New Zealand Law Society - Estate not dealt with competently

Estate not dealt with competently

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Lawyer Jennifer Elizabeth McDonnell has been censured and fined $10,000 by a lawyers standards committee for failing to deal with an estate in a competent and timely manner.

The committee noted that there were a series of delays, which had arisen because of incompetent drafting of the wills. “This created a conflict between the interests of Ms McDonnell and [a Mrs A],” the committee said.

Errors in will

In March 2007, Ms McDonnell was instructed to prepare mirror wills for a Mr and Mrs A with the intention that each would provide a life interest in the home to the survivor (despite the title showing they jointly owned the property).

There were two contradictory statements in Mr A’s will. One statement was “to pay the residue to my wife should she survive me”, while a second statement was “to divide the residue equally among the children”.

Ms McDonnell acknowledged to the committee that in addition to the property being jointly owned, a mortgage was secured on it. However, that fact was not dealt with in the will. Ms McDonnell also acknowledged that the words “if my wife does not survive me” were omitted by mistake.

In 2015, Ms McDonnell recorded in correspondence that it was necessary to apply to the High Court to have the deceased’s will corrected.

Estate administration-delays and conflict

Mrs A lodged a complaint, which alleged, among other things, that Ms McDonnell had not dealt with the estate of her late husband in a timely or competent manner.

In support of her complaint, Mrs A advised the committee that she had emailed Ms McDonnell on 20 November 2014 requesting that the Deed of Family Arrangement be prepared and to forward a draft for approval. However, a draft Deed of Family Arrangement was not received until 26 February 2015, only after numerous telephone calls and emails chasing it up. A request was made for amendments to the draft deed on 2 November 2015.

“Mrs [A] has still not received the final copy of the Deed of Family Arrangement for herself and her children to sign,” the committee noted.

Although Mr A died on 24 November 2012, at 11 February 2016 “no executor or administrator had yet been appointed to administer the estate and no application for correcting the will has been filed”.

Unsatisfactory conduct

The committee said it considered that the will signed by Mr A was “drafted in an incompetent manner”.

However, the drafting took place before 1 August 2008. The allegations about drafting therefore did not meet the “high threshold” provided under the Law Practitioners Act 1982.

The committee focused on issues arising after 1 August 2008. Ms McDonnell had received confirmation from the High Court Registrar that he refused to grant her probate – as the provision for appointment of an executor was “vague and uncertain”. Following that, the committee said that a competent and diligent lawyer would have undertaken to have the Public Trust or a trust company apply for Letters of Administration, and would have completed a Deed of Family Arrangement to resolve the beneficial interests.

Instead “in conflict with her duty of care to her client” Ms McDonnell spent over three years endeavouring to get herself appointed as executor and, when that failed, trying to get Mrs A appointed.

The committee also noted that there were “extraordinary delays” by Ms McDonnell regarding the Deed of Family Arrangement to address the flaws in the will provisions.

The committee said Ms McDonnell’s handling of the matter “shows incompetence that falls well short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer and is conduct that would reasonably be regarded by lawyers of good standing as being unacceptable”.

It determined unsatisfactory conduct on Ms McDonnell’s part.

As well as the censure and fine, the committee ordered Ms McDonnell to pay compensation of $2000, rectify her errors and omissions relating to her handling of the estate at her own cost, and to pay $1,500 costs. It also directed that Ms McDonnell’s name be published.

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