Will and Estate Practice Provisions in the New Code of Professional Conduct for British Columbia

The Law Society of British Columbia has published a Code of Professional Conduct for British Columbia, which will be effective on January 1, 2013. The new Code replaces the Professional Conduct Handbook.

I have come across a couple of parts that deal specifically with will and estate practices.

The most significant one in my view is in the commentary on joint retainers, that is circumstances where a lawyer acts for more than one client jointly. Many will and estate practitioners will act for both spouses jointly in providing estate planning advice, and drafting wills and trusts. Often both spouses will make wills under which they leave substantial gifts to each other. What should a lawyer do if only one of them later contacts the lawyer who acted for both requesting changes in a will? 

The new Code addresses this in the commentary to rule 3.4-5 dealing with joint retainers. Rule 3.4-5 says:

Joint retainers 

3.4-5 Before a lawyer is retained by more than one client in a matter or transaction, the lawyer must advise each of the clients that:

(a) the lawyer has been asked to act for both or all of them; 

(b) no information received in connection with the matter from one client can be treated as confidential so far as any of the others are concerned; and 

(c) if a conflict develops that cannot be resolved, the lawyer cannot continue to act for both or all of them and may have to withdraw completely.

The Commentary then includes the following paragraphs:

[2] A lawyer who receives instructions from spouses or partners 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 rule 3.4-5. 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, such as 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 3.3-1, the lawyer would be obliged to hold the subsequent communication in strict confidence and not disclose it to the other spouse or partner; and 

(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.

[3] After advising the spouses or partners in the manner described above, the lawyer should obtain their consent to act in accordance with rule 3.4-7.

3.4-7 provides:

3.4-7 When a lawyer has advised the clients as provided under rules 3.4-5 and 3.4-6 and the parties are content that the lawyer act, the lawyer must obtain their consent. 

Commentary
[1] Consent in writing, or a record of the consent in a separate letter to each client is required. Even if all the parties concerned consent, a lawyer should avoid acting for more than one client when it is likely that an issue contentious between them will arise or their interests, rights or obligations will diverge as the matter progresses.

Rules 3.4 -37 through 3.4-39 deal with gifts from clients to their lawyers including gifts in wills.

Testamentary instruments and gifts

3.4-37 A lawyer must not include in a client’s will a clause directing the executor to retain the lawyer’s services in the administration of the client’s estate. 

3.4-38 Unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer must not prepare or cause to be prepared an instrument giving the lawyer or an associate a gift or benefit from the client, including a testamentary gift.

3.4 39 A lawyer must not accept a gift that is more than nominal from a client unless the client has received independent legal advice.

Although for the most part I think this common sense, I am concerned about what the words "gift or benefit” in 3.4-38 may mean. If a lawyer acts as executor, is a clause in the will allowing the executor to charge fees for professional services as well as executor fees a "gift or benefit?" Such a clause is often referred to as a charging clause. If so, then a lawyer is not permitted to draw a will for his or her client under which the lawyer is an executor and the will contains a charging clause. I can see value to requiring a lawyer to refer his or her client to another law firm for independent legal advice before the client signs a will appointing the lawyer as executor, and allowing the lawyer to charge both executor and professional fees. But prohibiting the lawyer from drafting such a will goes too far. The client may have special confidence in the lawyer to draft the will and act as executor. Why should the client be deprived of those services if the lawyer wishes to have a charging clause? Requiring the client to get independent advice should be sufficient to ensure that the client is making an informed and considered decision.