Oregon State Bar Bulletin — AUGUST/SEPTEMBER 2006
Bar Counsel
Matters of Estate: Ethical considerations for probate practitioners
By Scott Morrill

Representing a personal representative in a probate matter can present its own set of ethical considerations. Many representatives rely on the lawyer to advise them at every step in the process, from how to initiate a probate to how to secure and dispose of the deceased person’s home and personal property. This article will explore some of those considerations and provide some insight into the sorts of questions and complaints the bar receives about lawyers who represent personal representatives.

Oregon RPC 1.4 requires a lawyer to keep a client reasonably informed about the status of a matter and to promptly comply with reasonable requests for communication. It also requires a lawyer to explain a matter well enough for the client to make informed decisions.1

Clearly, you must communicate with your client the personal representative and help him or her understand the probate process. As many representatives are relatives or close friends of the deceased person, your job may also involve some hand holding for a distraught client. However, what is your obligation to communicate with all the other people interested in the estate?

The lawyer and the representative may agree between themselves that the lawyer may disclose to the beneficiaries any action or inaction relating to the probate and to respond to inquiries. Whether or not the lawyer and client enter into such an agreement, the lawyer for the representative ordinarily owes some duties to the beneficiaries of the estate. The representative’s retention of a lawyer to generally advise him or her about legal matters regarding the administration of the estate may impliedly authorize the lawyer to make disclosures in order to protect the interests of the beneficiaries.2

A lawyer engaged by a personal representative to represent the representative may communicate directly with the beneficiaries regarding the nature of the relationship between the lawyer and the beneficiaries. The representative is primarily responsible for communicating with the beneficiaries regarding the estate. A meeting between the representative, the lawyer and the beneficiaries may provide all parties with the best understanding of the proceedings and lead to the most efficient administration. However, any communication by the lawyer with non clients is still governed by Oregon RPC 4.1 (Truthfulness in Statements to Others) and 4.3 (Dealing with Unrepresented Person). That is, the lawyer’s communications must be honest and must not mislead the non-client about the lawyer’s role.

As a general rule, the lawyer for the representative should inform the beneficiaries that the lawyer has been retained (by the personal representative) regarding the estate and that the representative is the lawyer’s client; that while the representative and the lawyer will, from time-to-time, provide information to the beneficiaries regarding the estate, the lawyer does not represent them; and that the beneficiaries may wish to retain independent counsel to represent their interests. As indicated in Oregon RPC 2.3 (Evaluation for Use by Third Persons), the lawyer may, at the request of a client, evaluate a matter affecting a client for the use of others. See www.actec.org/pubInfoArk/comm/toc.html.

The complaint most often heard by the bar’s Client Assistance Office is from non-client beneficiaries that the lawyer for the estate will not communicate with them. We often advise these non-clients that they need to request information from the personal representative or consult with their own lawyer. However, their frustration is evident. If the lawyer for the representative either got consent from the client in advance about answering beneficiaries’ questions, or if the lawyer, representative and beneficiaries met often, the process would likely run more smoothly. It would also likely cut down on the number of complaints made about lawyers engaged in probate practice.

Oregon RPC 1.5 governs lawyer fees generally.3 Fees for legal services in estate matters may be established in a variety of ways, provided that the fee ultimately charged is a reasonable one taking into account the factors described in Oregon RPC 1.5(b).4 Fees in such matters frequently are primarily based on the hourly rates charged by the attorneys and legal assistants rendering the legal services or upon a mutually agreed upon fee determined in advance. In all cases the lawyer should advise the client of the basis upon which the legal fees will be charged and obtain the client’s informed consent to the fee arrangement. The lawyer should also inform the client in advance of the extent to which the client will be charged for other items, including duplicating expenses, and the time of secretarial or clerical personnel. Basing a fee for legal services solely on any single factor set forth in Oregon RPC 1.5 is generally inappropriate unless required or allowed by law.

The concern the bar’s Client Assistance Office hears often from PR’s and beneficiaries is that the lawyer’s fees are depleting the estate. If litigation is ongoing, this may very well be true. However, our answer to these concerns is that the lawyer for the personal representative may not have complete control over what other interested parties are doing. That is, if a creditor of the estate sues or if someone challenges the will, the lawyer for the representative may have to defend against the claims. Again, as the bar cannot give legal advice to these people, we generally recommend that they consult with a lawyer. However, you should remember your obligations under Oregon RPC 3.1 to not bring or defend a proceeding unless there is a basis for doing so that is not frivolous.5

Most states allow a lawyer who serves as a fiduciary and as the lawyer for the fiduciary to be compensated for work done in both capacities. Oregon is one of these states. However, it is inappropriate for the lawyer to receive double compensation for the same work. It is also inappropriate for the lawyer to bill the same rate for mundane fiduciary duties such as mowing the deceased person’s lawn as for legal work performed. Your conduct is also likely to be scrutinized more closely if you are serving in a dual capacity, and you may be safer choosing one role or the other — and billing for only one.

A lawyer may accept a retainer in advance or partial payments from the personal representative. ORS 116.183 provides that a personal representative

shall be allowed in the settlement of the final account all necessary expenses incurred in the care, management and settlement of the estate, including reasonable fees of appraisers, attorneys and other qualified persons employed by the personal representative. A partial award of such expenses, including fees, may be allowed prior to settlement of the final account upon petition, showing that the final account reasonably cannot be filed at that time, and upon notice as directed by the court. An award of reasonable attorney fees under this section shall be made after consideration of the customary fees in the community for similar services, the time spent by counsel, counsel’s experience in such matters, the skill displayed by counsel, the excellence of the result obtained, any agreement as to fees which may exist between the personal representative and the counsel of the personal representative, the amount of responsibility assumed by counsel considering the total value of the estate, and such other factors as may be relevant. No single factor shall be controlling.

However, a lawyer who takes an attorney fee from the estate without first obtaining court approval violates Oregon RPC 1.5(a) by collecting an illegal fee. In re Alstatt, 321 Or 324, 333, 897 P2d 1164 (1995). The collection of any such fee without prior approval is illegal because is violates a statute. See In re Hockett, 303 Or 150, 162, 734 P2d 877 (1987). The safer course is for the lawyer to wait to get paid when the estate closes and with approval of the lawyer’s fees by the court. For additional discussion on this issue, see Oregon Formal Ethics Opinions 2005-63 and 2005-171.

Someone other than your personal representative client — for instance, an employer, insurer, relative or friend — may pay the cost of providing legal services to another person. Notwithstanding the source of payment of the fee, the person for whom the services are performed is still your client. You must continue to maintain your client’s confidences and follow his or her directions. Under Oregon RPC 1.8(f) (Conflict of Interest: Specific Rules) the lawyer may accept compensation from a person other than a client only if the client consents after consultation, there is no interference with the lawyer’s independence of judgment or with the lawyer-client relationship, and the client’s confidences are maintained. See www.actec.org/ pubInfoArk/comm/toc.html.

A common theme in our bar counsel columns is for lawyers to maintain good communication with clients. In probate, you may have to expand your list to include beneficiaries, especially if the representative agrees. Getting paid is always a concern. Getting paid for your duties as either just the representative or the lawyer is the safest course of action. Getting your fees approved by the court before getting paid is more than just good sense; it is required if you are taking your fee out of the assets of the estate.

1. Rule 1.4 Communication

(a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information

(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

2. Rule 1.2 Scope of Representation and allocation of authority between client and lawyer

(a) Subject to paragraphs (b) and (c), a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client’s decision whether to settle a matter. In a criminal case, the lawyer shall abide by the client’s decision, after consultation with the lawyer, as to a plea to be entered, whether to waive jury trial and whether the client will testify.

3. Rule 1.5 Fees

a) A lawyer shall not enter into an agreement for, charge or collect an illegal or clearly excessive fee or a clearly excessive amount for expenses.

4. Rule 1.5 Fees

1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

3) the fee customarily charged in the locality for similar legal services;

4) the amount involved and the results obtained;

5) the time limitations imposed by the client or by the circumstances;

6) the nature and length of the professional relationship with the client;

7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

8) whether the fee is fixed or contingent.

5. Rule 3.1 Meritorious Claims and Contentions

A lawyer shall not knowingly bring or defend a proceeding, assert a position therein, delay a trial or take other action on behalf of a client, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law, except that a lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration may, nevertheless so defend the proceeding as to require that every element of the case be established.

© 2006 Scott Morrill

Scott Morrill is assistant general counsel for the Oregon State Bar. He can be reached at smorrill@osbar.org.

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