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Practice Professional Will BY TRACI M. SMITH Traci M. Smith is an estate plan- ning attorney for the law firm of Morris, Hall & Kinghorn, P.L.L.C. She graduated cum laude from Millsaps College and earned her Juris Doctor from the University of Arizona. She is a member of the American Academy of Estate Planning Attorneys and a noted speaker on the topics of estate planning and asset protec- tion. She can be reached at [email protected]. Deathof a Estate Planning With the Practice Professional Will As citizens in a culture that worships youth, most of us find it nearly impossible to admit our own mortality. Even fewer of us make plans for that eventuality. The same is true of attorneys. We spend much of our time advocating for our clients. Often, we are so consumed with our work and our daily activities that we frequently fail to plan for vaca- tions, much less develop an estate plan, one that prepares for incapacity and death. That is a crucial mistake. Fortunately, it is a reversible error. 36 ARIZONA ATTORNEY JUNE 2007 What’s The Harm? If a plan has not been established in the lawyers owe an affirmative duty to protect For the survivors of a deceased person, the case of incapacity or death, the State Bar of their clients’ interests.10 hours and days following a loved one’s Arizona is available as a resource to attor- What should that plan include? death is no time for important decisions. neys. In certain cases, the State Bar may be The State Bar and the American Bar This phenomenon is not unique to attor- named as a conservator under Rules 66 Association suggest that, at minimum, such neys. In fact, the majority of American through 69 of the Arizona Rules of the a plan should, include the designation of adults have no plan in place that protects Supreme Court. another attorney (“Assisting Attorney”) to them, or their businesses, in the event of Under these provisions, however, this notify clients, review client files, and protect either incapacity or death, and it is often the role is limited to notifying clients, returning client funds.11 Other state bar associations family that is left to sort out the details.1 files and taking possession of the client trust have taken a similar view.12 Denial offers us and our clients no pro- accounts.6 There is no requirement for According to ER 1.1, competence tection from the inevitable. It is critically them to direct clients to another attorney in includes “preparation reasonably necessary important that attorneys include special the case of ongoing representation. This for the representation,” which, when read in provisions for their law practice in an estate could gravely affect the incapacitated or conjunction with ER 1.3, would indicate plan. We have far more to gain than to lose deceased practitioner’s clients, especially in that each attorney should diligently prepare by sitting down in advance to plan for every such important client matters as court dates, for each client’s representation. Although contingency life may throw at us. Moreover, statutes of limitations or document filings. representation would necessarily be termi- our special relationship with our clients To prevent neglect of client matters, the nated in the event of the attorney’s incapac- requires us to be much more aware of the attorney’s duty of diligence may require ity or death, the lawyer’s fiduciary obliga- consequences to them if their attorney that each attorney prepare a plan that desig- tions of loyalty and confidentiality continue should become incapacitated or pass away. nates another competent lawyer to review beyond the termination of the agency rela- In any law practice the incapacity or the files, notify the clients and determine if tionship.13 An attorney would then have a death of an attorney is problematic, but this there is a need for immediate protective duty to ensure that his or her clients are is a particularly precarious situation for the action.7 Moreover, ER 1.15 requires attor- informed in the event of the law practice’s personal representative or power of attorney neys to safeguard property and promptly dissolution.14 An incapacitated or deceased agent for an attorney. The individual is not deliver client funds. In that regard, the attorney is understandably powerless to only required to settle the normal affairs of client trust accounts present an enormous inform clients of the change in circumstance. the estate, but must also resolve any out- area of concern. In fact, this rule holds each standing issues for the attorney’s practice. practicing attorney accountable for the Liability The interests of the clients must always be client trust accounts, and there have been Failure to prepare a future plan to protect protected, and a lawyer’s incapacity or death numerous ethics violations due to mishan- client files and property in the event of the does not relieve the attorney of responsibil- dling of these accounts.8 lawyer’s incapacity or death could bring ity in this area. In the larger firms, there are other attor- about those dreaded words that no attorney neys who can represent the client, if the wants to hear—sanctions and malpractice. The Attorney’s Duties client so chooses, and many of these prob- Some jurisdictions have found lawyers to Just what, then, is expected of an attorney? lems are easily addressed. In the small firm have violated the duty to act competently The State Bar Ethics Committee has or solo practitioner setting, the resolution of when the attorneys have neglected client clearly recognized the need for a contin- the problem of incapacity or death requires matters by reason of ill health, retirement or gency plan to address problems encoun- a more detailed professional will. When an personal problems.15 The same problems are tered by a disabled or deceased attorney.2 attorney devises a professional will, a presented by the attorney’s incapacity or The State Bar currently regulates 19,528 Pandora’s box of ethical issues is opened, death. Thus, an attorney without a contin- attorneys.3 Of those, 459 either went on including problems with confidentiality, gency plan for clients’ files might be guilty inactive status or passed away in 2006.4 This protection of the client trust account and of neglect. number stands to increase in coming years, possible conflicts of interest.9 This article is Such a result is consistent with two of and the need for a contingency plan will designed to address those issues, to high- the three justifications for lawyer disci- become even more apparent. light the potential liability for any attorney pline16: The committee asserts that a prudent who fails to develop a proper estate plan, • Sanctioning lawyers who inadequately attorney should establish a contingency plan and to make recommendations as to what a prepare to protect their clients’ interests or “professional will” to ensure that the professional will should contain. in the event of incapacity or death clients and client trust accounts are safe- would dissuade other attorneys from guarded. Such a will is an estate plan for an Sanctions for Failing To Plan committing similar offenses and help to attorney that includes provisions for inca- To a client, an attorney is someone who restore public confidence in the bar. pacity or death, including how clients’ inter- does far more than simply “practice law.” • Although there is no specifically applica- ests will be protected and how the law prac- She is a counselor or trusted advisor to the ble requirement under the Rules of tice will be maintained or dissolved. The client. Certainly, the attorney plays a critical Professional Responsibility, it is fairly development of some type of contingency role in the client’s life during ongoing rep- inferred from the aforementioned rules plan is consistent with ER 1.1 and ER 1.3, resentation. Imagine the devastation a client that attorneys should be proactive in which require an attorney to be both com- would feel in the event of that attorney’s making arrangements or their clients’ petent and diligent in representing clients.5 incapacity or death. Given that relationship, files in the event of incapacity or death. www.myazbar.org JUNE 2007 ARIZONA ATTORNEY 37 The Professional Will The only Ethics Opinion issued on this and the other attorneys in the event of an the attorney’s interest. Business partners matter in Arizona supports this asser- attorney’s incapacity or death. This internal generally do not want to be in business with tion.17 arrangement should be manifested in the anyone outside the business; in fact, when • Moreover, malpractice insurance carriers form of a shareholder’s agreement in the that business is a law practice, no one other often require that attorneys have con- case of an owner (partner) or, in the case of than an attorney may be partner to it.19 If an tingencies in place. For some time, an associate attorney, in the form of a con- attorney becomes disabled or dies, and the those carriers have required that solo tract for employment. family becomes the owner of the law prac- practitioners have some other attorney Two fundamental aspects are addressed tice, several steps must be taken to maintain be available in cases of disability or vaca- in these agreements. An agreement will pro- or dissolve the law practice. In these cases, tion. vide a well-defined set of rules governing the the law practice must be sold to licensed Thus, implementing a plan is both good relationship of the business owners—in this individuals, and a plan for that sale should business and ethically advisable.
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