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  • Jenny Rozelle, Host of Legal Tea

Cautionary Tales - Estate Planning (With a Dose of Drama) - Episode 66


Hey there, Legal Tea Listeners –This is your host, Jenny Rozelle! Today’s episode of Legal Tea is a cautionary tale, where we talk about real-life cases with real-life clients with real facts – they’re things me or my office have worked on. For today’s episode, we’re going to be talking about a recent client that came into my office, who already had an estate plan – specifically a Revocable Living Trust – but they wanted to come into the office to see “if everything was still up-to-date and okay.” I think what really prompted them to pull out their estate planning binder was that this client is a married couple and one of the spouses had a medical event that lead to a fairly significant physical and cognitive incapacity. So, this big ol’ binder became … really real for them … really fast, right? (Side note: That’s often what happens. So, that’s why estate planning is SO important to do while you’re still healthy – so you’re not having to deal with an attorney in the 11th hour or while you’re not feeling well.)


One of the other attorneys at my office is actually who met with this couple – and following the meeting, the attorney came to me like, “What should I do here … there’s a lot going on … their Trust has several gaps … I feel bad because they paid for this hunk-of-junk but it’s not well-written at all. So, I feel bad if I really should tell them that they should, sort of, start over.” Once the attorney explained more about what was going on, it was clear that the main question that the client would have to answer would be: Do they do a Trust Amendment or do they do a Trust Restatement? So, while talking about Amendment versus Restatement is not really wanted I had planned on talking about for this “Cautionary Tale” … I think quickly chatting about this may be helpful to know – and knowledge is power, right?


So, if you have a Trust and you want to make changes to it, you have two options on how to do so – Amending it or restating it. What’s the difference, you ask? Well, with an Amendment, the original Trust document stays intact and an Amendment becomes another free-standing document … a Restatement, conversely, is a document that FULLY replaces the original Trust document. Depending on the number of changes and type of changes, sometimes the better and recommended option is a Restatement because, like I said, it fully replaces the original Trust instrument. Though, because a Restatement is more work, it comes with usually a higher fee. But, say the changes are fairly minor, an Amendment may be okay, too, and an Amendment is probably going to be more affordable.


With this couple, one of the changes they needed to make was … big. With the spouse’s medical event and subsequent physical and cognitive incapacity, we needed to remove her as Trustee. Doing this through an Amendment is doable – but it’s not my recommendation. When you go to take that into, say, a bank to update records to show now there’s only the husband as Trustee, an Amendment is going to be more difficult to get them to understand over a full Restatement. So, this is exactly what the attorney in my office and I chatted about – recommending a Restatement over an Amendment (even though, yes it’s more costly). It was the better option.

So, some time passes, maybe a couple days, and I hear from the attorney again about this same client/case and she said, “You’ll never guess what I found. The Indiana attorney that drafted their Trust was suspended from the practice of law because basically he worked with an insurance company and they, together, (like the suspended attorney and insurance company), slung these Trusts out … and he ended up getting in trouble for it.” I was like, “Wait – WHAT?!” I’m not here to name names, drop who it was, and blast that attorney – but I think it’s definitely a “Cautionary Tale” that ultimately, the Supreme Court found that this attorney did not comply with our legal ethics rules and suspended him. We’re going to talk about “what” you should look out for here in a second, but ultimately, when we shared with the client what we discovered about the attorney, who created the Trust, they were GUNG HO about doing the Restatement and getting that attorney’s Trust out of here. I don’t blame them at all.


So, what happened with this attorney and the insurance company, and specifically why was it “wrong” ethically speaking? Well, let’s start with the facts first – The insurance company had an insurance marketing agency that marketed providing “estate planning services to avoid probate.” In the background, the attorney that got suspended assisted the insurance company by creating the estate plans (for the insurance company, which was for the insurance company’s client).


Typically, this is what the process looked like – the customer spoke with this attorney by phone (not in person), and rather than providing the customer with estate planning options, the attorney would basically listen to what the insurance company told them to create – and not really …. counsel and advise the customer on their options. Then, rather than meeting with the customer, the attorney would send the drafted estate planning documents to the insurance company and a sales representative would assist with getting them executed by the customer. Then, the insurance company would pay that attorney a share of the total fee collected for the client.


This all occurred for nearly ten years. Ultimately, this caught up to the attorney and there was a disciplinary action started. The Court held that the insurance company engaged in the unauthorized practice of law for several years and in doing so, the attorney was named as a defendant in the case. As part of the case, all the parties agreed that the attorney violated the following Professional Rules of Conduct (which are Indiana’s Legal Ethics rules):


  • Failure to reasonably consult with a client about the means by which the client’s objectives are to be accomplished;

  • Improperly accepting compensation for representing a client from one other than the client;

  • Improperly sharing legal fees with a nonlawyer;

  • Permitting a person who recommends, employs, or pays the lawyer to rend legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services;

  • Assisting in the unauthorized practice of law;

  • And improperly accepting referrals from a lawyer referral service.

Yikes. That’s a lot. The attorney, when this happened, had no prior history with Indiana’s Disciplinary Commission for attorneys. That just stinks all around. Ultimately, like I mentioned earlier, the attorney got suspended. I happened to look up the attorney and what they’re up to nowadays – and he’s still suspended. The case actually allowed him to request reinstatement to practice again, so I’m not sure if he said “nah!” or if the Court said “nope!” Nonetheless, he’s not a practicing attorney in the state of Indiana anymore. It shows he’s still suspended and should not be practicing law.


I bring this case up, this situation up because this stuff is STILL happening today. Heck, that case happened just in 2014. So, it wasn’t that long ago. More and more states, too, are coming after these types of things and they’re doing it to protect YOU – because when attorneys start sliding away from ethics rules OR when non-attorneys start quasi-practicing law, neither of which are okay; neither of which are good for you, the potential or current client. Ethics rules exist for a reason and the primary reason is to protect the general public.

As you may have noticed, I’ve not named any names – the insurance company, the attorney – and I’ll continue that trend, even though I personally want to name drop, but like I just mentioned – this stuff is still out there, so be mindful of this topic and be mindful of this episode. I could specifically name drop companies that are doing this right now – primarily that are non-attorneys doing quasi-law AND attorneys that are ”behind the scenes” doing legal work and ACTIVELY doing exactly what the suspended attorney did. And unfortunately and sadly, they have a lot of clients – because they’re often cheaper than qualified attorneys practicing law the “right way.”


I could go on this soapbox for days – you want to know why they’re cheaper? It’s because they aren’t attorneys OR the attorneys are not the ones in the “front” (like the suspended attorney). A big reason that qualified attorneys practicing law the right way are more expensive is because we have to carry so many more expenses than non-attorneys doing quasi-law. Just to name a few – we have to carry malpractice insurance; dues for bar associations for local bar association, state bar associations, national-based groups and associations; license registration and renewal fees from the State of Indiana; pay for mandatory continuing education courses (which oh my gosh, those are pricey); costs to gain access to online research platforms to provide access to cases, rules, etc.; etc. Do I dare even bring up how expensive it is to go to law school (which of course non-attorneys don’t have to go)? The list could go on-and-on-and-on. I’m not saying non-attorneys DON’T have fees and things, but I’d take a wild guess that our legal-based fees and truly, the COST to be a licensed, in good-standing attorney … are far more than theirs.


But then, that’s not addressed the licensed, in good-standing attorneys that are the ones “behind the scenes” doing legal work for customers. I have one parting line for you – I hope you don’t end up like the suspended attorney. Our Rules of Professional Conduct are there for a reason – and skirting around them and/or dipping into the gray area, just remember how difficult it was to become an attorney and as I tell people all the time, things that put my license into jeopardy are not worth it. And that’s all I’m going to say about that.


Alrighty … shifting to next week. Well, if you’re an avid Legal Tea Listener, you know I always give a sneak peak at the end of the episode about what next week is going to be about. Drumroll …. Next week, I’m taking a week off. While I get some support on running this podcast from my office, shout out to Indiana Estate & Elder Law team, I do most, if not all, of the preparation, recording, scheduling, etc. of episodes. I’ve found myself recently being pushed a little thin and for that reason, to give me a chance to catch up and catch my breath, I’m going to take next week off. Not to worry, though, this is not a sign of this podcast slowing down or anything – I promise, I’ll be back at it the following week’s Tuesday, October 25th, with new material. Talk to you then and until then, be well!


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