Hi, my name is John T. Anderson. Welcome to my blog! I have been practicing law in California since 1975 and have been the Chairman of the Estate Planning and Probate Section of the Long Beach Bar Association since the mid-1980s. I'm also certified by the State Bar of California Board of Legal Specialization as a specialist in Estate Planning, Trust and Probate Law. On this blog, you will find articles written by me regarding estate planning and probate in California. Many of these articles address recent changes in the law and summaries of the Long Beach Bar Association’s Estate Planning and Probate Section meetings. I hope that you find these articles helpful. If you would like more information about me or my law office, please visit my website at or contact my office at 562.424.8619.

Friday, March 4, 2011

Privity and Duty to Beneficiaries

Probate, Trust and Estate Planning Tidbits.
by John T. Anderson, Chairman
Certified Specialist in Estate Planning, Trust
and Probate Law by the State Bar of California,
Board of Legal Specialization

Privity and Duty to Beneficiaries

A December 8, 2010 decision out of Los Angeles in Hall v. Kalfayan 12/08/2010, B220320 involved the liability of the estate planner to a potential beneficiary of an estate plan which is prepared by the lawyer, but unsigned by the testator prior to her death.

Cutting to the quick, the court held that “in this case” that “a prospective beneficiary of a will cannot maintain a cause of action for legal malpractice against the attorney who drafted the will but did not have it executed before the death of the testator.”  I, for one, oppose even the thought that it was the drafter’s duty, in the slightest, to “have it executed,” which sounds like there might be any kind of responsibility on the drafter as opposed to the testator to get their estate plan executed. 

But, here are the facts:

Appellant, Hall, knew Turner for about thirty years. Appellant concluded Turner needed a Conservator, and petitioned to be co-Conservator with a professional as to the Person and sole Conservator as to the estate.  Turner allegedly had memory and hygiene problems.  A PVP Attorney was appointed.  THIS CASE IS WORTH READING just to realize that the matters set forth in the PVP Report, if they ever did belong, do not belong in a PVP Report.  As a PVP, you represent the proposed conservatee.  Your report should not be a source of information detrimental to the proposed conservatee.

During part of the PVP’s interview, Turner acknowledged a deceased sibling, a niece, and adopted siblihgs, none of which she was close to.

The conservatorship was granted.  The PVP Attorney was discharged, but the order provided that the PVP was to be informed prior to any move to a secure a facility.

Two years later, counsel for Conservator notified the former PVP Attorney of the desire of the Conservatee to do estate planning.  The former PVP Attorney met with Conservatee, who told him everything should go to Hall (the Conservator and Appellant) and nothing to her niece or others. Hall would get her condo and know what to do with everything else.  The former PVP Attorney prepared a draft and attempted to meet with Conservatee, without success.  Then, there were two meetings of little substance, because she was not interested.  Later they met and Conservatee indicated a desire to leave over ½ to Hall and less than ½ to her niece.  A draft Trust was prepared with 55% to Hall and 45% to niece.  It was submitted to Conservator’s attorney, who commented that a Will would be easier on Substituted Judgment than a trust.  A new Will was prepared with 51% to Hall and he, as PVP, was to file for Substituted Judgment.  He was reappointed as PVP and filed the Will to be approved as Substituted Judgment.  Supplements were filed and the niece filed objections.  The niece informed the PVP of her aunt’s prior estate attorneys and he obtained a copy of Wills and a Trust prepared and executed by Conservatee.

The PVP filed the prior documents to show prior intent to benefit the niece and other relatives, some of whom were not deceased, and with no mention of Hall.  Also indicated was the need to give notice to others.  The matter was continued.

Conservatee died without executing a new estate plan.  Hall filed suit for legal malpractice, alleging the PVP failed to timely perform his duties, which deprived Hall of the majority of decedent’s estate. 

The Trial Court granted the estate plannner’s motion for summary judgment.  The estate planner owed no duty to Hall, who was not his client and not a beneficiary of an executed estate plan.

The appellate court agreed that the estate planner owed no duty to Hall.  In Chang v. Lederman (2009) 172 Cal.App.4th 67, the court threw-out a strict test of privity, finding that the preparer of a document which was signed but improperly witnessed liable to a named beneficiary in the document. 

In Lucas v. Hamm (1961) 56 Cal.2d 583 the court found an estate planner preparing a Will liable when the negligently drafted document violated the Rule Against Perpetuities, causing a loss to named beneficiaries.  The court did add that some situations could create liability in such a large and unpredictable amount that would create an undue burden on the profession.

Heyer v. Flaig (1969) 70 Cal.2d 223, overruled on other grounds in Laird v. Blacker (1992) 2 Cal.4th 606 involved the preparation of estate planning documents for a single person, leaving the estate to the person’s children, with knowledge of a pending re-marriage but no consideration of the new spouse in the new estate plan.  The court found a duty, not just to the Testator, but also to the beneficiaries.

What the courts have not done, as recognized in Radovich v. Locke-Paddon (1995) 35 Cal.App.4th 946, is find a duty where the testamentary plan has not been found.  The court here distinguished Biakanja, Lucas, and Heyer where the testator had gone so far as to execute the plans.  “There must be the clearest manifestations of commitment the circumstances will permit.”

The same court from Radovich, which did not find a clear commitment to the plan by Testator in an unsigned estate plan, was able to find that commitment in Osornio v. Weingarten (2004) 124 Cal.App.4th 304, where the executed plan left the estate to a caregiver and the estate planner neglected to advise the testator to seek independent review.  Thus, the planner had privity with the intended beneficiary of the executed estate plan.

In this case, the estate planner’s duty was to the Conservatorship.  In the absence of an executed estate plan, Hall was only a “potential beneficiary.”  There was no duty to Hall.  The evidence did not show that Conservatee expressed a desire to have a new Will, and she only had limited conversations about disposition.  Also, there was no certainty that the court would have approved the plan.  Expanding the planner’s duty to potential beneficiaries would include the niece.  This is just “the type of unreasonable burden on an attorney that militates against expanding duty to potential beneficiaries.”

Mark your calendar for the upcoming Long Beach Trust, Estate Planning and Probate Brown Bag Luncheon:

Thursday, April 28, 2011, Michael Trainotti, Esq., will be sharing his thoughts on Estate Tax and Related Tax Law Changes for 2011-2012 (and 2010?)  In addition, Judge Paul will give special recognition to those who have so faithfully given of their time and expertise to volunteer for the Pro Per Guardianship Panel.

We meet at the Long Beach Superior Court in Dept. G (on the 5th floor).  There is no charge for the meeting.

                John T. Anderson, Section Chair
                Certified Specialist in Probate, Trust and Estate Planning
                by the California State Bar Board of Legal Specialization

Copyright © 2011 by John T. Anderson
All articles by John T. Anderson may be copied for personal use, only. All articles or outlines from others may be used only with their personal authorization. Any approval is for personal use, only, and for non-commercial purposes.
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