Estate Planning, Pages 37–42

People v. Berge

Supreme Court of Colorado, 1980

Facts:

Respondent was a lawyer who had represented Stephenson and his mother throughout the years. In 1967 he prepared a will for Stephenson which gave his art to an art museum and left most of his property to charities.

The next year, he said he wanted to make changes to his will and brought it to respondent with changes penciled in. One was to leave part of his estate to respondent. Respondent declined to prepare the new will because he was a beneficiary and instead recommended two other attorneys who could do it. Stephenson declined and asked if there was another attorney at respondent's firm who could do it. Respondent suggested another attorney, called "Mr. Smith," who shared the building and almost all expenses with respondent but was described as an independent practitioner despite being close to respondent.

Stephenson agreed, respondent called Smith in and told him about the situation, and Smith prepared the will without respondent there. Smith just did the changes Stephenson asked for in 10–15 minutes and did not discuss any other considerations material to the will.

The new will upped the amounts given to his aunts and uncles from $10 to $100, changed one of the charities given money, gave one (DFL) a flat $25,000 instead of 67%, and gave 47% of the residue to respondent. The new form used also had a new provision said that the legacy to a beneficiary would lapse and fall into the residue if he challenged the will. Both wills also named respondent as the attorney for the estate.

When they executed the will, they could not find a third witness easily so they had respondent act as a witness.

Smith did the work as a favor to respondent and did not charge for doing it. Although he considered Stephenson to be his client for the matter, he did not make a client file for him or ever see him after the execution.

Stephenson then died while wintering in Hawaii several years later. A man named DuCharme petitioned to be appointed as special administrator with respondent as his attorney, and such petition was granted. He and respondent went to Hawaii and found a copy of the will and that Stephenson had almost $500,000 (though it was later found to really be $600,000). He requested that the will be admitted to probate and notified the beneficiaries that they would receive money without showing up.

One of the charities, DFL, sent a representative to meet with respondent anyway. He said he heard they were supposed to get 67% of $500,000, like the first will had said. Respondent informed him about the new will and that it just set it at $25,000, but he also lied and said that the estate was only $250,000 anyway.

DFL retained counsel to investigate. They negotiated with respondent, and eventually decided to split the money one-third under the old will and two-thirds under the new. This gave ~22% to DFL, 11% to the charity originally supposed to get 33%, 35% to the new charity getting half, and 31% to respondent. Ultimately, this gave respondent $390,409—or $113,681 after taxes.

Procedural History:

The Grievance Committee found that respondent's conduct with the will violated ethical rules or standards by:

  1. Exerting undue influence
  2. Failing to adopt appropriate safeguards to avoid undue influence and the appearance of impropriety
  3. Failing to deal candidly with heirs and potential beneficiaries

Issue:

Did respondent's conduct violate ethical rules?

Rule:

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If a client voluntarily offers to make a gift to his lawyer, the lawyer may accept the gift, but before doing so, he should urge that his client secure disinterested advice from an independent, competent person who is cognizant of all the circumstances. Other than in exceptional circumstances, a lawyer should insist that an instrument in which his client desires to name him beneficially be prepared by another lawyer selected by the client.

Evaluation:

Although this rule was not written at the time of these events, it merely codified already-accepted ethical practices.

Reasoning:

Respondent did not make great effort to urge Stephenson to find independent counsel. He suggested Smith, but them two of them had a close relationship. Smith did not offer any substantive advice. The fact that he did it for free shows their close relationship. He did not act as an independent attorney, which should that respondent violated ethical standards.

He also lied to DFL, which violated another state ethical rule. Plus, he didn't disclose the details of the will with candor to the heirs. He instead told the beneficiaries they did not have to show up to try to keep them from learning it. He violated his duty of candor.

However, this distribution was what Stephenson wanted, and respondent has not been disciplined before this in his 30 years of practice.

Holding:

Yes, respondent's conduct violated state ethics rules. Ninety-day suspension from the practice of law.

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