When your Estate Planning Attorney is Not Your Attorney in New York.

The New York State Supreme Court (Shafer, J) reiterates that to sue an attorney for malpractice arising out of alleged negligent will preparation there must be an attorney client relationship before the beneficiaries may sue for legal malpractice in New York. That is, there must be “privity” of contract between the attorney and her client before the client has standing to sue for legal malpractice. For a complete copy of the recent decision Leff v Fulbright & Jaworski, LLP.

Beneficiaries of wills who get less than they think they are due often call us to determine if they have any claims against the attorney. The answer in New York State tends to be who, if anyone, may sue for legal malpractice when attorneys make mistakes planning estates.

As upheld by this Court, New York is one of the few states which recognizes the “doctrine of privity,” meaning that, when the decedent died, she may be the only one who could have sued the attorney for screwing up the estate plan. This rule is relaxed in the presence of “fraud,
collusion, malicious acts, or other special circumstances, but one must investigate and carefully investigate the facts to survive dismissal under those cases.

In this case, the Estate was valued at nearly $90 million. Shortly after the Husband’s death, his son from a prior marriage made a claim under an old separation agreement with the first wife, wherein the Husband agreed to give “no less than one-half of his probate estate” to the son.

The claim for malpractice alleged that the Husband’s New York attorneys failed to consider this agreement when drafting the most recent estate plan. Indeed, the attorneys admitted that they had only discovered the agreement when responding to the son’s claim against the Estate.

After settling the case with the Son, the attorneys faced suit by the new Wife contending the attorneys committed legal malpractice by failing to inform the Husband about the existence of the separation agreement.

Not only did Justice Shafer dismiss the claims on the ground that the Wife had no “standing” to sue the attorneys, but that her claims for malpractice were speculative because there was no evidence to suggest that he would have indeed changed his plans had he known of his agreement.

This court finds that the evidence does not indicate that plaintiff was ever involved in a joint estate plan with her husband, or that a relationship approaching ‘near privity’ with defendants vis-a-vis Leff’s estate plan existed such as might make defendants plaintiff’s attorneys with regard to Leff’s personal estate plan.

This ruling makes sense in this case. If you read the facts, it was clear to the Judge that the Husband and Wife never consulted with the defendant attorneys together, that only the Husband sought their advice on the Estate Planning, and that she had her own attorneys for such planning issues. The Wife repeatedly denied knowing nothing about the estate plans of her Husband, so she had a hard time showing that these lawyers were representing her. Even if she had proven the relationship, there was nothing but speculation that the Husband would have done anything differently.

The bottom line: if the wills are not “reciprocal,” Husband and Wife should understand that there is an inherent conflict of interest in having one attorney do both estate plans. As hostile as you may feel, there may be no claim for legal malpractice, but you are welcome to contact our New York Legal Malpractice consultants to discuss the facts.

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