potential conflicts.

The Florida Supreme Court amended the conflict rules in 2006 and added, among other definitions, definitions of “informed consent “ to mean “the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternative to the propose course of conduct”; “writing” to mean ”tangible or electronic record of a communication or representation, including handwriting, typewriting, printing, photostating, photography, audio or video recording, and email”; and “signed” writing to mean an electronic sound, symbol or process attached to or logically associated with a writing and executed or adopted by a person with the intent to sign the writing.”

An attorney can represent a client if there is a conflict of interest IF the lawyer believes that he or she can represent the client competently and diligently, the representation is not prohibited by law and each affected client gives informed consent, confirmed in writing or on the record at a hearing.

Determining Competence of the Client. This area is definitely a current hot button. While a lawyer is not a doctor certain indicators of undue influence (i. e. the Carpenter case ) may be apparent. This complaint arises when the attorney drafts the estate planning documents, perhaps omitting a natural beneficiary and replacing the natural beneficiary with someone else. In my experience the complaint arises in that the attorney “should have known” that the client was not able to understand and change their documents because of diagnosed Alzheimer’s or some other dementia. If the attorney can document any doubtful cases and more importantly be cognizant of the facts at the time of the drafting, such as the beneficiary driving the client to the attorney, the beneficiary retaining the attorney, the client not willing to talk to the attorney without the beneficiary present, then such documentation may alleviate the problem. On your initial questionnaire you may ask about recent diagnosis and document their appearance and demeanor.

Some attorneys videotape the signing of estate planning documents to evidence the competency of the client. Videotapes have been shown to the Committee members. If an attorney videotapes, then open ended questions should be asked. When Committee members hear only yes or no answers, an argument can be made that the client is being instructed off camera as to what to say. Just be aware that a videotape can work against you if not done properly.

I watched a video where the testator obviously looked coached and answered only yes or no to questions for about a half hour. It was not convincing to the Committee members that the testator was competent and the Committee found probable cause as the client had been diagnosed with Alzheimer’s at the time the disputed will was prepared.

POWERS OF ATTORNEY

Conflict of interest. Conflicts of interest issues arise while advising clients in the drafting of durable powers of attorney and durable health care powers of attorney. When the client names as attorney-in-fact the lawyer drafting the document, unless good reason exists, such documents are closely scrutinized by the Committee. The fastest way to antagonize children and siblings is to draft such powers of attorney taking the children and siblings out as attorney-in-fact and drafting yourself in the document as attorney-in-fact. While such actions seem obvious, attorneys still do it. Just do not put yourself in as attorney in fact unless there is no other way to help your client and you have documented in the file the reasons together with a conflict of interest letter. Better yet, just avoid it.

Further an attorney should not make provisions for the attorney or any one related to the attorney in such documents. If that situation arises and the attorney believes that the client really wants to draft that language refer them to another independent attorney. Do not get involved in that situation. My experience is that, no matter the reason, Committee members have a great distaste for attorneys who are appointing themselves.

PROBATE AND TRUST ADMINISTRATION

In my experience most complaints arise in probate and trust administration proceedings because beneficiaries find out how much and when they are receiving money and/or tangible possessions. Do not always believe your client when they say “my kids would never fight”. After parents die sibling “issues” arise more often than not. Thus, it is important to document, document, document your clients’ wishes. The dynamics in a family go much further than money and many times siblings have deep seated resentments that have been avoided while the parents are alive but become obvious when dividing money and especially sentimental tangible property.

Diligence. This complaint frequently arises against probate attorneys. It appears that some probate attorneys take their time proceeding with probate and what makes the matter worse is that the client is not informed of the status of the proceedings. Accordingly every attorney who practices in this area should have a “tickler” system to remind the attorney or paralegal to advise the client of the status of the probate and document these reminders. Many attorneys who do not normally practice probate may probate a will for a relative or friend because it is “only a form”. Unfortunately, too late the attorneys find out that these ”forms” are just forms and the statutes and rules can be just as complicated as the original drafting. Children and heirs will file a complaint against you even if you are a “nice person”. Further, while paralegals often prepare many, if not all, the probate pleadings (under the supervision of the attorney), an attorney’s phone call to a client will work wonders in deferring a complaint in this area. Keep the client informed. Even if you are delayed then let your client know so the client is not calling you first.

In one proceeding a complaint was filed in which beneficiaries were litigating over the value of assets and to whom the assets should be distributed. One of the beneficiaries complained because they wanted a partial distribution from the trust and the litigation took a long time – three years. Fortunately, the attorney had documentation regarding the litigation and documentation advising the personal representative/trustee. The attorney presented the documentation to the Committee and the complaint was dismissed. To protect the personal representative and trustee the assets had to be held in the estate and trust until the litigation was resolved. Further many attorneys and complainants appear to not understand that the client is the personal representative, not the beneficiaries. While there may be duties to protect the estate for the beneficiaries the client is still the personal representative.

Competence. As discussed above attorneys who do not practice probate often will do a probate for a friend or relative because the attorney believes it is only a form and the attorney does not know the probate rules or the applicable statutes.

During my most recent time on the Committee, several attorneys have had a misunderstanding of homestead. The homestead has been called a “legal chameleon” and is extremely complicated. A recent court referred to homestead as “the leading cause of cerebral herniation” for probate lawyers and judges. Any time homestead is part of an estate or trust administration a “red alert” should sound in your head and particular attention should be made as to whether the homestead can be validly devised and to whom. Again document your discussions with your clients.

In one situation the personal representative sold the homestead, made specific bequests from the proceeds of the sale of the homestead and then distributed the balance of the proceeds to a relative, who was an heir pursuant to the intestacy statute. The attorney never advised the personal representative that the homestead vested immediately in the beneficiary heir and that the specific bequests did not have to be satisfied. Recent case law has clarified that finding. Even if the law is ambiguous an attorney should advise their clients as to the risks of such actions. In this case luckily no claims were filed by creditors and the heir did not want the money returned from the specific devisees so there was no harm. The Committee members, however, recommended that the attorney take continuing education classes regarding homestead and such education classes were at the attorney’s expense. The original complaint was forwarded to the Committee as a diligence complaint, but led to a competence rule. Once the Committee has a complaint and starts the investigation if the investigating member (or any other Committee member) finds another violation of the ethics rule that violation can be added to the original violation.

Another homestead issue created problems for the drafting attorney after the death of the decedent. Boyfriend and girlfriend were represented by the same attorney. Attorney drafted a revocable trust for boyfriend, and boyfriend transferred his homestead into such trust. The trust provided that the homestead would be distributed to his girlfriend at a certain age. The girlfriend had creditors that boyfriend wanted to avoid. Boyfriend and girlfriend later married and returned to the same attorney and inquired whether any documents needed to be changed or amended in light of the marriage. Attorney said no. Unfortunately, when husband died, the probate attorney discovered that the homestead distribution in trust was invalid. Pursuant to Florida law spouse (former girlfriend) received a life estate in the homestead with the remainder distributed to husband’s daughter, the stepdaughter of wife. Wife obviously was very upset and intended on filing an ethical complaint against the attorney. Remember even if the issue can be resolved (such as purchasing stepdaughter’s interest) the complainant can always file a complaint.

Excessive fees. Fees are another hot topic in this area. Percentage fees are presumed reasonable and allowable under Florida law. It is important to understand that even if the client and the beneficiaries sign such a percentage fee agreement, it does not mean the client and the beneficiaries can not complain. For example, assume you are representing a personal representative of an estate worth a million dollars. The statutory rate allowed is $ 30,000 and you spend 20 hours on the matter and your paralegal spends 50 hours on the matter. The client complains because the estate consisted of a homestead and one stock account. Client talks to another attorney who said that it should cost at the most $10,000 – $15,000. The client then files a complaint. Even thought the statute permits the statutory percentage as a presumptively reasonable amount, you should have time records to show the Committee. The attorney must remember that Committee members are not always probate attorneys and even though the statute provides a statutory rate the fee must be reasonable under the rules. The fee agreement signed by the client and the beneficiaries’ will weigh in the attorney’s favor; however you do need to have sound reasoning to avoid an excessive fee argument.

In one complaint an attorney completed a summary administration and the fees were calculated on the total amount of the probate estate including homestead. Of course the attorney can get compensated for work on homestead issues but homestead is not an asset of the probate estate. The provisions for fees for homestead should be clearly documented.

A proposal to amend the Rules Regulating The Florida Bar regarding fees and costs (Rule 4-1. 5) has been approved by the Board of Governors and is pending approval of The Supreme Court of Florida. Apparently there has been much confusion between the term “advance fees”, “flat fees” and “retainers”. The comments to the proposed amendment to the rule state that an “advanced fee” is a sum of money paid to the lawyer against which the lawyer bills the client as legal services are provided and such fee is the client’s property and must be placed in the lawyer’s trust account. A “flat fee” is a sum of money paid to a lawyer for all legal services to be provided in the representation and such fee is the property of the lawyer and the funds should be placed in the lawyer’s account and not in a trust account. A “retainer” is a sum of money paid to a lawyer to guarantee the lawyer’s future availability and is neither a payment for past legal services nor for future services. A retainer is property of the lawyer and the funds should be placed in the lawyer’s account and not in a trust account. This amendment also clarifies that the test of reasonableness applies to ALL fees and that a nonrefundable fee must be clarified in writing, together with the intent of the parties as to the nature and amount of the nonrefundable fee. This amendment is NOT in effect as of the time of the writing of this article.

Conflict of Interest. In another interesting case that arose after the death of the decedent the attorney previously drafted a pour over will and joint revocable trust for a husband and wife with the wife being the sole beneficiary of the joint trust during her lifetime. The attorney represented both husband and wife who both had children from prior marriages. After both parties’ death the assets were to be distributed to all children (his and hers). Upon husband’s death, the surviving spouse went to the same attorney, withdrew all of the assets from the joint trust (the joint trust was revocable until both spouses’ deaths) and placed all the proceeds into her own revocable trust (which the same attorney drafted) with her own children as beneficiaries to the exclusion of her stepchildren. Stepchildren filed a complaint against the attorney indicating that the attorney knew the father wanted those assets to be distributed to the stepchildren upon wife’s death and nevertheless represented the surviving spouse in transferring the assets into her own account. The attorney had neither documented his advice nor the issues to the decedent’s beneficiaries. The Committee evaluated the competence and conflict of interest rule and had an evidentiary hearing.

Responsibilities of Supervisory Attorney. To handle probate cases which an attorney may not otherwise be able to handle, either because of time or competence, he or she may hire an outside attorney to help them prepare the probate pleadings. In a recent case the estate of the deceased brought a personal injury action and a personal representative had to be appointed for the estate. Instead of referring the matter, the personal injury attorney hired an attorney who had worked periodically with other probate attorneys. While the client believed that the personal injury attorney was handling everything, the “outside” attorney was handling the probate, ostensibly under the supervision of the primary attorney. In a hearing related to the personal injury case the primary attorney opined to the judge that the personal representative had been appointed. Unfortunately, because of lack of communication between the primary attorney and the hired attorney, the primary attorney did not know that letters of administration had not been issued to the personal representative. Opposing counsel filed a grievance that the primary attorney had misled the court and therefore violated the rule against candor toward a tribunal. While the issue was legally resolved, the Committee member investigated the relationship between the primary attorney and the subordinate attorney and found that the ethics rule applying to supervising attorneys had been violated.

TRUST ACCOUNT VIOLATIONS

Without a doubt these complaints are the most egregious of the complaints filed with the Committee. Members do NOT tolerate stealing from trust accounts no matter how the attorney attempts to define his or her conduct. It is critical to remember that any money placed in a trust account on behalf of a client is the money of the client and writing a check for the attorney’s personal expense or for another client is stealing their money. A refusal to account for and deliver trust fund money upon demand shall be deemed a conversion. The Florida Supreme Court generally imposes the harshest discipline for conversion and theft of trust funds.

Cases have appeared before the Committee where attorneys basically use the trust account as their own checkbook. The reason one attorney stated was that he or she did not have time or did not want to open another account. Further when a trust account check bounces bankers automatically notify The Florida Bar. Sometimes recognition of trust account violations arise from the investigation of other complaints. For example if a fee is excessive and the Committee looks at the invoice and there is payment from a trust account the member may want to see the trust account records. If an attorney does not have those records then an auditor from The Florida Bar may be notified to perform an audit of the trust accounts.

Be careful of what you are safekeeping. A safe deposit box can be maintained but the attorney must notify the bank that third party funds and assets are held. If you have an item of tangible property, then remember you must account for same.

Every attorney must represent by a mark on The Florida Bar dues statement compliance with the trust accounting rules. If you represent that your trust account is maintained in compliance with the ethics rules and the trust records are not in compliance, then that representation is false and is yet another violation of the ethics rules. Committee members look very closely at trust account violations.

Sometimes attorneys hold money on a short term basis for estates or trusts. While the rules recognize such a procedure the attorney must give a full accounting and if funds are not short term or nominal then the attorney can not receive benefit and interest earned. The determination of whether the holding of money is nominal or short term can be made by the attorney. The attorney must exercise good faith judgment and consider the amount, the time period, the likelihood of delay, the cost to attorney for maintaining interest bearing accounts and the minimum balance requirement. The determination of whether the amount is nominal or short term rests with the sound judgment of the attorney and no lawyer shall be charged with an ethical violation based on a good faith judgment.

In my experience attorneys who have trouble with trust accounts have overextended themselves financially and/or may have gambling, drug or alcohol problems. These problems are mitigating factors if the attorney gets help with Florida Lawyers Assistance program. The abuse problem does not excuse the violation but may affect the outcome of the Committee’s decision. Committee members are very open to attorneys who are getting help. Committee members want to prevent an attorney who has an abuse problem from practicing and harming the public but obtaining help is looked upon favorably by the Committee. Obviously, restitution must be made and the ethics violations still must be dealt with.

PROCEDURE

All complaints must be in writing and signed under oath under penalties of perjury. Any calls and initial complaints are screened in Tallahassee and cases that require further investigation or special handling are forwarded to The Florida Bar branch offices. If The Florida Bar Counsel (“Bar Counsel”) determines, after review of the allegations in the complaint, that no violation of the rules has occurred Bar Counsel can dismiss the complaint. If Bar Counsel determines the conduct should be investigated, the Bar Counsel forwards the complaint to both the grievance committee chairperson and the designated reviewer who is a member of the Board of Governors. The chairperson is responsible for reviewing all complaints and assigning those complaints to the appropriate individuals on the Committee. Complaints are often assigned to attorneys who have handled similar matters or to public members, who can use the help of a Committee member attorney familiar with the particular area. The chairperson determines who can best handle the particular matter.

The chairperson then advises the Bar Counsel to whom the complaint is assigned. Bar Counsel then sends correspondence to the “grieved” attorney to respond to the investigating member within 15 days of receipt of the notice. Either the grieved attorney or her/his attorney must contact the investigating member within the 15 days. Failure to do so can cause another complaint. At this time or earlier if you are aware your client is going to file a grievance, then hire a competent attorney to represent you. Committee members do not look unfavorably on the action of hiring an attorney.

The initial written response to the complaint should be thorough and address the specific issues. One attorney representing a “grieved attorney” drafted a response and referred to rules the Committee members had not even mentioned! Once the investigating member receives the response you can expect a phone call to discuss the matter. The grieved attorney or her/his attorney should make every attempt to be prompt and prepared.

Investigation may be complete with the letter response and the investigating member’s investigation. If the Committee members determine no need for an evidentiary hearing, then the grieved attorney or his or her attorney will be given notice of a summary hearing which will provide the grieved attorney with the Committee members’ names and the rules that may have been violated. No attendance is available and the Committee members must have the hearing with a quorum of 3 members; 2 of which must be lawyers. The Committee members can vote either no probable cause (“NPC”), NPC with letter of advice, minor misconduct, recommendation of diversion or probable cause (“PC”). You or your attorney will be advised in writing of the Committee’s decision.

If the Committee determines that an evidentiary hearing is necessary, then the grieved attorney will be noticed and will appear at the appointed hearing with his attorney. The complainant has a right to be at the hearing. A court reporter records the proceeding and the chairperson runs the hearing. No rules of evidence apply. Generally the investigating member (and sometimes an attorney will help a public member) will take testimony of the attorney and the Committee members also have an opportunity to ask questions.

These hearing are taken very seriously by the Committee members and should also be taken seriously by the “grieved” attorney. While most attorneys are professional, candid and honest I have been amazed at the arrogance and total lack of respect a few grieved attorneys give Committee members. Committee members are there to protect the public and no Committee member is “out” to get an attorney. If a Committee member determines he or she cannot be unbiased, then he or she abstain from voting.

Each Committee member comes from a different walk of life but generally he or she is on the Committee because he or she truly wants to uphold and protect the integrity of the law profession. Being respectful and showing up prepared are ways to have the Committee members see you in the best light.

This may sound obvious but do not lie, not even what you think is a white lie. Also fudging, puffing, speculating should be avoided at all costs. Candor is always the best in front of a Committee. Committee members are very astute and there are always a few litigators who have seen everything. As the hearing is recorded Committee members can always look at what you spoke versus what you wrote in your response. If you do not know or remember say so. Committee members’ findings are all reviewed by a designated reviewer.

Once Committee members vote, then Bar Counsel or the chairperson will notify the grieved attorney or his or her attorney. If the Committee members find NPC, then the complaint is dismissed. If NPC with a letter of advice, minor misconduct or diversion, then those proceedings are available for public view. If there is finding of PC, then the designated reviewer reviews the matter. If he or she confirms, then a complaint is filed by The Florida Bar with The Florida Supreme Court. The clerk of The Florida Supreme Court then forwards the matter to the Chief Judge of a circuit near the “grieved” attorney’s circuit. The Chief Judge then appoints a judge in that circuit to act as referee of the complaint.

Cases that are closed without the imposition of discipline are public record and are purged from The Florida Bar’s record one year after the file is closed. Minor misconduct and PC cases become a part of the permanent discipline record.

CONCLUSION

This article has been written to help attorneys identify certain ethical issues particular to the estate planning, probate and trust practice. Obviously, because of limited space, I can only touch upon my most memorable experiences on the Committee regarding the probate and estate planning practice. Hopefully these experiences can benefit attorneys practicing in these areas.

Most attorneys, especially those reading this article, are professional and have the utmost integrity. Unfortunately a few attorneys give our profession a bad name. I strongly recommend that attorneys practicing in these areas volunteer to participate on a Committee. Participation helps The Florida Bar continue its excellence, the attorney learns the ethics rules and the application to “real life” situations, and participation on the Committee helps you become a better attorney and counselor to your clients. If you are interested in volunteering to participate on a Committee or if you know of potential public members, then contact your representative on the Board of Governors in your circuit.

I also suggest that attorneys practicing in these areas become active in The Florida Bar Real Property Probate and Trust Law (“RPPTL”) section (www. rpptl. org). In Committee meetings you will interact with top attorneys across the state, learn about and draft proposed legislation, find a great network of friends and obtain advice about issues that arise in practice. Substantive Committees in the RPPTL section include IRA and Employee Benefits, Estate and Trust Tax, Probate Law and Procedure, Insurance, Asset Preservation, Probate and Trust Litigation, Trust Law, Professionalism and Ethics, Wills, Trust and Estates Certification, Advance Directives and HIPAA, Charitable Organizations and Planning, Guardianship Law and Procedure and Power of Attorney. Committee chairs are always looking for active members.