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(Inquiry No. )
What are an attorney’s ethical obligations to an elderly client and the beneficiaries of the client’s will when the attorney believes that an attorney-in-fact may be taking advantage of the client?
No disciplinary rules or prior ethics opinions are on point. The question of whether the attorney owes a duty to his client under the circumstances described is based solely upon Ethical Considerations in the Code of Professional Responsibility, not upon Disciplinary Rules. Therefore the opinion expressed by this Committee represents a strong suggestion, rather than an ethical mandate.
Pursuant to Ethical Considerations in the Code of Professional Responsibility, an attorney should make sure that an elderly client is aware of the actions she has been taking and the fact that these actions contravene certain provisions of her will. The attorney may also wish to ascertain whether the client has the capacity to make financial decisions, or whether she is merely taking orders from the attorney-in-fact. Furthermore, the attorney may wish to explore whether his client had capacity to execute the power of attorney in question, and he may wish to examine the provisions of that power. Finally, the attorney owes no duty to the beneficiaries of the client’s will.
The inquiring attorney has represented a 90 year old woman for 10 years. Within the past year or two, he arranged with the client to have her financial statements sent to him for him to forward to her accountant because he was concerned about her ability to manage her money. Within the past year, the client was hit by a car and was subsequently hospitalized. The attorney was contacted by Metropolitan Protective Services (MPS) and he, in turn, put MPS in touch with the client’s only blood relative, a nephew who lives in Florida. The nephew visited his aunt and took responsibility for assuring that she received necessary and proper physical care. Several months ago, the nephew obtained a power of attorney and began paying his aunt’s regular monthly expenses. The inquiring attorney is apparently still receiving his client’s financial statements and he is concerned because, within the past two months the nephew arranged (with the “written approval” of his aunt) for the transfer of a portion of the client’s stock portfolio to the nephew’s relatives, and the client herself signed checks gifting $30,000 to the nephew, his wife and his daughter.
The attorney also notes that several years ago his client executed a will leaving the bulk of her $750,000 estate to two charities.
Inquiring attorney wishes to know what ethical obligations he has to his client, the proposed beneficiaries of his client’s will, and whether he should bring this information to the attention of an appropriate State Agency.
Generally speaking, an attorney owes a duty to his client to protect her interests. The lengths to which the attorney must go to do so depend upon the specific circumstances and the feasibility of taking action on the client’s behalf,. The attorney should inform the client of his concerns and make a preliminary assessment of her capacity to make decisions. He does not, however, owe any duty to the proposed beneficiaries of her will, nor to the nephew who is acting as her attorney-in-fact.
This is an opinion of first impression for the Bar Association of Nassau County, and the New York State Bar Association has not issued any formal ethics opinions on point. However, there is a lengthy report, with recommendations, written by the Association of the Bar of the City of New York, on the topic of how to represent incompetent clients. See ABCNY Committee on Professional Responsibility, A Delicate Balance: Ethical Rules for Those Who Represent Incompetent Clients. Copies are available from the ABCNY or the NYSBA.
1. Obligation of Zealous Representation
The inquiring attorney has an ethical obligation to “represent [his] client zealously within the bounds of the law. ” Code of Professional Responsibility, Canon 7. Pursuant to EC 7-8, a lawyer has the responsibility to do his/her best “to insure that decisions of the client are made only after the client has been informed of relevant considerations. ” Further, “[a] lawyer ought to initiate this decision-making process if the client does not do so. ” (EC 7-8) Thus it is appropriate in this situation for the attorney to initiate contact with his client to inform her that the transfers of assets that she has recently authorized may be contrary to the provisions of her will.
EC 7-8 also provides that the lawyer should provide the client with advice based upon the entirety of his/her experiences as well as his/her own objective viewpoint. Thus, to the extent that the lawyer is of the opinion that the recent actions taken by his client are contrary to the intent she expressed to him previously, it is appropriate that he initiate a discussion about her finances and inform her of both the consequences of her actions and his objective opinion thereof.
Because we recognize that there could be instances in which it would not be reasonable or feasible for an attorney to initiate such a discussion with his client, we recommend that an attorney faced with such a situation use his/her judgment as to the feasibility. However, where it is feasible, we believe that meeting with the client to initiate this discussion and to assess the client’s present capacity is the best course of action.
2. Is the Client Incapacitated?
In the situation described herein, the thorniest aspect is whether the client is incapacitated. She executed a power of attorney in favor of her nephew. We do not know whether the client was competent when she executed the power of attorney, nor whether it is a Durable Power of Attorney. If the attorney opts to meet with the client, these are issues that the attorney should probably explore.
EC 7-11 states that “[the responsibilities of a lawyer may vary according to the intelligence, experience, mental condition or age of a client …. Examples include the representation of an illiterate or an incompetent . . .”
EC 7-12 delineates the responsibilities of an attorney who is representing a person with diminished capacity:
Where an incompetent is acting through a guardian or other legal representative, a lawyer must look to such representative for those decisions which are normally the prerogative of the client to make. If a client under disability has no legal representative, the lawyer may be compelled in court proceedings to make decisions on behalf of the client…. If the disability of a client and the lack of a legal representative compel the lawyer to make decisions for the client, the lawyer should consider all circumstances then prevailing and act with care to safeguard and advance the interests of the client. But obviously a lawyer cannot perform any act or make any decision which the law requires the client to perform or make, either acting alone if competent, or by a duly constituted representative if legally incompetent. (Emphasis added)
Thus, if feasible under the circumstances, it would be appropriate for the inquiring attorney to attempt to ascertain whether his client presently has capacity. He may do this by himself or he may seek the opinion of a qualified diagnostician.
3. If the Client Appears to be Competent to Make Decisions:
If the inquiring attorney ascertains that his client is presently capable of understanding the consequences of her actions, there is no issue of incapacity, and no need for further involvement on his part, except, perhaps, to advise his client about the power of attorney and the need to make provisions for the future, including the possibility that she may, at some point, become incapacitated.
4. If the Client Does Not Appear to be Competent:
If, however, the attorney comes to believe that his client lacks the capacity to understand the consequences of her actions, then his responsibilities are more complicated. We believe that he does have a reasonable responsibility to attempt to protect his client’s interests, while safeguarding any confidences or secrets. If the attorney believes that the client is presently incapacitated, then her interests might best be protected by the initiation of an Article 81 Guardianship proceeding. We believe that the attorney may initiate such a proceeding on his own, or may seek the involvement of an appropriate state or local social service, health or mental health agency, which could then initiate the proceeding. Either way, he must be mindful of the need to preserve client confidences and secrets. (DR 4-101)
Support for allowing the attorney to initiate the proceeding cannot be found in the Code of Professional Responsibility, but can be found in the text of Rule 1. 14(b) of the Model Rules of Professional Conduct, which provides as follows:
A lawyer may seek the appointment of a guardian or take other protective action with respect to a client, only when the lawyer reasonably believes that the client cannot adequately act in the client’s own interest.
Although New York has chosen not to adopt ABA Model Rule 1. 14(b), additional support for allowing an attorney to initiate an Article 81 proceeding can be found in In the Matter of Nhan Thi Thanh Le, 168 Misc.2d 384, 637 N.Y.S.2d 614 (S. Ct. Queens County, 1995), wherein an attorney for an incapacitated person petitioned jointly with a family member for the appointment of a Guardian.
CONCLUSION: The inquiring attorney does have a responsibility to do what he can to safeguard his client’s interests. How he proceeds depends upon what he determines to be reasonable on his part. However, the inquiring attorney does not owe any duty to the proposed beneficiaries of the client’s will or to the client’s nephew.
[Approved by the Executive Committee on January 20, 1998; approved by the Full Committee on February 25, 1998.]