Simple Will- Complex Problems: Will Drafter Does Not Help In Case of Undue Influence

The problem with a Simple Will is that it is simple.  Simple means quick, easy, and, of course, inexpensive.  But, as with all professional services, one gets what one pays for.

Attorneys typically spend little time crafting or supporting simple and inexpensive documents, meaning that the documents are often not worth the paper that they are written on.  Consider the following case, too, when using self-help document creation like on-line services such as legalzoom, where there may be no attorney involved in preparing and executing a legal document.

A New York trial court recently determined that an incapacitated woman was unduly influenced by her agent under a power of attorney, disregarding the testimony of the attorney who drafted a Will for the woman, because the attorney spent little time with the woman and failed to even determine her knowledge of her estate. Matter of Mitchell (N.Y. Sup. Ct., No. 100163/14, June 3, 2016).

Mary Mitchell appointed Gary Shadoian as her attorney-in-fact under a general power of attorney, and health care proxy.   Mary Mitchell, a municipal employee, was entitled to free legal services under a Legal Plan provided by her employer.   Mary Mitchell may have initiated the process of preparing a Will, but after poor follow-up,  Mr. Shadoian contacted the attorney on Ms. Mitchell's behalf to complete the Will. The attorney had one conversation with Ms. Mitchell over the phone and met her once in person. The attorney allowed Mr. Shadoian to be present when Ms. Mitchell executed her will even though Mr. Shadoian was a beneficiary of the will.

After Ms. Mitchell was repeatedly hospitalized, the court appointed guardians for her. The guardians filed suit against Mr. Shadoian, arguing that he unduly influenced Ms. Mitchell. At the trial, the attorney who drafted the will for Ms. Mitchell testified on behalf of Mr. Shadoian that he did not know Ms. Mitchell was incapacitated, but the attorney admitted that he had not made even simple inquiries about her knowledge of her estate.

Mr. Shadoian testified that he and Ms. Mitchell were not romantic, and not social friends, but as a co-worker, he had over time become her caregiver.  Ms. Mitchell was not close to her sisters or other family members, as they admitted, although they testified against Mr. Shadoian that Ms. Mitchell had never given gifts to anyone, never contributed to or been a member of any social organizations, and was a spendthrift unlikely to give anyone gifts or leave her estate to anyone.  

Mr. Shadoian testified that he would drive to Ms. Mitchell's apartment after work nearly every night, and telephone records reflecting scores of telephone conversations between the two were introduced into evidence. For example, between February 17, 2011 and March 16, 2011, more than 60 telephone calls between the IP and George Shadoian were reflected in cell phone records  He testified regarding the actions and efforts he made on Ms. Mitchell's behalf.  By all accounts, Mr. Shadoian was her most intimate and longest existing contact. Those testifying against Mr. Shadoian suggested that his efforts to involve himself in her life were equally successful in discouraging or preventing others from taking an active interest in her care.

The attorney was Mr. Shadoian's only other witness.

The New York Supreme Court ruled that Mr. Shadoian exercised undue influence over Ms. Mitchell. The court determined that Mr. Shadoian's testimony was not credible, and that the testimony of the attorney that prepared Ms. Mitchell's Will "was too threadbare to carry much weight." The court was critical that the attorney "failed to make even elementary inquiries as to the actual size of the estate, her medical condition, her social and familial history. Contrary to usual practice, he allowed an unrelated person, designated as beneficiary, to orchestrate the completion and execution of the will."

The testimony of the person who should have been able to testify competently and independently regarding Ms. Mills wishes and competency was dismissed.  The free Simple Will was unforceable.  Simple.

Cleveland Attorney Accused of Stealing $115,000 from Estate

An 84-year-old Cleveland attorney is accused of stealing $115,000 from the estate of a client, and using the money to pay his bills.

Gerald Cooper is charged in federal court with wire fraud for stealing from the estate of Henry Luke. He used the money to pay credit card bills, sports tickets and mortgage payments, among others, prosecutors allege.

The charges were filed Tuesday in an information, which usually means a guilty plea is forthcoming.

Cooper, a Pepper Pike resident, was admitted to practice law in Ohio in 1957. The Supreme Court of Ohio's website lists him as retired.Gordon Friedman, Cooper's attorney, told a local paper that his client is working toward paying all of the money back.

"He has had an outstanding and remarkable career as a lawyer," Friedman said. "It is unfortunate that this final moment of his practice is kind of a dark mark on his reputation." According to the information:  Cooper filed an application to administer Luke's estate in Cuyahoga County Probate Court. Between February and March 2014, he received $138,397 from three of Luke's bank accounts.

Cooper then took $115,000 from the estate between February to October 2014 by writing a series of checks. The money then went into his personal account.

You can read the entire article here.

Art Collector's Estate Claims Attorney's Drafting Error Cost It $25 Million

The estate of a prominent art collector has sued the attorney who drafted the art collector's will for legal malpractice. The lawsuit, filed in the New York Supreme Court, claims the attorney's error will cost the estate $25 million in taxes.

Collector Robert Ellsworth, whom The New York Times once called “the king of Ming” for his renowned collection of Asian art, hired attorney George Bischof to draft his will. In 2010, Bischof drafted a will that left Ellsworth's estate outright to his friend, Masahiro Hashiguchi, with six charities as contingent beneficiaries. In 2013, Ellsworth changed his will to name Bischof as the sole trustee of a residuary trust. Under the new will, the residue of the estate was left to a discretionary trust that benefited Hashiguchi during his life and then the remainder of the trust was left to charity.

The lawsuit alleges that Bischof drafted the will in a manner that did not allow the trust to qualify as a charitable remainder trust and therefore meet the criteria for the federal estate tax charitable deduction. According to the lawsuit, because of the "negligently and carelessly" drafted trust, the estate will have to pay $25 million in estate taxes that it wouldn't have had to pay if the trust had been properly drafted.

For more about this case from artnet, click here. 

Beware Lapse of Insurance for Vacated Rental Property- A Cautionary Tale about the Demise of the Trusted Professional Adviser

Court Imposes $6.3 Million Civil Penalty on "Trust Mill" Companies and Owners

The Supreme Court of Ohio recently imposed a civil penalty of $6,387,990 against two companies and their co-owners for engaging in the unauthorized practice of law, and issued an injunction permanently barring those companies, their principals and employees from any future marketing or sale of living trusts or other estate planning documents or services to Ohio residents.


In a 7-0  decision, the Court found that American Family Prepaid Legal Corporation and Heritage Marketing and Insurance Services Inc., their co-owners, Jeffrey and Stanley Norman, and multiple employees of those firms engaged in more than 3,800 acts of unauthorized law practice by virtue of their participation in a “trust mill” operation from March 2003 through March 2005.


The Court noted that American Family, Heritage, the Normans, and employees of the two companies had been the subject of a prior unauthorized practice of law complaint and investigation by the Columbus Bar Association (CBA) in 2002 that was resolved by the signing of a March 2003 consent agreement. In that agreement, the respondents acknowledged that providing estate planning advice and marketing and preparing trust agreements and other estate planning documents constitutes the practice of law, and promised to permanently cease and desist from such activities in Ohio.

The Court agreed with findings by its Board on the Unauthorized Practice of Law that, after signing the 2003 decree, American Family, Heritage and their owners used third-party marketing firms to send direct mail ads to lists of Ohioans 65 and older and also targeted senior citizens with magazine advertising containing exaggerated claims regarding the costs and complications of disposing of their assets through a will. Persons responding to the ads were subjected to high-pressure in-home presentations in which American Family’s non-attorney sales representatives provided them with legal advice including inflated “estimates” of the costs of probating their estates and the purported savings the customer would realize by purchasing American Family’s standardized living trust document – regardless of the size or composition of that individual’s estate or his/her existing estate planning documents.

In rejecting American Family’s claim that its actions were authorized because it had registered as the operator of a “prepaid legal services plan,” the Court wrote: “In arranging these appointments, American Family telemarketers did not refer to a prepaid legal plan and did not inform the customer that he or she would be solicited to buy a prepaid legal plan or living trust. The telemarketers did ask, however, whether the prospect already had a living trust. In sales presentations, usually occurring in a customer’s home, American Family’s agents focused on convincing a customer that he or she needed a living trust. If sold, the customer paid a $1,995 fee purportedly for an array of legal services relative to landlord/tenant law, businesses, domestic relations, bankruptcy, and other legal fields, at discounted fees, from a number of listed Ohio attorneys. Almost exclusively, however, the only legal service that the plan members received was the preparation of a living-trust document and related estate-planning instruments such as powers of attorney and a living will. For this reason, for the thousands of memberships sold, few if any members obtained legal assistance other than a living-trust portfolio.”

The Court noted that despite the fact that American Family used sales persons who had never been licensed as attorneys to “advise” customers about their estate planning needs and persuade them to purchase a trust, and that other non-attorneys in California actually prepared the trust documents, the company attempted to legitimize its unauthorized law practice by passing each transaction through a Columbus attorney, Edward P. Brueggeman. Brueggeman seldom spoke with the customers who were purported to be his “clients,” and was paid a flat fee by American Family for every trust document he approved.

In its decision, the Court wrote: “From the start of his employment until March 2005, Brueggeman had an office within American Family/Heritage offices on Citygate Drive in Columbus.  Brueggeman did not pay rent and used the supplies and services provided by American Family and Heritage employees to perform his role. Brueggeman did not hire or supervise the American Family sales agents. Brueggeman, after receiving the agreement, sent a form letter to the purchasers of the plans thanking them for choosing him to prepare their living trusts and their estate-planning documents. The letter also stated that the drafting process would take four to six weeks and invited the customer to call him with questions. … Brueggeman rarely, if ever, actually met an American Family plan member in person.” A formal complaint alleging that Brueggeman’s conduct violated state attorney discipline rules is currently pending before the Board Of Commissioners on Grievances & Discipline (Disciplinary Counsel v. Brueggeman, Case No. 08-090).

The Court noted that the “trust mill” operated by American Family, Heritage and the Normans was similar to other such operations that the Court has found to be illegally engaged in the unauthorized practice of law at the expense of vulnerable consumers, usually senior citizens. The Court wrote: “A living-trust package is often not needed and may even be harmful for persons who are without significant assets, who have simple estates, or whose estates may need court supervision. A basic living-trust package, such as those sold by some of the respondents, may likewise be insufficient or even completely inappropriate for those having more substantial assets and who may need specific legal advice or even tax advice to meet their needs. For this reason, we have repeatedly held that these enterprises, in which the laypersons associate with licensed practitioners in various minimally distinguishable ways as a means to superficially legitimize sales of living-trust packages, are engaged in the unauthorized practice of law. We have also repeatedly held that by facilitating such sales, licensed lawyers violate professional standards of competence and ethics, including the prohibition against aiding others in the unauthorized practice of law. Today, we reaffirm these holdings and admonish those tempted to profit by such schemes that these enterprises are unacceptable in any configuration.”

In imposing a civil penalty of $6,387,990 jointly and severally against American Family, Heritage and their co-owners, the Court noted the aggravating factors that the respondents had been advised of  and acknowledged the illegality of their involvement in the marketing and sale of trusts in the 2003 CBA consent agreement, but shortly thereafter resumed the same activities and engaged in thousands of acts of unauthorized practice that resulted in potential or actual harm to many of their customers for a period of two years. The Court also imposed civil penalties of $10,000 against American Family’s state marketing director, Paul Chiles, $7,500 against office manager Harold Miller, and $2,500 against multiple American Family and Heritage agents who continued to engage in the unauthorized practice of law after signing the 2003 consent agreement.

In its injunction, the Court permanently barred American Family, Heritage, Jeffrey and Stanley Norman, other named parties and “their successors, assigns, subsidiaries and affiliates” from marketing, selling or preparing wills, living trusts, durable powers of attorney, deed transfers or other legal products in Ohio; offering legal advice to anyone concerning estate planning or the execution of legal products; offering or selling prepaid legal plans of any kind to Ohio residents; and from engaging in a wide range of other enumerated activities.

I have had the opportunity to review the estate plans generated by American Family.  With a "one-size-fits-all" mentality, all of the trusts are virtually identical, with clients running the risk that the particularly cumbersome and sophisticated estate tax planning trust, create for them and their families unnecessary burden.  Of course, this is the essence of the attorney-client relationship.  Your attorney should represent you, and should not represent other persons whose interests are in direct conflict with your interests.  Only by having an attorney that is independent from others, and by that attorney discharging aggressively his or her obligation to provide for you specific advice and counsel based upon your specific circumstances, goals, and objectives, will your estate plan fit you.