The Ethics of Disclosure and Testimony by Estate Planners
“Loose Lips Might Sink Ships—The Ethics of Disclosure by Estate Planners,” that is the subject of today’s ACTEC Trust and Estate Talk.
This is Travis Hayes, ACTEC Fellow from Naples, FL. Have you ever received a letter requesting a copy of your client’s estate planning file or an affidavit, a deposition, or trial testimony? Few estate planners consider the ethics and practical impact of taking proper steps when receiving a subpoena that requests their clients’ estate planning file or related testimony. To give us more information on this topic, you will be hearing today from ACTEC Fellows Shaheen Imami of Bloomfield Hills, Michigan and Leiha Macauley of Boston, Massachusetts. Welcome, Shaheen and Leiha.
Thank you. Let’s be honest. Most estate planning attorneys don’t think about issues involving the production of their files or having to testify, at least not very often. The point we want to get across today is that this can happen to you, so you might as well have a clue of what to do if and when it happens. As the saying goes, an ounce of prevention is worth a pound of cure.
Attorney-client Privilege, Testamentary Exception and Work-Product Doctrine
So, let us start off with the attorney–client privilege, which is an evidentiary rule that is construed quite narrowly. What do we need to watch out for as estate planners? The first item I would like to touch on is agents and their role in destroying the confidentiality element that is needed to achieve attorney–client privilege. When you are working with an accountant or an appraiser, keep in mind that not all your communications with them will be privileged, and their being copied on emails may not actually allow you to take advantage of the privilege in the future. Other things to keep in mind are that third parties being present, like agents, may destroy the privilege as well, but there are exceptions in some states. For example, if you can satisfy the court that the third party being present is necessary for the communication effectively between the client and the lawyer, like a translator or an accountant who is supporting the tax analysis, you may be able to maintain the privilege.
One item we would like to note today is the testamentary exception to the privilege. This is an exception to the rule that allows heirs to come forward and waive the privilege of a decedent if they are arguing about and trying to determine what the intent of the settlor or the testator was. There is the ability for clients to waive the privilege and something to keep in mind is that a personal representative or a guardian can stand in the shoes of a client and can waive the privilege. One thing to keep in mind though, for sure, is to watch out for the duty of confidentiality, which can supersede any waiver of any personal representative or of the attorney on behalf.
The next item we would like to touch on very briefly is a work product doctrine. The attorney–client privilege protects communications that are confidential between a client and her attorney. The work–product doctrine applies more broadly in that it protects communications between an attorney and, perhaps, agents or appraisers. But those communications and that work needs to be only in the anticipation of litigation or during actual litigation.
Now, I’m going to turn it back over to Shaheen who is going to give us a little bit more insight into actual litigation — what to think about.
So, as estate planners, what kinds of issues might compel our participation in litigation? Well, you have that almost ubiquitous will or trust contest. You have interpretation issues related to beneficiary rights of fiduciary liabilities, including ambiguities and side letters, potential claims involving third-party non-beneficiaries such as contract claims, tort claims, tax apportionment issues, disputes arising from the client’s incapacity, a divorce or support action involving the client, asset protection planning and claims of fraudulent transfers, the legal malpractice issues, and, if you are being cynical, someone who might be trying to disqualify you as counsel from defending the documents that you drafted.
So, how do you prepare for the end of the world if someone comes asking for your file or testimony? Well, as the saying goes, forewarned is forearmed. So, in the beginning, it is always best to prepare with the end in mind. Keep your head out of the sand. You need to remember that you have to understand more than just estate planning. You have to understand how administration works and how litigation works and how your documents or actions might be attacked or questioned in the future. And about those procedures, if you have a thorough procedure that you apply predictably and consistently, you will better prepare yourself for inevitable questions about your client’s actions. Notes play a very important part in that procedure role. In the end, it is usually about the client and not you.
So, what you might think about the documents that you drafted is not necessarily what we are going after here. It is about what the client thought and what the client understood and that is why you are being asked questions. And so, also don’t get cocky if someone comes to you and starts asking these questions. You have to assume that they have reasons for asking the questions; and don’t underestimate what they are looking for or how they are looking for it. Your best friend in this type of situation is maintaining your credibility. Your competence or expertise mean nothing if you cannot remain credible because the court, if it does not believe you, or a jury, if the jury does not believe you, is not going to help your client or you.
So, what are some of the specific issues for the scrivener to consider? First you should assess the procedural posture and context of the litigation. Is it before or after the client’s death? If before death, is the client incapacitated or is it related to some other kind of action involving the client? What are the issues involved and where do you fit? Are privilege or other protections triggered? If the issue involves the attorney–client or some other protective privilege, then who holds that privilege or was the privilege properly and completely waived? If the issue involves client confidences, then what are your ethical obligations? If you violate the ethical obligation, are you setting yourself up for a private cause of action or a grievance against you later? If the issue involves the attorney work–product doctrine, what is the scope of your protection? Are you prevented from claiming protection because of a conflict with the client’s interest?
Next you should consider issues based on the existence of privilege work product or confidential communication protections. The burden is initially on you. You will have to explain yourself. Who are you trying to protect? An advice of counsel defense may raise its own problems in the context of these issues. And is it really privilege for protected information or is it just about facts? The manner of the inquiry or request matters as well. How does it come to you — a phone call, an e-mail, a litigation hold letter, a subpoena, a court order? What is the difference? Well, it differs, if you are a party to litigation. If you are a party, then you have to reply to any proper discovery request as well as a court order or even a subpoena. If you are not a party to litigation, then you really only have to reply to a subpoena or a court order. A litigation hold letter or preservation letter really just asks you to maintain the status quo and doesn’t require a response at all.
So, if the request comes to you, is the proposed disclosure proactive or voluntary? If it is proactive or voluntary, which means that it is not accompanied by a subpoena or court order, do you even disclose or acknowledge a representation? The identity of your client, technically, is confidential information. So, if someone is just fishing for information as to whether you represented someone and drafted some documents, you probably shouldn’t even respond. And just because you can, doesn’t mean you should. So, sometimes, even without prompting, you might just want to help by providing your perspective and expertise. Resist this temptation because it can get you into hot water. It might not be helpful to be helpful. If you are expressly authorized or you know the privilege was waived or if you know that no privilege or other protection exists, then you may consider being helpful. If you are not confident of either, then just stay quiet.
Can you reasonably rely on the perspective waiver from your client contained in your retainer agreement or subsequent correspondence regarding privileged or confidential communications? You probably can. The ethical rules generally allow a client to prospectively waive the attorney–client privilege. However, if you are going to do that, be very, very detailed in the manner in which it can be waived. That way, there is no question as to a particular circumstance and whether it fits within the actual waiver provided by the client. And although protections of the attorney work–product doctrine generally are yours to waive as the attorney, if that waiver only serves your interest but not the client’s interest, it is quite possible that you are not going to be able to maintain that protection. So, usually, in these circumstances, the best response still is a polite, but firm, no.
Now, on the other hand, if the proposed disclosure is reactive or responsive, which means that you got a subpoena or a court order, then you are required to respond. Sometimes you may be required to object to a subpoena to force the issuance of an order. You might do that in order to protect yourself further because you are unsure about the scope of the subpoena or the proposed disclosure under the court order.
Look before you leap. Demand a copy of the petition or the complaint to determine whether a privilege or other protection might apply. An objection, if you do make one, isn’t “set it and forget it.” If you assert a privilege or other protective doctrine, you have to describe the basis and be ready to satisfy the burdens of establishing that protection if a motion to compel is filed. If you keep these things in mind and you stay reasonably diligent, it is probably going to be difficult for someone to hold you at fault in front of the court’s eyes or even a client’s eyes because you are trying to do what you are supposed to do to maintain your ethical responsibilities to the client.
In responding or objecting to a subpoena, be aware of your state and local rules about subpoenas. Take it seriously. Be mindful that a failure or willful refusal to respond to a properly issued subpoena could subject you to court-imposed sanctions or even an ethical complaint. Do not let the opportunity to object pass you by. If you believe that there is a privilege or protection, make an objection. Some courts might be lenient in finding a waiver, but others – there is no need to tempt fate and other circumstances.
Your work probably does not end with the objection. If you are claiming a privilege or other protection, you should prepare a privilege log that describes the nature of the documents, communications, or other tangible things not produced or disclosed that will enable other parties to assess the claim.
Tips for Lawyers Testifying in Court
Now, if you are called to testify as a witness, there are several things that you need to keep in mind. First, you should get your own counsel. The old adage that a lawyer who represents himself has a fool for a client is completely warranted here. And be careful if you pick someone from your own firm. You might be causing some other issues, from disqualification issues or maybe just problems within the firm in maintaining some peace in trying to defend you against certain actions. Don’t act in a vacuum. Make sure you understand the pending issues and where each side believes your testimony fits. Know the rules if you intend to raise an objection based on privilege or other protected information. So, review your state and local court rules to determine whether you have a duty to raise the issue of privilege before you testify.
Other general considerations — once you are in front of the microphone and the court reporter — just the facts, ma’am. Almost always, you are being called as a fact witness, not as an expert. So, just remember what you are testifying to. Don’t wing it. Take the time to understand the issues at hand, and carefully consider your testimony. Take it seriously. You must appreciate and respect the importance and solemnity of providing sworn testimony that is embodied by the oath and reaffirmation. And know what you don’t know. Be aware of things that you don’t really know. What I mean by that is where you do not have firsthand knowledge versus things that you simply presume because of experience or your own interpretation of documents or events. Also, things you review or prepare for a deposition or trial testimony may be fair game for the interrogating attorneys to see. Also, remember it is the interrogating attorney’s job to ask you questions to elicit certain information. It is not about you, probably. You are not there to tell your story, but you are there to tell the truth. What was the middle part? Make sure you understand the question asked. If you don’t, ask the attorney to repeat or rephrase the question. Keep it short and sweet. Limit your answers to yes or no whenever possible. If you don’t know, don’t be afraid to say you don’t know. And if you don’t remember, don’t be afraid to say that either. And “it doesn’t matter what I can believe, it only matters what I can prove.” That is a quote from “A Few Good Men,” and it is quite true. Don’t offer, don’t guess, and don’t speculate.
Speed kills—take a beat to wait for an objection so your attorney can object on the record and you can even understand the question. Stay cool. Don’t lose your temper or become argumentative, but you can correct a misstatement or mischaracterization. It is perfectly okay to say, “that is not what I said.” Accuracy counts. If you realize you misspoke, ask if you can correct the record. If the interrogating attorney refuses, then make certain your attorney knows so that record can be corrected.
Silence is golden. There is no such thing as an awkward silence, so don’t feel obligated to fill it. Do not let the lack of candor be your kryptonite, or as my mom says, ‘do not be your own hemorrhoid.’
Thank you both for giving us more information on ethics of disclosure by estate planning attorneys.
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