Every so often, estate planning attorneys make mistakes when drafting a client’s testamentary documents or Trust—negligent acts that provide grounds for harmed parties to bring legal malpractice action in probate litigation.
Iowa code imposes high duties on lawyers to perform with competence and to act zealously while working in the client’s best interests. When estate planning counselors breach these ethical standards, it usually ends up negatively impacting an heir or beneficiary’s inheritance.
Let’s have a look at estate planning negligence and what you can do when you discover your legacy has disappeared because of an attorney’s mistake.
Common Estate Planning Negligent Acts
Estate lawyers are expected to develop legally binding plans that reflect their client’s posthumous intentions while recognizing both Iowa code and state tax laws.
Accordingly, planning documents include: Wills and Trusts, powers of attorney, health care directives, beneficiary designations, gift recipients, letters of intent, and/or guardian assignments.
Estate planning mistakes happen when a lawyer fails to consider one or more of the following while performing:
- Drafting Errors. Estate attorneys must draft their client’s planning documents (notably their Wills and Trusts) in a way that reflects the client’s true intent and last wishes—negligence happens when a document’s language is too vague to understand or when it doesn’t accurately identify estate assets or recognize the client’s heirs.
- Drafting Competency. Professional estate plans must always operate in the best interest of the parties involved, which includes mitigating expensive probate tax consequences and funding trust administration adequately.
- Due Diligence. Before drafting a client’s Will or Trust, the law imposes on estate attorneys a duty to scrutinize the client’s assets and to discover if the properties actually exist.
- Execution Errors. The courts will not enforce estate planning documents that are not properly executed (signed) or do not follow execution rules under Iowa Code.
- Testamentary Capacity. Iowa Code also requires attorneys to test and document their client’s mental capacity to draft and execute an estate plan—capacity further means the clients must:
- fully understand the assets, debts and real property they own;
- recognize who will receive their assets; and
- know how their estate plan will impact their heirs and beneficiaries.
How to Remedy Estate Planning Mistakes
The simplest approach for correcting estate planning document errors is to repair them while you’re alive—before the mistakes harm someone else.
This means you should periodically reevaluate your planning instruments to ensure the writings always express your true intent and recognize the heirs and beneficiaries that will inherit from your estate. If you notice a mistake, contact the lawyer who drafted the plan immediately and ask the attorney to prepare new documents for you.
If, however, estate plan errors actually harm someone after your passing, and if the harmed party holds proof that your estate planning attorney made the mistake, a legal malpractice lawsuit may be the harmed party’s only option for redress.
Legal Malpractice in a Nutshell
Attorney negligence in estate planning arises when lawyers carelessly or recklessly perform the job their clients hire them to do. Iowa legal malpractice claims have three elements of which a harmed party must prove before he/she can secure a favorable malpractice award from the courts.
- Duty and Privity. First off, the accused lawyer must have held a legal duty to not harm the claimant. Estate planning attorneys always bear contractual obligations (privity) with their clients to deliver them competent legal services.
Many heirs and beneficiaries, however, don’t discover testamentary document or Trust drafting errors until after the client has passed away. Therefore, you may not realize that an attorney has harmed your inheritance until years or decades after a loved one has executed his/her estate plan.
Consequently, estate planning attorneys, under particular circumstances, also hold a duty to the intended heirs and trust beneficiaries in an estate plan. But keep in mind that only an experienced probate and Trust litigator can tell you whether you actually hold standing to bring a legal malpractice claim against a lawyer in Iowa.
- Breach of Duty. If you hold standing to sue an estate planning lawyer and you’ve secured evidence showing the attorney did not perform his/her job diligently, you must also prove the respondent breached the duty owed to you.
This legal malpractice element is usually the easiest to establish. Here, your probate dispute attorney would only need to affirm that an ordinary, careful legal professional wouldn’t have made the same estate planning mistake.
- Financial Harm and Causation. Finally, duty and breach means a negligent act took place; however, if the act did not cause damages, then you would have no grounds to pursue legal action. Causation is unquestionably the most difficult element to prove in a legal malpractice claim because the harmed party always bears the burden of showing the deceased’s actual intent.
Imagine you are an heir expecting to receive the entire family home, but after the Will reading, you discover that your stepfather stands to take a fifty percent share in the property. You think that your mother’s estate planning attorney is at fault for making the terms of your mother’s Will so vague that her personal representative misinterpreted her true intent.
To prove causation and damages, you’ll have to provide the courts with physical evidence (i.e. letters, text messages) that shows your mother actually intended the property to be yours alone, a super tough (but not impossible) burden to overcome.
More on Legal Malpractice Claims for Beneficiaries
We mentioned above that only the clients of estate planning attorneys hold direct privity to sue for legal malpractice. Iowa estate law, however, provides for a limited exception to this general rule when the lawyer’s mistake harms the “intended beneficiaries” in a Will Trust.
Here, the courts will apply a six-factor balancing test when deciding whether an estate planning attorney is liable to a harmed beneficiary:
- Certainty—would the beneficiary have definitely inherited if not for the attorney’s legal malpractice?
- Impact—how will the legal malpractice lawsuit affect the other beneficiaries named in the Will or Trust?
- Proximity of Harm—was the connection between the attorney’s negligence and the intended beneficiary’s damages contiguous?
- Foreseeability—was the beneficiary’s harm foreseeable?
- Public Policy—would a favorable decision reflect estate law precedent?
- Undue Burden—would recognizing the beneficiary right to sue impose an undue burden on the legal profession?
Iowa Code § 169.21 further establishes a statute of limitations on intended beneficiaries. Harmed parties must bring their legal malpractice claims within two years after first discovering the attorney’s negligence “through the use of reasonable diligence” or “through notice in writing” of the existence of the injury—whichever happens first.
The Iowa Supreme Court affirmed this rule when deciding Millwright v. Romer in 1982 and Norton v. Adair County in 1989.
Intended Beneficiaries Must Bring Timely Malpractice Claims
Even when intended beneficiaries hold an implied standing to sue an estate lawyer for malpractice, receiving a favorable judgment within the legal statute can sometimes be challenging, as found under the circumstances in the Millwright case.
In 1982, Donna Millwright sought to hold her father’s estate planning attorney liable for mistakenly not considering the rule against perpetuities—a rule that holds future interests must vest within 21 years after the death of a life—when drafting her father’s testamentary documents.
The father’s lawyer later argued that Iowa’s statute of limitations barred Millwright from bringing a malpractice claim. The probate court agreed and ultimately ruled in the attorney’s favor.
On appeal, the Supreme Court of Iowa applied the six-factor balancing test discussed above, found that Millwright held standing to sue, and ruled the two-year time limit began the day Millwright’s father passed away.
Justice Arthur A. McGiverin thereafter affirmed Millwright should have reasonably known during the Will reading that the rule against perpetuities would have someday revoked her inheritance.
The statute of limitations therefore barred Millwright’s legal malpractice lawsuit, since she waited until she suffered actual harm (many years later) to bring her legal action, according to the Court.