UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 91-07
An attorney is directed by his client to prepare the client's will naming the attorney as Personal Representative and as Testamentary Trustee of the Trust(s) created under the will. The attorney is willing to so serve.
Questions:
(1) Is it ethical for the attorney to acquiesce in this direction thereby preparing the client's will and naming himself as Personal Representative and Trustee?
(2) Is it ethical for the attorney to take a Personal Representative's commission and a Trustee's fee under these circumstances?
(3) Is it ethical for the attorney to render legal services to the Estate and receive, in addition to the Personal Representative's commission and Trustee's commission, compensation (legal fees) for such legal services?
Summary:
(1) It is ethical for an attorney at the direction of a client to prepare the client's will and name himself as Personal Representative and Trustee except under the circumstances proscribed under Rule 1.8(c).
(2) It is ethical for an attorney to take a Personal Representative's commission and Trustee's fee under these circumstances?
(3) It is not per se unethical for the attorney to render legal services to the Estate and receive, in addition to the Personal Representative's commission and Trustee's commission, compensation in the form of legal fees for such services.
Opinion:
Rule 1.8 (c) provides A lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as a parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee.
This Rule is the only prohibition in the Rules of Professional Conduct that would preclude an attorney from drafting a will or trust agreement at the request of a client. Therefore, except under these circumstances, it is not unethical for an attorney to prepare such documents at the request of a client. The question of whether or not an attorney may take a Personal Representative's commission and Trustee's commission under these circumstances is a matter of substantive law. An attorney would be entitled to take a Trustee's commission and a Personal Representative's commission under the same circumstances that a non-- attorney would be entitled to take such a double commission.
(See SC Bar Advisory Opinion No. 90-21). If the method of determining commissions is set forth in the will and/or trust agreement, the method should be one that is reasonable and customary for all Personal Representatives and Trustees so as not to be construed as a "gift" thereby rendering the conduct of an attorney violative of Rule 1.8 (c).
There is no prohibition in the Rules of Professional Conduct against an attorney who serves as a Personal Representative and Trustee of an Estate to also serve as attorney for the same Estate and to charge and to collect reasonable legal fees for such services. In determining what a reasonable fee would be, the attorney should consider, inter alia, if any portion of the legal services duplicate or overlap services being performed in any other capacity. Service in such dual capacities should be fully disclosed to the Probate Court and any other court where an action is pending involving the Estate; and such disclosure also should be made to all beneficiaries and other parties having an interest in the Estate (e.g. bondsmen). See In re Richard W. James, 229 S.E. 2d 594 (1976). While there is not a per se violation of the Rules of Professional Conduct in undertaking to render legal services under these circumstances, the potential for conflicts under Rule 1.7 is clear. If the attorney is aware of any facts or circumstances that would render it reasonably foreseeable that such a conflict is likely to arise, the attorney should decline representation from the outset.