Ethics in Estate Planning: Key Issues Checklist

This checklist presents the key ethics rules estate planning counsel should consider when meeting, consulting with, and planning for clients.

This checklist is based on the ABA Model Rules of Professional Conduct and also includes information on the sources of ethics rules in individual states and the key ethics rules affecting estate planning counsel, including rules regarding attorney competence, client capacity to plan, managing the attorney-client relationship, attorney’s fees, preserving client confidences, handling joint representations and conflicts of interest, non-clients paying attorney fees, and attorney as beneficiary or fiduciary.

Key Ethics Resources for Trusts and Estates Counsel

• The ABA Model Rules of Professional Conduct (the Model Rules), created in their modern form in 1983 by the American Bar Association. The Model Rules have been adopted to some extent in all 50 states and the District of Columbia. However, counsel should always consult the rules in the state of practice since some state rules may vary from the Model Rules.
• State-specific ethics rules, which establish the foundation of attorneys’ obligations, vary by state and are typically found in:
  • state statutes;
  • bar association regulations; and
  • other bar association resources.

Key Ethics Rules that Apply to Trusts and Estates Counsel

Attorney Competence in Estate Planning Matters

• Relevant factors in determining an attorney’s competence for a specific matter include:
  • the relative complexity and specialized nature of the matter;
  • the attorney’s general experience;
  • the attorney’s training and experience in estate planning;
  • the preparation and study the attorney can give the matter; and
  • whether it is feasible to refer the matter to, or associate or consult with, an attorney of established competence in estate planning, if the attorney lacks the required competence.
• In many instances, the required proficiency is that of a general practitioner.
• Some circumstances may require expertise.
• Providing competent estate planning representation does not necessarily require previous experience or special training in estate planning. Inexperienced estate planners or attorneys presented with unfamiliar legal matters may provide competent representation by:
  • undertaking additional study of relevant topics; and
  • consulting or associating with other, more experienced colleagues.

(ABA Model Rule 1.1 and cmt. Legal Knowledge and Skill.)

• Attorneys must stay current on new legal developments. This includes engaging in continuing study and education and complying with all continuing legal education requirements, including those regarding the use of technology if applicable. (ABA Model Rule 1.1, cmt. Maintaining Competence.)
• To competently use a generative AI tool in client representation attorneys:
  • must have a reasonable understanding of the capabilities and limitations of the generative AI tool the attorney is using;
  • must be aware of and recognize risks associated with the use of generative AI; and
  • should independently verify generative AI output to ensure the accuracy of the information.

(ABA Formal Opinion 512 (July 29, 2024).)

Client’s Mental Capacity to Plan

• Estate planning clients must be mentally capable of participating in the estate planning process and executing the required legal documents.
• The standard for capacity generally varies from state to state and may depend on the different types of documents being executed. Counsel must determine that the client has the capacity to execute:
  • each different type of document that the client is signing at a given time; and
  • a particular document at the time it is being signed, if the client’s estate planning documents are signed at different times.
• If counsel have concerns about a client’s competence, they should evaluate and clearly document the client’s capacity in the client’s file.
• If counsel are concerned or suspicious about the client’s mental status or condition, it may be appropriate for counsel to consult with a physician, psychologist, or other mental health care professional. This should be a last resort and counsel should obtain the client’s authorization before acting. (ABA Model Rule 1.14, cmt. Disclosure of Client’s Condition.)

Managing the Attorney-Client Relationship

• An attorney-client relationship may form at an initial meeting, regardless of whether the client hires the attorney (ABA Model Rule 1.18).
• To properly manage the attorney-client relationship, counsel should:
  • identify the client and the scope of the representation to avoid conflicts of interest (ABA Model Rule 1.2);
  • use engagement letters to set out the relationship and to clearly communicate the basis or rate of the fees and costs for the representation (ABA Model Rule 1.5);
  • ensure the client is informed about the representation on an ongoing basis and makes informed decisions about the estate plan, including on the use of generative AI as part of the client representation, if applicable (ABA Model Rule 1.4 and ABA Formal Opinion 512 (July 29, 2024));
  • obtain the proper consents, preferably in writing (whether a written consent is required under state law or not), when non-clients are involved in the estate planning (ABA Model Rule 1.6);
  • properly and completely end the representation (ABA Model Rule 1.16); and
  • properly maintain all client files (ABA Model Rule 1.16(d)).

Attorney’s Fees

• Fees and expenses charged to a client must be reasonable (ABA Model Rule 1.5(a)).
• Factors to consider in determining the reasonableness of a fee include:
  • the time and labor required, the difficulty of the issues involved, and the skill necessary to properly perform the legal service;
  • the likelihood that accepting the client will preclude other employment by the attorney;
  • the fee customarily charged in the locality for similar services;
  • the amount involved and the results obtained;
  • the time limits imposed by the client or by the circumstances;
  • the nature and length of the attorney’s professional relationship with the client;
  • the experience, reputation, and ability of the attorney or attorneys performing the legal work; and
  • whether the fee is fixed or contingent.

(ABA Model Rule 1.5(a).)

• Attorneys using generative AI in a client representation:
  • may only charge for the time actually spent, even if the use of AI makes their work more efficient, therefore taking less time;
  • may need to reevaluate flat fee arrangements if using a generative AI tool allows the attorney to complete tasks much more quickly;
  • may not charge a client for time the attorney spends learning how to use a generative AI tool.

(ABA Formal Opinion 512 (July 29, 2024).)

• The scope of the representation and the basis or rate of the fee and expenses charged to the client must be communicated to the client before or within a reasonable time after commencing the representation, except when the attorney will charge a regularly represented client on the same basis or rate (ABA Model Rule 1.5(b)).
• Any changes in the basis or rate of the fee or expenses charged to the client must be communicated to the client (ABA Model Rule 1.5(b)).
• Attorneys who are not in the same firm may divide a single fee if:
  • the division is in proportion to the services performed by each attorney or each attorney assumes joint responsibility for the representation;
  • the client agrees in writing to the division of fees; and
  • the total fee is reasonable.

(ABA Model Rule 1.5(e).)

• If the client pays a retainer fee, the attorney must keep the client’s funds in a trust account held separately from the attorney’s business and personal property (ABA Model Rule 1.15(a)). The trust account must typically be either:
  • an interest-bearing account, if the amount the attorney holds for the client is large, where the attorney passes the interest back to the client; or
  • an Interest on Lawyers’ Trust Account (IOLTA), if the amount the attorney holds for the client is small. An IOLTA is an interest-bearing checking account, and the nominal interest earned by each IOLTA in a given state is pooled together and used for a variety of charitable causes (for example, see Massachusetts IOLTA). All 50 states, the District of Columbia, and the U.S. Virgin Islands have an IOLTA program. The program is mandatory in 44 jurisdictions, voluntary in two jurisdictions, and six jurisdictions have an opt-out program (see IOLTA Overview).

Preserving Client Confidences

• All information the attorney receives from and about the client is confidential, including the representation’s existence. The general rule is that the attorney must always obtain informed consent from the client before discussing confidential information. (ABA Model Rule 1.6.)
• Information the attorney obtains at the initial meeting is confidential even if the client does not retain the attorney’s services (ABA Model Rule 1.18(b)).
• The confidentiality rules apply to all information relating to the representation, whatever its source (ABA Model Rule 1.6, cmt.).
• During routine representation, an attorney is impliedly authorized to make disclosures about a client when appropriate in the representation except when the client instructs otherwise or special circumstances limit that authority (ABA Model Rule 1.6, cmt. Authorized Disclosure).
• An attorney may reveal confidential information to the extent the attorney believes it is reasonably necessary to:
  • prevent reasonably certain death or substantial bodily harm;
  • prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the attorney’s services;
  • prevent, mitigate, or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the attorney’s services;
  • secure legal advice about the attorney’s compliance with the ethics rules;
  • establish a claim or defense for the attorney in a controversy between the attorney and the client;
  • establish a defense to a criminal charge or civil claim against the attorney based on the client’s conduct;
  • respond to allegations in a proceeding concerning the attorney’s representation of the client;
  • comply with other law or a court order; or
  • deal with potential conflicts of interest based on an attorney changing firms or a change in composition of a firm, unless the information would compromise the attorney-client privilege or otherwise prejudice the client.

(ABA Model Rule 1.6(b).)

• The attorney must reveal no more information than is necessary to meet the requirements or accomplish the purposes of a permissible or mandatory disclosure (ABA Model Rule 1.6).
• Attorneys using a generative AI tool in client representation must be cautious when inputting client information into the generative AI tool, which includes evaluating the risks that the information would be disclosed to or accessed by others:
  • outside the firm; or
  • inside the firm (if, in the case of information disclosed to people inside the firm the individuals will not adequately protect the information).

(ABA Formal Opinion 512 (July 29, 2024).)

• Attorneys using a self-learning generative AI tool should be extra cautious due to the risk that one client’s information could be improperly disclosed when using the tool for a different client, even by attorneys in the same firm. Because of this risk, attorneys using self-learning generative AI tools should get a client’s informed consent before inputting the client’s information into the self-learning tool. (ABA Formal Opinion 512 (July 29, 2024).)

Conflicts of Interest in Joint Representation

• Attorneys generally must not represent clients whose interests are adverse to each other or to the attorney’s other current or former clients (ABA Model Rules 1.7 and 1.9).
• Before agreeing to undertake joint estate planning representation, an attorney must consider whether there is a potential conflict of interest with a current or former client (ABA Model Rules 1.7 and 1.9).
• If there is a conflict of interest or a potential conflict of interest, an attorney may still be able to represent both clients if:
  • the attorney reasonably believes the attorney can competently and diligently represent each client;
  • the representation is not prohibited by law;
  • the representation does not involve a claim by one client against another client represented by the attorney in the same litigation or other proceeding before a tribunal; and
  • each client gives informed consent in writing.

(ABA Model Rule 1.7(b).)

• Informed consent is an agreement by a person to a proposed course of conduct after the attorney communicates adequate information and explanation about the material risks and reasonably available alternatives to the proposed course of conduct (ABA Model Rule 1.0(e)).
• An attorney may include a conflict waiver provision in an engagement agreement or as a separate consent document for each client to sign (ABA Model Rule 1.7, cmt. Consent to Future Conflict).

Non-Client Paying Attorney Fees

• An attorney may accept payment from a non-client for services rendered to a client if:
  • the client gives informed consent to the arrangement;
  • the arrangement does not interfere with the attorney’s independent professional judgment on the client’s behalf, or with the attorney-client relationship; and
  • the client’s confidential information is protected.

(ABA Model Rules 1.8(f) and 1.7, cmt. Interest of Person Paying for a Lawyer’s Service.)

Attorney as Beneficiary

• An attorney should never solicit a gift from a client or ask to be included in a client’s estate plan. These actions violate the Model Rules and many state statutes and subject the attorney to discipline and the instrument to challenge. (ABA Model Rule 1.8(c).)
• An attorney cannot prepare an estate plan for a client that includes a gift to:
  • the attorney, unless the attorney is related to the client; or
  • the attorney’s relatives, unless they are closely related to the client.

(ABA Model Rule 1.8(c).)

• State law differs on whether a gift to an attorney in a written instrument is permitted. In some states:
  • any part of a written instrument that makes a gift to an attorney or a person related to the attorney is void if the attorney prepared the written instrument, supervised the written instrument’s execution, or solicited the gift, unless the attorney or other recipient of the gift is related to the person making the gift (for example, § 732.806(1), Fla. Stat.);
  • gifts to an attorney are presumed invalid and the burden is on the attorney to prove validity (for example, Cal. Prob. Code §§ 21380 to 21392, Matter of Putnam, 257 N.Y. 140 (1931), and Sandford v. Metcalfe, 954 A.2d 188, 191-93 (2008)); and
  • gifts to an attorney are permitted, subject to certain exceptions (for example, In re Estate of Pedrick, 482 A.2d 215, 220 (Pa. 1984) and Estate of Younger, 508 A.2d 327, 328-29 (Pa. Super. Ct. 1986)).
• Attorneys may prepare routine estate plans for family members that include the attorney as a beneficiary (ABA Model Rule 1.8(c)).
• Attorneys are not prohibited from:
  • accepting gifts from clients if the transaction meets general standards of fairness and the attorney does not prepare the instrument bestowing the gift; or
  • receiving token gifts from clients.

(ABA Model Rule 1.8, cmt. Gifts to Lawyers.)

Attorney as Fiduciary

• Naming the attorney who prepares an estate plan as the fiduciary (referred to as the executor or personal representative, depending on state law) of the estate or as trustee of a trust created under the plan is permissible if certain conditions are met (ABA Model Rule 1.8, cmt. Gifts to Lawyers).
• If an attorney prepares a document that appoints the attorney or a person related to the attorney as a fiduciary, the Model Rules commentary requires that:
  • the appointment not violate Rule 1.7 regarding material limitation conflicts (ABA Model Rule 1.7); and
  • the client gives informed consent, in writing.

(ABA Model Rule 1.8, cmt. Gifts to Lawyers.)