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Complaints against lawyers over estate administration

31 March 2017 - By Lisette Solis

Complaints arising from disagreements over the administration of an estate are common. Last year the Lawyers Complaints Service (LCS) received 134 complaints in this area, making up just over 9% of the 1,459 complaints received.

The vast majority of estate complaints (90%) did not, ultimately, result in any adverse findings against the lawyers. It is clear that the high volume of complaints in this area is not due to any poor conduct by lawyers, but rather to the unique challenges the field of law presents.

A messy pile of papers

Lawyers handling the administration of estates are dealing with people in what can be a very trying time. After losing a loved one often the last thing people want to deal with is the logistics of settling an estate. This may make things like unanswered emails or curt responses feel more personal than would otherwise be the case.

As one complainant said, “[I feel that our lawyer] has acted unprofessionally, inappropriately and has now held up the process of finalising my dad’s affairs. This added further stress at a very difficult time.”

Sensitive to feelings

Perhaps this complainant would not have been so frustrated by the delays if they had been dealing with issues of intellectual property or resource management rights, but in this situation the complainant felt that the lawyer was prolonging the period before they could move on from their father’s untimely death. Lawyers working in this area must be sensitive to these feelings.

Navigating complicated family dynamics is another major challenge. Working with people who cannot agree or who do not communicate with each other can cause delays and complications. Though not the lawyer’s fault, this may reflect badly on them and create conflicts with the beneficiaries.

Recognising that this can be a particularly tricky area of law, we have reviewed the complaints about the administration of estates from 2016 to identify what some of the most common issues were. Many of these complaints could have been prevented with better communication. Our hope is that understanding what the most frequent complaints are about will help lawyers avoid these issues and conflicts in the future.

Complaints about fees

One of the most common complaints received about estates is over fees. In their determinations standards committees have noted that it can be particularly difficult to provide an accurate fee estimate at the beginning of administering an estate, because lawyers cannot be sure of what complications may occur or what assets are available. While it can be difficult to provide an accurate fee estimate at the outset, lawyers should make their hourly rate clear in their Terms of Engagement and should update their fee estimate as they learn more about the estate. Lawyers can also provide progressive fee estimates. For instance, lawyers can initially give an estimate of how much it will cost to complete the work necessary to apply for probate, and then, once some work has been done, a more comprehensive figure.

Another misunderstanding that frequently occurs is that beneficiaries often do not realise that legal fees are being accrued while claims against the estate are being resolved. Beneficiaries often think the lawyer is not doing anything during this process, but in actuality he or she is reporting to the court throughout. It is prudent for lawyers dealing with estate claims to advise the executors about the fees and delays that are likely. This would be especially wise in situations where one of the beneficiaries is the person making the claim, otherwise the beneficiaries may complain that the lawyer allowed the conflict to persist in order to run up their legal fees.

Complaints about delays

Of all the complaints submitted about delays last year, 25% pertained to estates. The administration of an estate can be a lengthy process – typically beneficiaries will have to wait around six weeks for probate to be granted and then six months from there before any distribution can be made. Complications can make this process take well over a year, and in some cases several years.

Beneficiaries who are unfamiliar with the administration of estates do not expect this process to take so long. It is important that this process is explained to them at the outset, and that they are reminded about the steps that need to be taken and provided with updates. This is especially important in situations where events indicate there could be significant delays.

One complainant said: “We understand that there are complications but we do not ever receive regular account details or detailed [explanations of the] process that is being followed. It has been nearly 5 years and we do not know the current account status or how much we owe to the lawyer and even though we have told him that the delay in dealing with the estate is causing family issues and concerns… it does not seem to matter to [our lawyer]. We were thinking that surely [our lawyer] should have been regularly sending us at least quarterly information of the current estate status and some kind of indication of when he expected the issues to be resolved.”

Many people feel that they cannot move on after the death of a loved one until the estate is resolved, and it is understandable that, after five years, a family would be frustrated by the process. They acknowledge that it has not been a straightforward estate, but more sensitivity to the stress the family was under and better communication could have likely defused this issue.

Not communicating with all beneficiaries or executors

The Lawyers Complaints Service frequently receives complaints alleging that a lawyer communicates more with one of the beneficiaries than the others. This is often seen as the lawyer favouring one of the beneficiaries over the others. Of the 19 estate-related complaints received last year about conflicts of interest, six mentioned the lawyer’s failure to communicate equally with all involved. Many of the 40 complaints alleging inadequate reporting and communication mention this as well. Similar complaints are also received about the lawyer administering the estate dealing with just one of a number of executors.

One complainant wrote that the invoice received documented multiple communications with one of her brothers and none with the other. She complained that this exacerbated issues between the siblings, because the excluded brother felt neglected and was thus less willing to cooperate with the other beneficiaries. Wherever possible lawyers should include all beneficiaries/executors in communications.

However, in situations where the lawyer is acting only as the solicitor and one of the beneficiaries is acting as the executor or administrator, this is not always allowed. This can lead to complaints when the beneficiaries do not understand the difference between the solicitor’s duty to the executors or administrator versus their duty to the beneficiaries.

Often beneficiaries do not realise that the estate solicitor can only accept instructions from the executor or administrator, and can only report to the beneficiaries on their instructions. Solicitors should ensure that executors are keeping the beneficiaries informed. This can, of course, be difficult in situations where the beneficiaries do not get along with the executor or administrator, and working around this is an especially challenging part of handling estates. It would be helpful in these situations for solicitors at the outset to remind the executors of their reporting duties and encourage them to include the beneficiaries in updates whenever permissible. This makes the role of the solicitor clear to the beneficiaries and helps them understand why communication received from the solicitor may be addressed to the executor/administrator.

Complaints about testamentary capacity

Complaints alleging that a will was made for someone who lacked testamentary capacity are less common than the aforementioned types of complaints, but often take a long time to resolve. This is a very serious allegation which standards committees rarely take further action on, but which complainants usually want thoroughly pursued. Of the 17 decisions on estates complaints that were referred to the Legal Complaints Review Officer (LCRO) for review last year, five were about a will being drafted for someone who allegedly lacked testamentary capacity.

The LCRO has noted that although there is a strong presumption of legal competency, “practitioners are not qualified to make what is essentially a medical decision” (SJS and CNS v MC, LCRO 213/2012). Clients may fluctuate between levels of lucidity making it difficult for a lawyer to assess their competency based on limited interactions.

The LCRO later noted, in that same case, that because of this lawyers need “to exercise a considerable degree of care if their client appears to have difficulty providing instructions or seems incapable of understanding the consequences of the legal processes in which they are engaged.”

Among the many other factors which may raise concerns about testamentary capacity, estates lawyers should be especially cautious if the client has a relevant medical history, comes to the meeting accompanied by someone who may be influencing their wishes, suggests significant changes to their current will, or if they meet with an elderly client whom they have not met before. Lawyers with doubts about their client’s testamentary capacity should enquire further into the matter and where there are serious concerns, obtain a report from a medical specialist. This will not only help protect the lawyer against any allegations but may ease the concerns of family and friends.

Complaints about family members who are lawyers

The LCS also receives complaints about family members who are lawyers but are not acting in a professional capacity on the estate. While complaints like this are less common, they are relevant to lawyers practising in all areas. It is natural that family members who are lawyers will be appointed as the executors. However, if disagreements arise, it may seem to the other beneficiaries that the executor is using their legal knowledge to manipulate the situation for their benefit. A Legal Standards Officer suggests that it is best to appoint more than one executor. This should help assuage any doubts about the executor abusing their status as a lawyer. It is also important to be careful not to blur the line between acting in a personal versus professional capacity, such as by using the firm letterhead.

Lisette Solis is an employee of the New Zealand Law Society.

Last updated on the 31st March 2017