Monday, July 31, 2006

Joint Spousal Estate Planning Retainers

In January, I wrote about some of the ethical issues raised by a lawsuit in Texas in which a jury awarded substantial damages to a husband against the husband's former law firm. The law firm had done estate planning and prepared wills for the husband and his wife. Later the wife's mother instructed the firm to prepare a new will for the wife, leaving the wife's estate to the mother. My post is here.

One of the questions I raised is when, if ever, may a lawyer who has acted jointly for a couple in their estate planning prepare a new will on the instructions of only one of them?

In British Columbia, our law society conduct handbook sets out some very general rules on a lawyers responsibilities when accepting a joint retainer. They are set out in Chapter 6, sections 4 and 5.

In Ontario, the Law Society of Upper Canada has more specific commentary to its Rule 2.04 (6), which contains a helpful analysis of this issue:
A lawyer who receives instructions from spouses or partners as defined in the Substitute Decisions Act, 1992 S.O. 1992 c. 30 to prepare one or more wills for them based on their shared understanding of what is to be in each will should treat the matter as a joint retainer and comply with subrule (6).
Further, at the outset of this joint retainer, the lawyer should advise the spouses or partners that if subsequently only one of them were to communicate new instructions, for example, instructions to change or revoke a will:
(a) the subsequent communication would be treated as a request for a new retainer and not as part of the joint retainer;
(b) in accordance with rule 2.03, the lawyer would be obliged to hold the subsequent communication in strict confidence and not disclose it to the other spouse or partner; but (c) the lawyer would have a duty to decline the new retainer, unless;
(i) the spouses or partners had annulled their marriage, divorced, permanently ended their conjugal relationship, or permanently ended their close personal relationship, as the case may be;
(ii) the other spouse or partner had died; or
(iii) the other spouse or partner was informed of the subsequent communication and agreed to the lawyer acting on the new instructions.
After advising the spouses or partners in the manner described above, the lawyer should obtain their consent to act in accordance with subrule (8).
Ontario's Rule 2 is here.
The issue of joint spousal retainers for estate planning must arise in every jurisdiction. I would be interested in receiving links in my comments to specific commentary in other jurisdictions.

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