Volume 19, Number 5
Joint Representation of Spouses
By Teresa M. Beasley
Estate planning is almost by definition susceptible to conflict, bringing together emotions associated with both money and mortality. One of the potentially most volatile areas involves cases where a lawyer represents joint parties. This article focuses on the most common type of joint representation: married couples.
The American Bar Association's Model Rules of Professional Conduct (Rules) address some of the problems likely to be encountered in estate planning preparation. Most states' current ethical rules correspond with the Rules, which are the basis for this article; however, it's always a good idea to check specifics.
A Not Uncommon Scenario
Mary Jones calls and asks to meet with you to do estate planning for her and her spouse, Marty, who were referred by a colleague of yours and whom you have not previously met. You set up an appointment. The initial interview is a typical fact-gathering meeting, and nothing out of the ordinary comes to light. The Joneses' simple estate plan will include reciprocal wills, leaving everything to each other and, upon the death of the surviving spouse, leaving everything to their children in trust. Near the end of the interview, you discuss the timeline for delivery of the documents, the fees, and your retainer, for which Mary promptly writes a check.
Later that week, Marty calls and says he would like to discuss one additional thing with you-but he doesn't want you to share this new information with his wife. What are your options? Must you inform her of everything he discloses? If he requests changes to the documents (for example, an additional beneficiary), are you required to make the changes? Do you have a duty to disclose his confidences and secrets to her? If you fail to disclose this information, can you continue to represent both of them?
To assess potentially conflicting interests in a case like the Joneses', an estate planning attorney should consider client loyalty, adversity of interest, and confidentiality. The lawyer-client relationship begins when a potential client acknowledges a lawyer's professional capacity to act for the client's benefit and the attorney agrees to do so. Establishing a lawyer-client relationship for estate planning matters usually is simple: Gather facts, learn the clients' wishes, agree to help them. After your first interview with Mary and Marty Jones and your acceptance of their retainer, it is clear that you represent them.
Rule 1.7(a) provides that "an attorney shall not represent a client if the representation will be directly adverse to another client." Rule 1.7(b) provides that "a lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client." Joint representation of spouses by an attorney might be directly adverse when their estate planning objectives do not coincide. Spouses' estate planning objectives most frequently diverge when the following issues add to the mix: previous marriages, separate children, substantially disparate estates, different planning objectives, and so on.
In the case of the Joneses, no evidence of direct adversity or existing differences arose during your initial interview with them. According to the savings clause in Rule 1.7, an attorney is prohibited from joint representation unless (1) the attorney believes the representation of both parties would not adversely affect the relationship with each spouse; and (2) both spouses consent to the joint representation. If consent is given, the lawyer may represent both parties so long as nothing indicates a potential conflict. In this case, there were no obvious factors of concern, i.e., no previous marriages, no children outside of the marriage, the marriage appeared stable, and the testamentary goals were the same. If these factors change, however, the advisability of joint representation becomes less and less clear.
One key to protecting yourself when representing married couples is ensuring that each client clearly consents to the joint representation after consultation ("informed consent"). Informed consent is imperative for joint representation in estate planning and always should be confirmed in writing. Using conflict waiver letters is the most practical way to guarantee consent from clients who will be represented jointly. The lawyer can set forth the objectives of the representation; identify potential conflicts and risks, including the attorney's duty of loyalty and confidentiality to both parties; and recommend available alternatives should such conflicts arise (typically, separate counsel). The clients' signatures trigger the waiver.
The conflict waiver agreement allows the lawyer to cover potential conflicts from the start-even for confidential information from one spouse that could affect the estate plan months or years later. The following sample language is easily inserted into a conflict waiver letter:
"We have a duty to inform you that a husband and wife may have conflicting interests when estate planning is being considered. This is more often true in the situation of a second marriage with children from previous marriages but may even affect a first marriage that is stable and of long standing. If, as you have requested, we are to act as attorneys for both of you, we will balance all factors and provide each of you with fair and impartial advice.
"We will obtain confidential information from each of you, including information that you may not have fully shared with each other. In our role as advisors in the planning of your estate, we cannot keep that information confidential from either of you. Both of you will be fully informed and advised on all matters.
"Your decision about joint representation and estate planning matters should be made only after you have been fully informed by us as to the potential for these conflicts. Either of you may choose to have your own legal counsel for any part, or for all, of the matters involved.
"If you wish to proceed to engage this firm to provide both of you, jointly, with estate planning assistance, please sign this letter and return a copy to us."
The conflict waiver letter neatly avoids the dilemma presented by Marty Jones's call asking you to keep certain information from his wife. You are not put in the position of having to explain to him that the information cannot be held in confidence because (1) it affects the estate plan, and (2) Mary Jones remains your client for purposes of the estate plan. If he still chooses not to disclose the information to her, you would face a choice between proceeding without his disclosure of the information or withdrawing from the representation altogether and suggesting that each party obtain separate counsel for the estate planning. (This, of course, would make Mary Jones wonder what triggered your withdrawal.)
A conflict waiver letter executed by both spouses would clearly establish the scope of the legal relationship from the outset and possibly avoid the disclosure of conflicting information later down the road. Failing this, it might at least provide you with some legal protection should the situation get ugly.
A Simple Solution
The many questions triggered by Marty's clandestine phone call and request, therefore, can be covered with a simple response:
"Mr. Jones, you should refer to the conflict waiver letter you and your wife signed. I have a duty to share with Mrs. Jones any information shared with me that could have an impact on your estate planning. Now, is there anything you would like to discuss?"
Lawyers commonly send engagement letters outlining the scope of representation and the fee arrangement; conflict waiver letters should be just as common. Making full and clear disclosure at the outset of proposed joint representation may cushion your chances of conflict, but signed waivers will best ensure you do not suffer unnecessarily.
Teresa M. Beasley is a lawyer at Walter & Haverfield LLP in Cleveland, Ohio, with a focus in commercial real estate, estate planning, and intellectual property.