Blurred Lines: Analyzing an Attorney’s Duties to a Fiduciary-Client’s Beneficiaries
Blurred Lines: Analyzing an Attorney's Duties to a Fiduciar y-Client's Benefic iaries
Daniel R. Nappier 0 1
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Follow this and additional works at: http://scholarlycommons.law.wlu.edu/wlulr Part of the Ethics and Professional Responsibility Commons Recommended Citation Daniel R. Nappier, Blurred Lines: Analyzing an Attorney's Duties to a Fiduciary-Client's Beneficiaries, 71 Wash. & Lee L. Rev. 2609 (2014), http://scholarlycommons.law.wlu.edu/wlulr/vol71/iss4/11
Blurred Lines: Analyzing an Attorney’s
Duties to a Fiduciary-Client’s
Daniel R. Nappier
I. Introduction ...................................................................2610
Candidate for J.D., Washington and Lee University School of Law, May
2015; B.B.A., Texas A&M University, 2011. I would like to thank my faculty
Note advisor, Professor Brant Hellwig, my student Note advisor, Lara Gass, and
the rest of the Washington and Lee Law Review Editorial Board for their
invaluable guidance in the development of this Note. Finally, thank you to my
family for their love and support in all of my endeavors.
Legal scholarship commonly expresses that attorneys must
provide zealous advocacy and diligent representation to their
clients.1 What happens, however, when an attorney’s client owes
a similar duty to give priority to and protect the interests of third
parties?2 In cases in which an attorney represents a fiduciary, the
attorney must consider what duties, if any, he owes to third-party
beneficiaries.3 The issue of what “special obligations” an attorney
1. See MODEL RULES OF PROF’L CONDUCT R. 1.3 cmt. 1 (2012) (“A lawyer
must also act with commitment and dedication to the interests of the client and
with zeal in advocacy upon the client’s behalf.”).
2. See Robert W. Tuttle, The Fiduciary’s Fiduciary: Legal Ethics in
Fiduciary Representation, 1994 U. ILL. L. REV. 889, 890 (1994) (questioning the
duties owed amongst parties “when the lawyer is not the only fiduciary in the
3. See MODEL RULES OF PROF’L CONDUCT R. 1.2 cmt. 11 (“Where the client
is a fiduciary, the lawyer may be charged with special obligations in dealings
with a beneficiary.”); ABA Special Study Comm. on Prof’l Responsibility, Report
of the Special Study Committee on Professional Responsibility: Counseling the
Fiduciary, 28 REAL PROP. PROB. & TR. J. 825, 827 (1994) (noting that often an
attorney “must consider what duties, if any, he or she may owe to beneficiaries
and others”); Tuttle, supra note 2, at 889 (“Although the attorney’s fiduciary
duty of loyalty to the client is well established in the law, a gap exists when that
client is a fiduciary of a third party.”).
may owe beneficiaries arises most commonly when an attorney
represents a trustee or personal representative of an estate,
which is the focus of this Note.4
It is imperative that an attorney hired to represent a trustee
or estate representative understand whom he represents and to
whom he owes duties.5 This is often unclear because of the
various individuals involved in handling trust and estate
matters, each having distinct interests.6 Fiduciaries’ attorneys
should beware of the potential liability that exists if they fail to
exercise care and loyalty towards beneficiaries’ interests.7
Current authorities acknowledge that confusion riddles this
subject.8 The Model Rules of Professional Responsibility comment
that “in estate administration the identity of the client may be
unclear under the law of a particular jurisdiction.”9 Rules of
professional responsibility and existing case law can be
contradictory.10 In describing the relationship between an
4. See Kennedy Lee, Representing the Fiduciary: To Whom Does the
Attorney Owe Duties?, 37 ACTEC L.J. 469, 469 (2011) (explaining that these
issues, arising in the context of “a trustee or personal representative, are likely
the most common”).
5. See Todd A. Fuller, Attorney Liability to Estate Beneficiaries: The
Privity Passes Through, 100 DICK. L. REV. 29, 29 (1995) (noting that the issue is
complex because “traditional notions of liability do not easily apply to the
relationship between an estate attorney and beneficiaries of the estate”).
6. See Eric. D. Correira, Establishing and Protecting the Attorney–Client
Relationship in Trust Matters, 61 R.I. BAR J. 9, 9 (2012) (“Many times, the lines
of client representation are blurred because the various individuals/entities
involved, each with distinct legal interests, appear (at least for the moment) to
be coexisting in harmony.”).
7. See Robert S. Held, A Trust Counsel’s Duty to Beneficiaries, 92 ILL. B.J.
636, 636 (2004) (emphasizing that a fiduciary’s attorney “should beware the
potential for liability if they fail to act with due care to protect beneficiaries’
8. See MODEL RULES OF PROF’L CONDUCT R. 1.7 cmt. 27 (2012) (“Under one
view, the client is the fiduciary; under another view the client is the estate or
trust, including its beneficiaries.”); ABA Special Study Comm. on Prof’l
Responsibility, supra note 3, at 828 (“[S]ome courts and commentators have
suggested that the lawyer for the fiduciary may owe some derivative duties to
the beneficiaries served by that fiduciary.”).
MODEL RULES OF PROF’L CONDUCT R. 1.7 cmt. 27.
10. See Correira, supra note 6, at 9 (“There is no set guidance for the trust
attorney to follow, instead he or she must rely on the applicable Rules of
Professional Responsibility and relevant case law, which, in a given
circumstance, can be either vague or contradictory.”).
attorney and beneficiaries, courts and ethics committees
sometimes create uncertainty over whether and to what extent
an attorney owes any duty to beneficiaries.11 In jurisdictions
recognizing that an attorney owes fiduciary duties to
beneficiaries, it is not clear if the duties differ from those the
attorney owes the client.12 When hiring an attorney, is the
fiduciary also an agent contracting on behalf of the beneficiaries?
Alternatively, are the fiduciary and beneficiaries joint-clients of
the attorney? The current confusion surrounding this issue can
result in an attorney’s misunderstanding of to whom he owes
duties, which may create potential liability.13
Legal authority in this setting is scant. The authority that
exists tends to focus on fee disputes, evidentiary privileges, and
malpractice issues raising the question of whether beneficiaries
have the right to sue an attorney.14 This Note will focus on the
latter issue of whether beneficiaries have the right to bring
claims against the fiduciary’s attorney for breach of fiduciary
duty or professional negligence. This Note analyzes the issue
assuming that the attorney and fiduciary have not entered into
an agreement regarding an attorney’s duties to beneficiaries.15
Part II of this Note examines the scope of duties an attorney
owes a client. It distinguishes an attorney’s duty of care and
11. See Jeffrey N. Pennell, Representations Involving Fiduciary Entities:
Who Is the Client?, 62 FORDHAM L. REV. 1319, 1325 (1994) (discussing how
“ethics committees describe the relationship with the fiduciary, . . . the
beneficiaries, and . . . the entity itself differs rather dramatically, generating
uncertainty and confusion that prevents any real understanding of the
attorney’s role . . . [where] the identity of the client is relevant”).
12. See id. at 1322 (explaining that, in cases determining an attorney owes
fiduciary duties to beneficiaries, “it is not clear whether fiduciary duties to the
fiduciary that run to the beneficiaries differ from fiduciary duties to the
beneficiaries directly”); Held, supra note 7, at 636 (“The case law in this area is
uneven and unsettled.”).
13. See Correira, supra note 6, at 9 (emphasizing that the
misunderstanding surrounding this issue, “if acted upon, can result in potential
14. See Pennell, supra note 11, at 1321 (highlighting the typical issues the
reported cases involve, such as “fee disputes, evidentiary privileges, and legal
15. See MODEL RULES OF PROF’L CONDUCT R. 1.2 (suggesting that an
attorney may enter an agreement with all the parties to represent the fiduciary
and the beneficiaries); Tuttle, supra note 2, at 891 (“The law must supply a
default rule in the absence of a specific agreement between the parties.”).
fiduciary duties, and addresses the blurred distinctions between
these duties. Part III of this Note explores state court decisions
and other authorities determining that an attorney owes some
duties to a fiduciary-client’s beneficiaries. Part IV introduces the
traditional approach, under which courts have held that an
attorney owes no duties to any beneficiary of the fiduciary-client.
Part V highlights the advantages and disadvantages of both
approaches. It explores the questions raised if an attorney owes
duties to the fiduciary-client’s beneficiaries: What happens if the
fiduciary and beneficiaries’ interests become adverse? If an
attorney does not owe any special duty to beneficiaries, what
protections exist for beneficiaries upon breach of the
fiduciaryclient’s duties? Part VI recommends that the traditional approach
is the best resolution to this issue. It explains that the traditional
approach has greater advantages than the other approaches
(discussed in Part IV) and addresses perceived disadvantages.
Part VII concludes this Note and summarizes the
recommendation and rationale supporting it.
II. The Range of Duties and Liability Exposure
Identifying what duties a trustee’s or estate representative’s
attorney owes to beneficiaries can easily confuse the fiduciary
duties that the fiduciary-client owes to beneficiaries with the
professional duties an attorney owes to a client. A separate
explanation of these duties and the range of liabilities a breach of
these duties imposes gives context to the different approaches
adopted by various jurisdictions.
A. Attorney’s Liability Exposure to Fiduciary-Client
The creation of an attorney–client relationship imputes the
attorney with an extensive list of duties owed to the client by
virtue of this professional relationship.16 Specifically, an attorney
16. See MODEL RULES OF PROF’L CONDUCT R. 1.3–1.4, 1.6 (2012) (explaining
an attorney’s duty to act with diligence, to communicate with the client, and to
keep the client’s confidences); RESTATEMENT (THIRD) OF THE LAW GOVERNING
LAWYERS § 16 (
) (listing duties an attorney owes the client “consistent with
the lawyer’s other legal duties and subject to other provisions of [the]
has a duty to represent clients in a manner “reasonably
calculated to advance a client’s lawful objectives.”17 An attorney
must also act with reasonable competence and diligence,18
reasonably communicate with clients about the status of a
matter, and fulfill reasonable requests for information.19 An
attorney must fulfill any contractual obligations to the client as
well.20 Differing methods exist to enforce these duties, such as
disciplinary proceedings as well as client suits against the
attorney for damages, restitution, injunction, or other judicial
1. Attorney’s Duty of Care and Professional Negligence
In representing clients, attorneys owe a broad duty to
exercise reasonable care in representing and pursuing the client’s
lawful interests, which captures many of the duties listed above.22
Under the duty of care concept, an attorney must exercise the
competence and diligence normally exercised by attorneys in the
same or similar circumstances.23 Attorneys owe a duty of care in
pursuing the client’s objectives and in carrying out the fiduciary
duties owed to the client.24 An attorney’s duty of care creates the
potential liability for professional negligence.25 Thus, if an
attorney fails to fulfill any of the duties listed above, there may
be a breach of the duty of care, and the attorney may be subject to
claims of professional negligence brought by the client.26
An attorney is subject to liability for professional negligence
if a party—client or nonclient—can prove that an attorney
breached a duty of care owed to that party, and the breach caused
the claimant injury.27 The cause of action for legal malpractice
based on professional negligence discourages a lawyer’s improper
conduct or inaction and compensates plaintiffs for injury caused
by such negligence.28 If a plaintiff can prove that an attorney did
not exercise the competence and diligence that a reasonable
attorney under similar circumstances would have exercised, the
plaintiff may recover compensatory damages.29 Courts may also
grant other remedies such as rescission, injunctions, declaratory
relief, or restitution.30
2. Attorneys’ Fiduciary Duties to Clients
An attorney is a fiduciary, which means the attorney is
someone to whom another person entrusts with his affairs under
circumstances that may make it difficult or unfavorable for that
other person to closely oversee the attorney’s performance.31 The
nature of this relationship provides a client with another cause of
25. See id. § 48 (outlining the elements of professional negligence,
beginning with attorney’s potential liability to those whom a duty of care is
26. See id. (noting that an attorney is civilly liable “for professional
negligence to a person to whom the lawyer owes a duty of care”).
27. See id. (explaining a negligence standard of professional misconduct
requiring a duty of care, breached by the attorney, which is the legal cause of
the claimant’s injury). A claim of professional negligence is a form of legal
malpractice, and the terms are often used synonymously. See id. § 48 cmt. a
(emphasizing the similar nature of the terms “professional negligence” and
28. See id. § 48 cmt. b (discussing how professional negligence and
malpractice applies to attorneys).
29. See id. (discussing plaintiff’s burden of proof).
30. See id. (noting courts’ powers to supply various remedies).
31. See id. § 16 cmt. b (explaining the attorney’s role as a fiduciary).
action to recover damages—a claim of breach of fiduciary duty.32
Although specific definitions of fiduciary duties vary depending
on the context,33 the Restatement (Third) of the Law Governing
Lawyers explains that an attorney must “comply with obligations
concerning the client’s confidences and property, avoid
impermissible conflicting interests, deal honestly with the client,
and not employ advantages arising from the client–lawyer
relationship in a manner adverse to the client.”34 Under the
Restatement, if an attorney breaches these duties causing injury
to the client, the attorney is liable for breach of fiduciary duty.35
Through a breach of fiduciary duty claim, clients may seek either
damages or other remedies.36
32. See id. § 49 cmt. b (commenting that “[a] lawyer owes a client the
fiduciary duties specified in § 16(3)”).
33. See 2 TAMAR FRANKEL, THE NEW PALGRAVE DICTIONARY OF ECONOMICS
AND THE LAW 127–28 (Peter Newman ed. 1998) (acknowledging the many
contexts in which fiduciary relationships are created). Most American
jurisdictions have included at least two fiduciary duties: the duty of undivided
loyalty and the duty of confidence. 2 LEGAL MALPRACTICE § 15:1 (2013). “The
attorney is under a duty to represent the client with undivided loyalty, to
preserve the client’s confidences and to disclose any material matters infringing
upon these obligations.” Id. Fiduciary duties describe the trust, loyalty, and
confidence that one party owes to another in many contexts. FRANKEL, supra, at
127. Although specific definitions may vary, the significance of fiduciary duties
in the various fiduciary relationships cannot be understated. Id. In an
oftencited and widely recognized partnership law case, Judge Benjamin Cardozo
expresses this importance:
Joint adventurers, like copartners, owe to one another, while the
enterprise continues, the duty of the finest loyalty. Many forms of
conduct permissible in a workaday world for those acting at arm’s
length, are forbidden to those bound by fiduciary ties. A trustee is
held to something stricter than the morals of the market place. Not
honesty alone, but the punctilio of an honor the most sensitive, is then
the standard of behavior. As to this there has developed a tradition
that is unbending and inveterate. Uncompromising rigidity has been
the attitude of courts of equity when petitioned to undermine the rule
of undivided loyalty by the ‘disintegrating erosion’ of particular
exceptions. Only thus has the level of conduct for fiduciaries been
kept at a level higher than that trodden by the crowd.
Meinhard v. Salmon, 164 N.E. 545, 546 (N.Y. 1928) (citations omitted).
RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 16(3) (
36. See id. § 49 cmt. d (emphasizing that an attorney who “has acted with
reasonable care is not liable in damages for breach of fiduciary duty, but other
remedies such as disqualification, restitution, and injunctive or declaratory
See id. § 49 (giving the elements for a breach of fiduciary duty cause of
3. Blurred Distinctions Between the Duty of Care and Fiduciary
An attorney’s professional duty of care and fiduciary duties
often overlap. For example, an attorney may fail to exercise the
competence and diligence ordinarily exercised by other attorneys
in like circumstances—a breach of the duty of care—by failing to
reasonably inform and communicate with the client—a breach of
fiduciary duty.37 When an attorney’s competence and diligence
are important to carrying out the fiduciary duty in question, the
duty of care standard applies.38 Thus, one can reasonably classify
many claims against an attorney as professional negligence
(breach of the duty of care) or a breach of fiduciary duty.39
Similarly, legal authorities often classify the duty of care as a
fiduciary duty owed to clients.40 Therefore, claimants usually add
a breach of fiduciary duty claim to a negligence claim for “rhetoric
or completeness.”41 Classifying a claim as a breach of fiduciary
duty may affect the applicable limitations period, depending on
the language and policies of a jurisdiction’s statute of
limitations.42 Regardless of whether a claim is styled as
professional negligence or breach of fiduciary duty, the client may
relief may be available”).
37. See id. § 20 (explaining an attorney’s duty to keep the client reasonably
informed and to consult with the client); id. § 49 cmt. b (listing an attorney’s
fiduciary duties to clients as including those duties addressed in § 20).
38. See id. § 49 cmt. d (“When the fiduciary duty in question is that of
competence or diligence or of proceeding in a manner reasonably calculated to
advance the client's lawful objectives, the standard of § 52(1) . . . controls.”); id.
§ 52 (defining the standard of care for purposes of civil liability for professional
39. See id. § 49 cmt. c (explaining a variety of claims that are characterized
as professional negligence or misconduct); id. § 49 cmt. d (noting that the
standard of care used in a professional negligence action is sometimes used as
the standard for a breach of fiduciary duty claim).
40. See id. (clarifying that “the duty of care enforced in a negligence action
is also a fiduciary duty” under § 16(2)); see also id. § 16(2) (including in its
description of duties owed to clients a duty to exercise the diligence and
competence of a reasonable attorney in like circumstances).
41. Id. § 49 cmt. c.
42. See id. (offering a reason for why classifying a claim as a breach of
fiduciary duty may make a difference to the outcome of the action).
be entitled to a damages award, which is ultimately what
injured plaintiffs desire.43
Separate from an attorney’s duties to a client are any duties
a client may owe to third parties. When the client is a fiduciary,
the client owes fiduciary duties wholly distinct from those
fiduciary duties an attorney owes a client. Such duties are
B. Fiduciary-Client’s Liability Exposure to Beneficiaries
Article 8 of the Uniform Trust Code outlines the duties a
trustee owes to beneficiaries of the trust.44 A breach of trust
occurs when a trustee fails to comply with any of these duties
owed to beneficiaries.45 A breach of trust is synonymous with a
breach of fiduciary duty because both arise upon a trustee’s
failure to exercise duties owed to the trust beneficiaries.46 In
fact, the Restatement (Third) of Trusts describes any duty a
trustee owes, as trustee, to the beneficiaries as a trustee’s
fiduciary duties.47 A breach of fiduciary duty may occur by a
43. See id. § 49 cmt. d (noting under what circumstances an attorney may
be liable for damages to the client in a breach of fiduciary duty action); id. § 48
cmt. a (explaining that plaintiffs in a professional negligence action may seek
44. See UNIFORM TRUST CODE ART. 8 (2010) (outlining the general duties
and powers of trustees).
45. See id. § 1001 (defining breach of trust and discussing remedies
available for a breach of trust); RESTATEMENT (THIRD) OF TRUSTS § 93 (2002) (“A
breach of trust is a failure by the trustee to comply with any duty that the
trustee owes, as trustee, to the beneficiaries, or to further the charitable
purpose, of the trust.”).
46. See RESTATEMENT (THIRD) OF TRUSTS § 93 cmt. b (2002) (describing a
breach of trust as a failure to exercise any of the trustee's fiduciary duties). This
Note refers to a breach of trust as a breach of fiduciary duty because in cases
where beneficiaries sue the trustee, the claim is usually styled as a breach of
fiduciary duty. See, e.g., Goldberg v. Frye, 217 Cal. App. 3d 1258, 1263 (1990)
(describing the legatee-plaintiff’s claims against the trustee (and his attorney)
as, among other things, breach of fiduciary duty for acting imprudently in
negotiating on behalf of the trust); Spinner v. Nutt, 417 Mass. 549, 552 (1994)
(explaining plaintiff-beneficiaries’ claim that the trustee breached his fiduciary
47. See RESTATEMENT (THIRD) OF TRUSTS § 93 cmt. b (2003) (explaining
fiduciary duties to be any duty owed, as trustee, to beneficiaries or to further the
trustee’s action, inaction, intentional conduct, or negligent
Perhaps the most important obligation of a trustee is the
duty of loyalty.49 This duty prevents a trustee from putting the
interests of others above the interests of the beneficiaries.50 The
duty of loyalty also prevents a trustee from engaging in conduct
that creates a conflict between the trustee’s personal and
fiduciary interests.51 An extension of a trustee’s duty of loyalty is
the duty of impartiality.52 The duty of impartiality requires a
trustee, when representing multiple beneficiaries, to act
impartially in investing, managing, and distributing trust
property while keeping in mind the beneficiaries’ respective
interests.53 Trustees also have a duty to administer the trust “in
good faith” and in accordance with its terms, the beneficiaries’
interests, and applicable law.54 Additionally, a trustee has a duty
to administer the trust as a prudent person would in light of the
48. See id. (detailing the various situations in which a trustee may breach
49. See UNIFORM TRUST CODE § 802 cmt. (2010) (explaining the trustee’s
duty of loyalty as “perhaps the most fundamental duty of the trustee”).
50. See id. (“A trustee shall administer the trust solely in the interests of
the beneficiaries.”); RESTATEMENT (THIRD) OF TRUSTS § 78(1) (2003) (“[A] trustee
has a duty to administer the trust solely in the interests of the beneficiaries, or
solely in furtherance of its charitable purposes.”).
51. See UNIFORM TRUST CODE § 802(b)–(c) (2010) (establishing that certain
trustee’s transactions are presumed to create a conflict of personal and fiduciary
interests and any such transaction that creates a conflict of interests is voidable
by affected beneficiaries); RESTATEMENT (THIRD) OF TRUSTS § 78(2) (2003) (noting
that the “trustee is strictly prohibited from engaging in transactions that
involve self-dealing or otherwise involve or create a conflict between the
trustee’s fiduciary duties and personal interests”).
52. See RESTATEMENT (THIRD) OF TRUSTS § 79 cmt. b (2003) (describing the
duty of impartiality as an “extension of the duty of loyalty to beneficiaries” but
involving unavoidable and thus permissible conflicting duties to beneficiaries
with their competing interests).
53. See UNIFORM TRUST CODE § 803 (2010) (“If a trust has two or more
beneficiaries, the trustee shall act impartially in investing, managing, and
distributing the trust property, giving due regard to the beneficiaries respective
interests.”); RESTATEMENT (THIRD) OF TRUSTS § 79 (2003) (requiring a trustee to
act impartially while managing a trust on behalf of multiple beneficiaries).
54. UNIFORM TRUST CODE § 801; see also RESTATEMENT (THIRD) OF TRUSTS
§ 76(1)–(2) (2003) (listing the trustee’s responsibilities in administering the
circumstances.55 This essentially applies the duty of care
standard56 to a trustee in managing and administering the
trust.57 This is another example of the common conflation of
fiduciary duty and the duty of care.58 A trustee’s other duties
include the duty to take control of the trust property,59 the duty of
recordkeeping,60 the duty to enforce claims of the trust,61 and the
duty to inform and report.62 Acting or failing to act in a manner
that does not conform to these duties exposes a trustee to liability
for breach of fiduciary duty (or breach of trust), which may be
remedied by monetary damages.63
55. See UNIFORM TRUST CODE § 804 (2010) (explaining a trustee’s duty of
prudence in administering the trust); see also RESTATEMENT (THIRD) OF TRUSTS
§ 77 (2003) (describing a trustee’s duty of prudence).
Supra Part II.A.1.
57. See RESTATEMENT (THIRD) OF TRUSTS § 77 cmt. b (2003) (explaining that
the duty of prudence involves the duty to exercise reasonable care in managing
and administering the trust).
58. See id. § 77 cmt. a (acknowledging that the duty of prudence requires
the exercise of reasonable care while carrying out other fiduciary obligations).
Therefore, a breach of the duty of prudence (or duty of care) can lead to a claim
of breach of fiduciary duty. Id.
59. See UNIFORM TRUST CODE § 809 (2010) (“A trustee shall take reasonable
steps to take control of and protect the trust property.”).
60. See id. § 810 (noting that, among other things, a trustee must “keep
adequate records of the administration of the trust” and “keep trust property
separate from the trustee’s own property”); RESTATEMENT (THIRD) OF TRUSTS § 83
(2003) (explaining a trustee’s duty to “maintain clear, complete, and accurate
books and records regarding the trust property and the administration of the
61. See UNIFORM TRUST CODE § 811 (2010) (“A trustee shall take reasonable
steps to enforce claims of the trust and to defend claims against the trust.”).
62. See id. § 813 (describing the situations in which a trustee must keep
certain beneficiaries reasonably informed about the administration of the trust,
and “[u]nless unreasonable under the circumstances,” must furnish certain
information upon request to beneficiaries); RESTATEMENT (THIRD) OF TRUSTS § 82
(2003) (explaining the “duty to furnish information to beneficiaries”).
63. See UNIFORM TRUST CODE § 1001 (2010) (explaining that when a trustee
violates a duty owed to beneficiaries, a breach of trust occurs, and among other
things, may be remedied by compelling the trustee to pay money or restore
property); RESTATEMENT (THIRD) OF TRUSTS § 100 (2003) (explaining that a
trustee who commits a breach of fiduciary duty is chargeable with the amount
required to restore the value to the trust or with the amount of any benefit
derived by the trustee as a result of the breach).
III. One Approach: Attorney Owes Some Form of Duty to
Determining what duty, if any, an attorney owes to the
beneficiaries of a trust or estate necessitates an analysis of case
decisions. Many of these cases have concluded that a fiduciary’s
attorney does owe duties to beneficiaries.64 An attorney must
grapple with these decisions before accepting representation of a
trustee or estate representative to assess the range of possible
liabilities to which the attorney may be exposed.65
A. Imposition on Attorneys of Duties Owed to Clients’ Beneficiaries
Some courts have imposed duties on a fiduciary’s attorney,
which subjects the attorney to liability for breach of fiduciary
duty, legal malpractice, or both. Attorneys for both trustees and
estate representatives have frequently been subjected to such
One example of a court levying on an attorney a duty of care
to beneficiaries is American Kennel Club Museum of the Dog v.
Edwards & Angell, LLP.67 In American Kennel Club, the Superior
Court of Rhode Island found that a trustee’s attorney owed a duty
of care to the trust beneficiaries.68 In 1976, Camilla Lyman
established and funded the Camilla Lyman Unitrust (Unitrust) to
provide annual distributions to herself during her lifetime.69 She
64. See infra note 100 and accompanying text (listing cases from various
jurisdictions that have determined a fiduciary’s attorney owes a duty to
65. See Lee, supra note 4, at 469 (explaining that courts have not been
uniform in opinions, offering little clarity or guidance on to whom the attorney
owes duties when the client acts in a fiduciary capacity).
66. See infra note 100 and accompanying text (listing cases that have
imposed duties on attorneys for trustees and estate representatives owed to
67. See Am. Kennel Club Museum of the Dog v. Edwards & Angell, LLP,
No. Civ.A. PB 00-2683, 2002 WL 1803923, at *9 (R.I. Super. Ct. July 26, 2002)
(concluding that the Dog Museum, as the “ultimate beneficiary of the Lyman
trust,” had standing to bring claims for breach of fiduciary duty and legal
69. Id. at *1.
named the Dog Museum of America as the sole remainder
beneficiary of the Unitrust on her death.70 The defendants,
Edwards & Angell, LLP, and James Barnett, Esq., facilitated the
appointment of Robert A. Ragosta and George T. O’Neil as
Several months after Lyman established the Unitrust, she
disappeared.72 This case arose from Ragosta and O’Neil’s
management of the trust after Lyman’s disappearance.73 Ragosta
and O’Neil undertook several transactions to preserve Lyman’s
assets, including the Unitrust, after her disappearance in case
she returned.74 While conducting these transactions, many of
which generated losses to the Unitrust, they consulted the
In 2000, the Dog Museum and Ragosta filed an action
against the defendants for breach of fiduciary duty and legal
malpractice.76 The defendants filed a motion for summary
judgment and advanced a number of arguments.77 Significantly,
they argued that the court should adopt the rule followed in
many jurisdictions that “the attorney of a trustee owes no duty of
care to the beneficiaries.”78 The defendants contended that
establishing a duty of care between the trustee’s attorney and the
beneficiary exposes the attorney to possible or actual conflicts of
72. Id. Strangely, Lyman was discovered some ten years later in the septic
system of her home. Id.
73. See id. at *4 (noting that the Dog Museum brought claims for breach of
fiduciary duties and legal malpractice).
74. Id. Seeking to preserve Lyman’s assets, Ragosta and O’Neil defended a
lawsuit against Massachusetts Trustees that eventually settled, transferred
Lyman’s Hopkinton property into the Unitrust to generate income, used
Unitrust assets to pay IRS deficiencies and liens, opposed an action by the
Lyman family to have Lyman’s date of death declared as of July 20, 1987, and
sold Lyman’s Hopkinton property with proceeds to go into the Unitrust. See id.
(describing actions taken by Ragosta and O’Neil to preserve Lyman’s assets and
the results of the transactions).
77. See id. at *7 (listing the defendant’s arguments against owing duties to
beneficiaries, including the existence of “inherent conflicts of interest that
prohibit the recognition of a duty of care”).
78. Id. (citing Spinner v. Nutt, 631 N.E.2d 542, 544–45 (Mass. 1994)).
interest.79 The defendants claimed that the co-trustees had an
interest in continuing distributions from the Unitrust and using
those distributions to maintain Lyman’s property despite her
disappearance.80 The conflicting interest was that of the Dog
Museum in ceasing distributions to Lyman to make distributions
to it as the sole remainderman beneficiary of the Unitrust.81
After considering and rejecting cases from other
jurisdictions82 that determined “only the trustee, not the trust
beneficiary, is the client of the attorney,”83 the Superior Court of
Rhode Island determined that “a trustee’s attorney owes a duty of
care to the trust beneficiaries.”84 Therefore, “the Dog Museum, as
the ultimate beneficiary of the Lyman trust, ha[d] standing to
bring suit against Defendants for legal malpractice and breach of
fiduciary duty.”85 Importantly, the court acknowledged that the
duty of care imposed on a trustee’s attorney gave standing to a
trust beneficiary to claim breach of fiduciary duty even though
the court did not explicitly impose the full spectrum of fiduciary
duties on the trustee’s attorney.86
The American Kennel Club court analyzed several cases in
which courts have similarly imposed duties on a fiduciary’s
attorney owed to beneficiaries. One such case was Charleson v.
Hardesty,87 in which attorney James Hardesty had prepared a
trust agreement for Adele Kate Trelease.88 The trust listed Ms.
Trelease’s son and grandson as the main beneficiaries and
Abraham Lichowsky as successor trustee on Ms. Trelease’s
death.89 This case, brought by Susan Charleson as guardian ad
litem for beneficiary Richard Lee Trelease, Ms. Trelease’s
grandson, arose out of actions taken by Lichowsky and Hardesty
after Ms. Trelease’s death.90 According to the plaintiffs,
Lichowsky, as trustee, took actions that were detrimental to the
trust and clear breaches of his fiduciary duties.91 Among other
things, plaintiffs asserted that Hardesty negligently failed to
advise Lichowsky of his fiduciary duties as trustee and that
Hardesty negligently drafted the trust instrument, which allowed
Lichowsky to make unsecured loans.92 Plaintiffs also claimed that
Hardesty negligently failed to provide proper legal advice to Ms.
Trelease to preserve her funds.93
Richard Robert Trelease, Ms. Trelease’s son and beneficiary
of the trust, and Charleson filed a complaint against Hardesty
alleging, among other things, that Hardesty owed them “fiduciary
and professional duties and that he had breached these duties.”94
On appeal from a district court judgment granting Hardesty’s
motion for summary judgment, the Treleases again asserted that
Hardesty, as attorney for the trustee, owed them a duty to protect
88. Id. at 1304.
90. See id. at 1305 (addressing actions taken by Lichowsky and Hardesty).
91. Id. According to the Treleases and Charleson, Lichowsky “sold the
Nevada trust property and transferred the funds to Southern California.” Id. at
1304. He then withdrew all of the trust funds for personal use without
rendering an accounting of the trust assets to the Treleases. Id. Lichowsky
promised to send an accounting of the trust property as directed by Hardesty
but never sent it. Id. at 1305. Lichowsky later informed Hardesty that most of
the trust assets had been removed from Nevada and invested in a Malibu ranch,
the details of which were requested by Hardesty and not delivered to him. Id.
Hardesty later discovered that Lichowsky had been writing bad checks. Id.
Furthermore, Lichowsky admitted writing checks to himself from the trust. Id.
Lichowsky filed for bankruptcy when no assets remained in the trust, which
prompted Charleson’s claim against Hardesty. Id.
92. See id. (outlining plaintiffs’ complaints against Hardesty).
93. See id. (alleging that “Hardesty negligently failed to furnish Ms.
Trelease with proper legal advice so that her funds would be preserved”).
their interests.95 The Supreme Court of Nevada determined that
“when an attorney represents a trustee in his or her capacity as
trustee, that attorney assumes a duty of care and fiduciary duties
toward the beneficiaries as a matter of law.”96 The court
remanded the case after finding questions of material fact
regarding whether Hardesty represented Lichowsky as trustee
and whether Hardesty breached his duties to the beneficiaries if
he did represent Lichowsky.97
The courts in American Kennel Club and Charleson relied on
the rationale from a California court in Morales v. Field,98 which
in all matters connected with [the] trust a trustee is bound to
act in the highest good faith toward all beneficiaries, and may
not obtain any advantage over the latter by the slightest
misrepresentation, concealment, threat, or adverse pressure of
any kind . . . . An attorney who acts as counsel for a trustee
provides advice and guidance as to how that trustee may and
must act to fulfill his [or her] obligations to all beneficiaries. It
follows that when an attorney undertakes a relationship as
adviser to a trustee, he in reality also assumes a relationship
with the beneficiary akin to that between trustee and
Many other courts have also determined that a fiduciary’s
attorney owes some form of duty to beneficiaries.100 The Delaware
95. See id. at 1306 (stating that the Treleases asserted the district court
erred in granting summary judgment to Hardesty because Hardesty “owed them
a duty to protect their interests”).
96. Id. at 1306–07 (emphasis added).
See id. at 1308 (explaining the court’s final conclusions).
160 Cal. Rptr. 239 (Cal. Ct. App. 1979).
99. Id. at 244 (emphasis added). Later California courts have distinguished
Morales by the fact that the attorneys made direct representations of care to
beneficiaries or have simply held that “a fiduciary’s attorney does not owe duties
to the fiduciary’s beneficiaries.” See ALAN NEWMAN, GEORGE GLEASON BOGERT,
GEORGE TAYLOR BOGERT & AMY MORRIS HESS, THE LAW OF TRUSTS AND TRUSTEES
§ 962 (3d ed. 2010) (citing Johnson v. Super. Ct., 45 Cal. Rptr. 2d 312, 317 (Cal.
Ct. App. 1995); Goldberg v. Frye, 266 Cal. Rptr. 483 (Cal. Ct. App.1990); Lasky,
Haas, Cohler & Munter v. Super. Ct., 218 Cal. Rptr. 205 (Cal. Ct. App. 1985)).
100. See, e.g., Schick v. Bach, 238 Cal. Rptr. 902, 908 (Cal. Ct. App. 1987)
(“Similarly, an attorney representing a trustee also assumes a duty of care
toward the beneficiaries.”); Riggs Nat’l Bank v. Zimmer, 355 A.2d 709, 713–14
(Del. Ch. 1976) (stating that because fiduciary obligations were owed by
attorney for trustee to beneficiaries, effectively “the beneficiaries were the
Chancery Court notably stated in Riggs National Bank v.
Zimmer101 that the trustee, as a representative for the
beneficiaries of the trust he administers, “is not the real client in
the sense that [h]e is personally being served . . . . In effect, the
beneficiaries were the clients . . . as much as the trustees were,
and perhaps more so.”102 The Restatement (Third) of the Law
Governing Lawyers agrees with these courts that an attorney
owes a duty of care to nonclients and is therefore liable for
professional negligence if the attorney’s client is an executor,
trustee, guardian, or fiduciary acting principally to perform
similar functions for the nonclients.103
clients [of the attorney] as much as the trustees were, and perhaps more so”);
Gagliardo v. Caffrey, 800 N.E.2d 489, 496–97 (Ill. App. Ct. 2003) (describing
situations under Illinois law in which an attorney may owe a duty of care to a
third party such as a beneficiary of an estate); In re Halas, 512 N.E.2d 1276,
1280 (Ill. App. Ct. 1987) (finding that counsel for the executor “breached its own
separate fiduciary duty to the beneficiaries”); Elam v. Hyatt Legal Servs., 541
N.E.2d 616, 618 (Ohio 1989) (determining that beneficiaries with vested interest
in an estate are in privity—by way of a “pass through privity” theory—with
executor of estate, and attorney for executor may be liable in negligence to such
For more cases determining that attorneys owe a duty to their
fiduciaryclients’ beneficiaries, see NEWMAN, BOGERT, BOGERT & HESS, supra note 99,
§ 962 n.103 (citing In re Estate of Shano, 869 P.2d 1203 (Ariz. Ct. App. 1993);
Schmitz v. Crotty, 528 N.W.2d 112 (Iowa 1995); Jenkins v. Wheeler, 316 S.E.2d
354 (N.C. Ct. App. 1984); Leyba v. Whitley, 907 P.2d 172 (N.M. 1995); In re
Clarkes Estate, 188 N.E.2d 128 (N.Y. 1962); In re Guardianship of Karan, 38
P.3d 396 (Wash. Ct. App. 2002)).
101. 355 A.2d 709 (Del. Ch. 1976).
102. Id. at 713–14; see also Del. State Bar Ass’n Comm. on Prof’l Ethics, Op.
1989-4, 8 (1989) (acknowledging that an attorney’s duties to the beneficiaries of
an estate do “appear to exist” but do not rise to the level of implicating an
attorney’s duty of loyalty).
103. See RESTATEMENT (THIRD) THE LAW GOVERNING LAWYERS § 51 (
(detailing circumstances under which an attorney owes a duty of care to
nonclients for purposes of liability for professional negligence). The duty of care
an attorney owes to nonclients when the client is a trustee, executor, guardian,
or fiduciary is limited in several respects. Id. § 51 cmt. h. The duty of care
should be recognized only when action by the lawyer would not violate
applicable professional rules and the attorney’s client is one of the specified
types of fiduciaries. Id. An attorney who only represents the fiduciary may avoid
liability to beneficiaries as clients by making clear to beneficiaries that the
attorney represents the fiduciary only and not the beneficiaries. Id. Liability for
professional negligence under the attorney’s duty of care to
nonclient-beneficiaries arises when the lawyer “knows that appropriate action
by the lawyer is necessary to prevent or mitigate a breach of the client’s
Additionally, the American College of Trust and Estate
Counsel’s (ACTEC) commentaries on Model Rule of Professional
Conduct 1.2 explain that an attorney representing the fiduciary
in its fiduciary capacity owes some duties to beneficiaries despite
the fact that an attorney does not represent them.104 ACTEC
describes these duties as “largely restrictive in nature,” although
it also notes that a fiduciary’s attorney may at times be obligated
to take affirmative action to protect the beneficiary’s interests.105
ACTEC appears to recognize more duties than the ABA Model
Rules or the Restatement (Third) of the Law Governing
Lawyers.106 An example of this difference is ACTEC’s
acknowledgement that some jurisdictions consider beneficiaries
secondary or derivative clients of the fiduciary’s attorney.107
fiduciary duty.” Id. The stated duty applies only to breaches of fiduciary duty
constituting crime or fraud, or to breaches in which the attorney knowingly is
assisting or has assisted in perpetrating a crime or fraud. Id. Liability is not
imposed when an attorney is subsequently consulted by a fiduciary to deal with
the effects of a past breach committed before the consultation began, nor is an
attorney in such a situation under a duty to inform beneficiaries of the breach or
to attempt to rectify it. Id. Liability does not exist when nonclient-beneficiaries
can reasonably protect their own rights. Id. Thus, no liability exists when a
beneficiary of a family voting trust who is in business and has access to the
relevant information has no need of protection by the trustee’s attorney. Id. An
attorney is not subject to liability to beneficiaries for failing to act in a manner
the attorney reasonably believes would violate the professional rules, which may
depend on the relevant jurisdiction’s rules. Id. Finally, “[a]n attorney owes no
duty to a beneficiary if recognizing such duty would create conflicting or
inconsistent duties that might significantly impair the lawyer’s performance of
obligations to the lawyer’s client in the circumstances of the representation.” Id.
Similarly an attorney is not liable to a beneficiary for representing the fiduciary
in a dispute or negotiation with the beneficiary regarding any matter that may
affect the beneficiaries’ interests. Id.
104. See Am. Coll. of Trust & Estate Counsel, Commentaries on the Model
Rules of Professional Conduct 36 (4th ed. 2006) (commenting that an attorney
retained by a fiduciary may have restrictive duties, such as refraining from
taking advantage of his position to the disadvantage of the fiduciary estate or
106. See Thomas Spahn, Ethics Issues Facing Trust and Estate Lawyers:
Hypotheticals and Analyses 485 (2012), https://www.vtbar.org/User
Files/Files/EventAds/052412.pdf (discussing the ACTEC Commentaries and the
duties imposed on fiduciaries’ attorneys).
107. See Am. Coll. of Trust & Estate Counsel, supra note 104, at 36 (“Some
courts have characterized the beneficiaries of a fiduciary estate as derivative or
secondary clients of the lawyer for the fiduciary.”).
negligence claims stating that they foreseeably relied on the
The Massachusetts Supreme Court acknowledged that to
sustain the negligence claims, plaintiffs must show that
defendants owed them a duty of care, such as that which arises
from an attorney–client relationship.167 It was undisputed that no
direct attorney–client relationship existed between the
plaintiff-beneficiaries and the defendant-attorneys.168 The
plaintiffs asserted that a duty existed because the defendants
should have foreseen that the plaintiffs would rely on the
defendants’ advice to protect their interests.169 The court found
that, although an attorney may owe a duty to nonclients who the
attorney knows will rely on services rendered,170 it is “less likely
to impose a duty to nonclients” where an attorney is also “under
an independent and potentially conflicting duty to a client.”171
The court explained that a trustee may be required to make
difficult decisions in administering the trust regarding duties to
the beneficiaries, and the attorney’s job is to guide the trustee in
making these decisions.172 Focusing on the potential conflict of
interests,173 the court concluded:
That the interests of the trustee and the interests of the
beneficiaries may at times conflict cannot seriously be
disputed. Should we decide that a trustee’s attorney owes a
duty not only to the trustee but also to the trust beneficiaries,
166. See id. at 551 (stating other claims made).
167. See id. at 552 (noting the importance of an attorney–client relationship
for purposes of the duty of care).
168. See id. (noting a brief court clarification on the contested facts of the
169. See id. (“The plaintiffs claim that . . . defendants owed them a duty
because it was foreseeable that the plaintiffs would rely on the defendants’
advice to protect their interests.”).
170. Id. (citing Robertson v. Gaston Snow & Ely Bartlett, 404 Mass. 515, 524
171. Id. (quoting Page v. Frazier, 388 Mass. 55, 63 (1983)).
172. See id. at 552–53 (noting a trustee must make difficult decisions and “a
trustee’s attorney guides the trustee in this decision-making process”).
173. Id. at 554 (citing DeRoza v. Arter, 416 Mass. 377, 383–84 (1993);
Robertson v. Gaston Snow & Ely Bartlett, 404 Mass. 515, 524 (1989); Page v.
Frazier, 388 Mass. 55, 63 (1983)).
conflicting loyalties could impermissibly interfere with the
attorney’s task of advising the trustee. This we refuse to do.174
The court also noted that imposing duties on a trustee’s attorney
to beneficiaries might create situations antithetical to the
Massachusetts disciplinary rule that requires an attorney to
preserve the confidences of his client in these circumstances.175
Referencing Goldberg, the Massachusetts Supreme Court
also found that the plaintiffs were not intended third-party
beneficiaries.176 The plaintiffs did not allege that the parties
intended to confer the benefit of legal counsel on them and thus
could not rely solely on their status as trust beneficiaries for this
174. See id. at 553 (addressing the current case as it applies to
Massachusetts disciplinary rules).
175. See id. at 554 (explaining that “the disciplinary rules which govern
attorney conduct in Massachusetts require in the circumstances of this case that
an attorney preserve the secrets and confidences gained in the course of
representing a client”).
176. See id. at 555 (emphasizing that the fact that a beneficiary was
benefitted or harmed does not, without more, make any beneficiary an intended
third-party beneficiary of the attorney–client contract). The doctrine of intended
third-party beneficiaries comes from contract law. Fuller, supra note 5, at 50. In
a legal malpractice context, the intended third-party beneficiary approach
recognizes that an attorney and client, as promisor and promisee, may create
rights in an estate beneficiary. Id. at 51. Therefore, when circumstances indicate
that the agreement was made for the beneficiary’s benefit, an attorney owes a
duty to beneficiaries. Id.
Traditional barriers remain in force in situations where adversarial
relations may arise. Id. The Illinois Supreme Court explained the rationale for
these barriers in Pelham v. Griesheimer, stating specifically, “In the area of
legal malpractice, the attorney’s obligations to his client must remain
paramount.” 440 N.E.2d 96, 99 (Ill. 1982). Realizing the many scenarios in
which the parties’ interests may collide, the court refused to “create such a wide
range of potential conflicts by imposing such duties upon an attorney in favor of
a non-client, unless the intent to benefit the third party is clearly evident.” Id. at
100. The Illinois Supreme Court relied on Pelham in Neal v. Baker, 194 Ill. App.
3d 485 (1990), in which it held that a named beneficiary of a testator’s estate
could not bring a malpractice action against the estate representative’s
attorney, hired to assist in administering the estate, without showing that the
attorney–client contract was entered into with the specific intent to directly
benefit the plaintiff as a third party beneficiary. Id. at 487–88.
claim.177 Such a position would be contrary to what would
traditionally be expected of trustees seeking legal counsel.178
Finally, the court stated that the beneficiaries in Spinner did
have some opportunity for recourse.179 The beneficiaries could
bring actions against the individual trustees if the plaintiffs could
prove a breach of fiduciary duties owed to them.180 The trustees
could then bring claims against their attorneys.181 Indeed, the
trial judge took judicial notice of pending matters against the
B. State Statutes and ABA Formal Opinion 94-380
Many states have statutes that follow the traditional theory
in identifying the attorney’s client when the attorney represents a
fiduciary.183 Settling the question of whom the attorney
represents alleviates an attorney’s liability for claims brought by
a nonclient-plaintiff based on breach of duty within an attorney–
client relationship.184 If an attorney represents a third party and
thus owes duties to the third party, the third party may have
177. See Spinner v. Nutt, 417 Mass. 549, 554 (1994) (acknowledging the
invalidity of beneficiaries’ argument for why fiduciary’s attorney owed them a
178. See id. at 555–56 (noting that a plaintiff-beneficiary must normally
show that the parties entered into a contract primarily for the beneficiary’s
179. See id. at 556 (“It bears repeating that this result does not leave the
beneficiaries without recourse; they can pursue an action directly against the
trustees if they can show a breach of their fiduciary duties.”).
180. See id. at 557 (“[T]his result does not leave the beneficiaries without
recourse; they can pursue an action directly against the trustees if they can
show a breach of their fiduciary duties.”); Correira, supra note 6, at 12 (detailing
the facts of Spinner and emphasizing the beneficiaries’ options as explained by
181. See Spinner, 417 Mass. at 555; Correira, supra note 6, at 12 (noting the
trustees’ options after beneficiaries bring a claim against it).
182. See Spinner, 417 Mass. at 555 (highlighting legal actions pending
against the trustees in the matter).
183. See Lee, supra note 4, at 472 (commenting on state legislation and
policy regarding an attorney’s representation of a fiduciary).
184. See RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 16 cmt. a
) (discussing duties owed to clients and the client’s ability to enforce such
duties by legal claims against the attorney).
standing to bring claims against the attorney for breaching those
duties.185 State statutes express a state’s attempt at clarifying
who an attorney represents and, therefore, to whom an attorney
owes duties as a result of the attorney–client relationship.186
In South Carolina, an attorney whose client is a fiduciary
owes no duties to any beneficiary or other party interested in the
trust, estate, or fiduciary property unless specifically stated in
the attorney’s contract.187 Similarly, an Ohio statute says that,
absent an express agreement to the contrary, a fiduciary’s
attorney has no obligation or duties in tort, contract, or otherwise
to any third party to whom the fiduciary owes fiduciary duties.188
It goes on to state that the term “fiduciary,” as used in Title LVIII
labeled “Trusts,” means a “trustee of an express trust or an
executor or administrator of a decedent’s estate.”189 A Florida
statute provides that “the personal representative is the client
rather than the estate or the beneficiaries.”190 Michigan’s Probate
Court rules declare that an attorney “filing an appearance on
behalf of a fiduciary shall represent the fiduciary”191 and not the
beneficiary or the estate.192 Finally, although not a statute, a
Kentucky Bar Association ethics opinion expressed its favor for
the position that an attorney for a fiduciary represents only the
185. See id. § 51 cmt. a (clarifying that an attorney is liable to nonclients
when he violates a duty to such nonclients in the rare circumstances such duties
may be imposed).
186. See Lee, supra note 4, at 472 (explaining state statutes and their
clarification on who the attorney represents in each state).
187. See S.C. CODE ANN. § 62-1-09 (2011) (stating that a fiduciary’s attorney
owes no duties to beneficiaries absent language in a contract, which is intended
to be “declaratory of the common law” and governs relationships between
attorneys and persons serving as fiduciaries).
188. See OHIO REV. CODE ANN. § 5815.16(A) (2007) (explaining the fiduciary
duties of attorney or fiduciary).
189. Id. § 5815.16(B).
190. FLA. STAT. ANN. Bar Rule 4-1.7 cmt. (2013).
191. MICH. COMP. LAWS. ANN. Rule 5.117(A) (2012).
192. See id. Rule 5.117(A) cmt. (clarifying that the attorney does not
represent the estate, thereby representing beneficiaries, but only represents the
fiduciary or trustee); Lee, supra note 4, at 472, 486 (detailing Michigan Probate
Court Rule 5.117(A) and its comment, which state that an attorney does not
represent the beneficiary).
fiduciary and owes no excess duties to beneficiaries outside of
those owed to all other third parties.193
In ABA Formal Opinion 94-380, the ABA expressed its favor
for a version of the traditional approach.194 It states that simply
because a fiduciary-client has duties to beneficiaries “does not
impose parallel obligations on the lawyer, or otherwise expand or
supersede the lawyer’s responsibilities under the Model Rules of
Professional Conduct.”195 Although the opinion does not
specifically say that an attorney represents only the
fiduciaryclient, it implies this idea by explaining that the attorney can
voluntarily “undertake” to represent a fiduciary only.196 The ABA
takes the position that an attorney may choose to represent the
beneficiaries or the estate, but he may also only represent the
fiduciary.197 It does not address the issue of potential conflicts of
interest that may arise by representing multiple clients.198 It
does, however, suggest that the law does not force an attorney
into representation of the beneficiaries by nature of his
representation of the fiduciary.199 The ABA emphasizes this idea
in its report of the Special Study Committee on Professional
Responsibility.200 The report states that an attorney’s only client
is the fiduciary unless the lawyer chooses to represent the estate
193. See Ky. Bar Ass’n, Ethics Op. KBA E-401 4–5 (1997) (adopting various
views expressed in ABA Formal Opinion 94-380 and ACTEC’s commentaries on
the Model Rules of Professional Conduct as advisory to Kentucky courts).
194. See ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 94-380
(1994) (recognizing that the Model Rules reflect the majority view of
jurisdictions, which holds that an attorney who represents a fiduciary does not
also represent the beneficiaries).
197. See id. (explaining that this opinion addresses only those circumstances
where an attorney “undertakes” to represent only the fiduciary and not
beneficiaries or the estate as an entity).
198. See id. (“We do not . . . deal with the conflict of interest issues that may
arise when a lawyer undertakes simultaneously to represent both fiduciary and
beneficiary with regard to the same subject matter.”).
199. See id. (insinuating that the lawyer may choose to represent only the
fiduciary or the fiduciary and beneficiaries).
200. See ABA Special Study Comm. on Prof’l Responsibility, supra note 3, at
831 (addressing the issue of who is the attorney’s client if attorney is asked by
the fiduciary to advise it as an executor or trustee and the attorney has not
represented any of the beneficiaries).
or trust as an entity and reaches an express agreement with the
fiduciary to that effect.201 The attorney’s client is the “fiduciary
qua fiduciary,” or in the fiduciary capacity of executor or trustee
as opposed to an entity capacity or individual capacity.202
The ABA holds all attorneys as bound by the Model Rules of
Professional Conduct (Model Rules) with no exception for
attorneys representing fiduciaries.203 The fact that the
fiduciaryclient has obligations to beneficiaries of a trust or estate does not
“expand or limit the lawyer’s obligations to the fiduciary client
under the Model Rules.”204 Similarly, an attorney is not obliged to
satisfy the duties imposed under the Model Rules regarding
beneficiaries.205 The ABA does not impose on the lawyer any
additional obligations towards the beneficiaries that the lawyer
would not owe to all third parties.206 It specifically proclaims that,
although the attorney is prohibited from “actively participating in
criminal or fraudulent activity or active concealment of a client’s
wrongdoing,” the attorney’s duty of confidentiality is not
mitigated simply because the client is a fiduciary.207 This
approach essentially puts beneficiaries on an equal playing field
201. See id. (explaining that an attorney may elect to represent an estate or
trust as an entity, otherwise, by default, the attorney represents only the
203. See ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 94-380
(1994) (applying the strictures of the Model Rules of Professional Conduct
universally to all attorneys); id. at n.6 (detailing the many limitations the Model
Rules place on attorneys representing fiduciaries).
205. See id. (noting that an attorney, with scope of representation and duties
defined under Model Rule 1.2, having a duty to “diligently represent the
fiduciary” under Model Rule 1.3, and to preserve in confidence communications
between attorney and fiduciary under Model Rule 1.6, does not owe parallel
duties to beneficiaries); Tuttle, supra note 2, at 904–05 (discussing ABA 94-380
and noting that under the Model Rules, an attorney’s duties of loyalty and care
“run only to the fiduciary”).
206. See ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 94-380
(1994) (noting specifically that the obligation to keep a client’s confidences under
Model Rule 1.6 is not altered by the client being a fiduciary); Tuttle, supra note
2, at 905 (“[T]he lawyer has no greater duty to protect the beneficiary from
fiduciary overreaching than she has to protect any other third party . . . . [T]he
lawyer’s duty of loyalty extends only to her client; the client’s beneficiary stands
outside the protective sphere.”).
ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 94-380.
with other third parties regarding duties owed by the fiduciary’s
attorney.208 The difference between beneficiaries and other third
parties arises in duties owed by the fiduciary itself.209 Similarly,
the mandatory and optional withdrawal rules in Model Rule 1.16
will not apply to beneficiaries’ criminal or fraudulent conduct to
force attorney withdrawal because the ABA determines the
attorney not to represent the beneficiaries unless he chooses to do
C. Attorney’s Duties to Third Parties Generally
As noted in ABA Formal Opinion 94-380, an attorney owes
no additional duties to beneficiaries that he would not owe to
other third parties.211 Although the ABA specified that attorneys
for fiduciaries owe the same duties to all third parties, whether or
not they are beneficiaries, courts holding that an attorney owes
no duty to beneficiaries imply the same.212 In a sense, these
courts determine that an attorney owes no special duty to
beneficiaries outside of those duties owed to all third parties.213 It
would be ludicrous, after all, to presume that these courts have
stripped attorneys of duties owed to all third parties merely by
determining that an attorney does not owe special duties to his
fiduciary-client’s beneficiaries. This presents the question: what
208. See id. (emphasizing that an attorney owes beneficiaries no different
duties than or additional duties to those owed to every third party to the
209. See id. (noting that a fiduciary owes duties to beneficiaries only, and
not to any other third party).
210. See id. (discussing how the operation of Model Rule 1.16 does not
depend on the client’s status as a fiduciary, and an attorney’s duties to clients
under the Model Rules are not applied to third parties).
211. See id. (equating duties an attorney owes to beneficiaries and other
212. See Spinner v. Nutt, 417 Mass. 549, 552 (1994) (explaining that a
trustee’s attorney does not owe a duty to beneficiaries giving rise to a claim for
professional negligence, but recognizing that an attorney is not “absolutely
insulated from liability to nonclients”).
213. See ABA Special Study Comm. on Prof’l Responsibility, supra note 3, at
834–35 (discussing that some courts have found attorneys owe some duty to
beneficiaries, which serves to bar certain conduct, not “impose affirmative
duties”). Similarly, an attorney’s duties to all third parties serve to bar conduct,
hence the term “negative duties.” Infra notes 214–217.
duties does an attorney owe beneficiaries by virtue of being third
Although some courts classify the duties an attorney owes to
a fiduciary-client’s beneficiaries as exceptions to the traditional
theory, these exceptions are nothing more than violations of the
“negative duties” that an attorney owes all third parties.214 These
negative duties owed to all third parties include: (1) the duty not
to “embarrass, harass, or violate the legal rights of a third party”;
(2) the duty to avoid making false or misleading statements to
third parties; (3) the duty to not advise a client to commit or
assist a client in committing a fraudulent or criminal act against
a third party; and (4) the duty to notify third parties who believe
they are clients of the attorney that they are not represented and
are not in an attorney–client relationship with the attorney.215
These are essentially prohibitions against certain kinds of
attorney conduct,216 not impositions of affirmative duties.217
When representing a fiduciary, the two most commonly
violated negative duties are the duty to not make false or
misleading statements to third parties and the duty to not assist
or advise a client to commit a crime or fraud against a third
party.218 An attorney may violate the duty to not make false or
misleading statements to a third party when an attorney makes
“affirmative representations of care” to beneficiaries or other
third parties.219 Any statement of assurance may mislead third
parties to assume that their interests are being protected and will
likely result in the creation of a new fiduciary relationship
214. See Lee, supra note 4, at 475 (discussing the negative duties of an
216. See ABA Special Study Comm. on Prof’l Responsibility, supra note 3, at
834 (“[T]he duties that the lawyer for the fiduciary owes to a beneficiary who is
not a client consist of prohibitions against certain types of conduct by the
217. See id. at 834–35 (explaining that duties a fiduciary’s attorney may owe
to beneficiaries act “to bar certain conduct by the lawyer, not to impose
affirmative duties to advocate or otherwise to represent actively the interests of
218. See Lee, supra note 4, at 475 (explaining the most violated negative
between the attorney and the third party.220 Furthermore, an
attorney may violate this duty by actively concealing or assisting
in the concealment of a client’s breach of fiduciary duty owed to
When an attorney participates in a breach of a client’s
fiduciary duty, it is a violation of the negative duty to not assist
or counsel a client to engage in criminal or fraudulent activity
against a third party.222 An attorney does not breach this duty
when merely giving legal advice to a fiduciary.223 The attorney
must “actively [collude] with the trustee in breaching the
trustee’s fiduciary duties.”224 An attorney is generally not
required to disclose the breach to the beneficiary or prevent the
breach from happening.225 Therefore, mere knowledge of the
fiduciary-client’s breach does not subject the attorney to liability
for active participation.226
220. See id. (exemplifying ways in which the duty to not make false or
misleading statements may be violated).
221. See MODEL RULES OF PROF’L CONDUCT R. 4.1 (2012) (stating a lawyer
shall not knowingly make a false statement of material fact to a third person or
fail to disclose a material fact to a third person when disclosure is necessary to
prevent committing or assisting to commit a crime or fraud on the person); ABA
Comm. on Ethics & Prof’l Responsibility, Formal Op. 94-380 (1994)
(emphasizing, in footnote 6, that an attorney may not conceal, or actively assist
in concealing, a client’s breach of fiduciary duty); ABA Special Study Comm. on
Prof’l Responsibility, supra note 3, at 837 (noting that an attorney cannot cover
up or assist in a cover-up of breaches of a client’s fiduciary duty).
222. See MODEL RULES OF PROF’L CONDUCT R. 1.2 (stating a lawyer shall not
counsel or assist a client to engage in activity the lawyer knows is criminal or
fraudulent); ABA Comm. on Ethics & Prof’l Responsibility, Formal Op. 94-380
(1994) (emphasizing, in footnote 6, that an attorney may not participate in a
client’s breach of fiduciary duty); ABA Special Study Comm. on Prof’l
Responsibility, supra note 3, at 836 (noting that an attorney cannot participate
in “noncriminal, nonfraudulent breaches” of a client’s fiduciary duty); Lee, supra
note 4, at 476 (discussing violations of the duty to not assist a client to commit
fraud or crime).
223. See MODEL RULES OF PROF’L CONDUCT R. 1.2 cmt. 9 (noting the “critical
distinction” between presenting the client with analysis of the legal aspects of
certain conduct); Lee, supra note 4, at 476 (highlighting that it is insufficient for
an attorney to breach this duty by merely giving legal advice to a fiduciary).
Lee, supra note 4, at 476.
225. See id. (“There is no requirement that the attorney must prevent the
breach or inform the beneficiary of the breach.”).
226. See id. (detailing that the law does not prohibit nondisclosure of a
client’s breach of fiduciary duty “although nondisclosure may be morally
questionable”); ABA Comm. on Ethics & Prof’l Responsibility, Formal Op.
Although this Note discusses the negative duties outlined
above in their relation to fiduciaries’ attorneys and beneficiaries,
remember that they apply equally in different circumstances to
all other third-party–attorney interactions.227
V. Advantages and Disadvantages of Each Approach
A. Advantages of Imposing Duties
Courts impose duties on a fiduciary’s attorney because courts
recognize that the available remedies to injured third parties may
be inadequate.228 The duties are imposed with the goal of
deterring attorneys’ negligent conduct.229 Subjecting an attorney
to the possibility of liability for claims of breach of fiduciary duty
or professional negligence promotes the social policy of
“compensating innocent victims and preventing lack of care in
attorney actions”230 and forces them to absorb the costs of their
negligence.231 Similarly, it promotes the economic policies of
“efficiency and risk allocation,” which decreases injury to
380 (1994) (explaining that under Model Rule 1.6, an attorney may not disclose
a client’s breach of fiduciary duty—although some jurisdictions are lessening
the standard to allow this disclosure, it is still not required).
227. See Lee, supra note 4, at 475 (acknowledging that these negative duties
are owed to all third parties); ABA Comm. on Ethics & Prof’l Responsibility,
Formal Op. 94-380 (1994) (“These rules apply to a lawyer with a fiduciary client
to the same extent as, but no farther than, they apply in any other
lawyer/tribunal/third party scenario.”).
228. See Fuller, supra note 5, at 43 (asserting that many courts loosen the
privity requirement in finding attorneys owe a duty of care to beneficiaries
because beneficiaries have little remedy if legally injured in the trusts and
229. See id. (explaining the theories of attorney liability to third parties and
reasons why this liability exists).
230. Id. at 49. These policies are promoted because attorneys have the
ability to take out insurance policies making them better able than third parties
to insulate themselves from serious losses. Id. at n.115. Additionally, attorneys
are more equipped to assess the risks due to their knowledge and skill. Id.
231. See id. at 58 (explaining that an attorney is forced to bear the cost of his
own negligence, which “[deters] legal malpractice in general,” by providing
remedies to beneficiaries as innocent victims of negligent attorneys).
232. Id. at 49. The economic policies justify imposing duties on an attorney
because “attorneys are better able to insulate themselves from heavy losses than
Additionally, the theory that injured beneficiaries are in
direct privity with attorneys by way of an attorney–client
relationship (a joint-client theory)233—and the similar “pass
through privity” theory234—“[acknowledge] the scope of a
fiduciary relationship and an attorney’s proper role without
painting it too broadly.”235 Establishing that attorneys owe a duty
of care under these approaches has the added benefit of providing
a degree of certainty for attorneys because they only owe a duty
to those involved in a fiduciary relationship with the hiring
Finally, some scholars assert that because an attorney would
disclose relevant information about the administration of the
estate to all parties involved, these theories alleviate the
are innocent third parties due to attorneys’ ability to procure insurance, and
because attorneys’ skill and knowledge puts them in a better position to assess
risk.” Id. at n.115.
See supra notes 119–126 (outlining the joint-client theory).
234. See Fuller, supra note 5, at 59 (discussing the advantages of finding an
attorney owes a duty to beneficiaries under “pass through” privity). The pass
through privity theory provides that an attorney hired by a personal
representative “owes a duty to the beneficiary vis-à-vis the attorney’s duty to
the personal representative and the personal representative’s duty to the
beneficiary.” Id. This is the approach taken in Elam v. Hyatt Legal Services as
another case where the court found an estate representative’s attorney to owe a
duty to estate beneficiaries. See supra note 100 (citing Elam v. Hyatt Legal
Servs., 541 N.E.2d 616, 618 (Ohio 1989)). Essentially, under the pass through
privity theory, the duty created by the attorney–client relationship between an
attorney and the fiduciary-client is deemed to extend in full to the beneficiaries
of the estate. Fuller, supra note 5, at 61. The estate representative’s relationship
to the beneficiaries “provides the requisite element of privity to establish a duty”
owed by the attorney to beneficiaries. Fuller, supra note 5, at 61–62. Whether a
court says that an attorney is in direct privity with beneficiaries or applies the
pass through privity theory, the effect is that an attorney is liable to
beneficiaries for damages arising from the attorney’s negligent conduct. Fuller,
supra note 5, at 59.
235. Fuller, supra note 5, at 60–61. This idea is also explained by
acknowledging the joint interests of the trustee or estate representative and the
beneficiaries. Lee, supra note 4, at 479. Some argue that because the
beneficiary’s interests “seem to flow to and become the interests of the
fiduciary,” counsel for the fiduciary-client “must recognize this relationship and
also adopt the beneficiary as a joint-client.” Id.
236. See Fuller, supra note 5, at 62 (“Thus, all of the individuals to whom
the attorney might potentially be liable are immediately identifiable as
individuals to whom the personal representative owes a duty, thereby providing
the attorney with a degree of certainty in performing her duties.”).
potential adversity between beneficiaries and estate
representatives.237 Indeed, when the fiduciary and the
beneficiaries are joint-clients of an attorney, all parties are
included in the “circle of confidences” surrounding the attorney–
client relationship.238 If the lawyer discovered that the trustee or
estate representative was in breach of fiduciary duties, the
lawyer would have an ethical obligation to inform the
beneficiaries of the breach due to the duty of loyalty owed to
B. Disadvantages of Imposing Duties
One of the most significant disadvantages of imposing duties
on an attorney is the possibility of creating conflicting
interests.240 Many courts fear that imposing a duty of care to
promote the beneficiaries’ interests—whether as joint-clients or
otherwise—will conflict with an attorney’s interests in
representing the fiduciary-client.241 Such conflicts of interest are
237. See id. (explaining that the attorney is able to provide advice to both
estate representatives and beneficiaries, which “alleviates, rather than
exacerbates, potential adversity between the personal representative and the
Tuttle, supra note 2, at 911.
239. See id. (noting that “the lawyer would have no ethical barrier to
disclosing the breach to the beneficiary” because all material information
disclosed to the attorney by the fiduciary would have to be disclosed to the
240. See MODEL RULES OF PROF’L CONDUCT R. 1.7 cmt. 27 (2012) (explaining
that “conflict questions may arise in estate planning and estate
administration”); Fuller, supra note 5, at 54 (“[T]he primary concern of courts
that adopt this approach seems to center around the potential adversarial
relationship between the personal representative and the beneficiaries.”); Lee,
supra note 4, at 470 (“One of the most difficult issues an attorney may face in
the representation of a fiduciary relates to conflict of interest.”). But see Pennell,
supra note 11, at 1319 (noting that an inquiry into whom the attorney owes
fiduciary duties “is of academic interest only, because the potential for a real
conflict among the fiduciary, beneficiaries, and claimants such as creditors or
disappointed heirs never ripens into a real controversy”).
241. See, e.g., Spinner v. Nutt, 631 N.E.2d 542, 544–45 (Mass. 1994)
(acknowledging that when an attorney represents a fiduciary, the attorney
should not owe duties to a beneficiary because “conflicting loyalties could
impermissibly interfere with the attorney’s task of advising the trustee”); Trask
v. Butler, 872 P.2d 1080, 1085 (Wash. 1994) (refusing to hold that an attorney
for an estate representative owes duties to the beneficiaries because “the
often impermissible, as they impinge on an attorney’s ability to
adequately represent the fiduciary-client.242 Indeed, an actual
conflict of interest does not have to arise: under the Model Rules,
a concurrent conflict of interest exists if a relationship creates a
“significant risk” of conflicting responsibilities.243 Thus, the
attorney “would be prohibited from continuing this type of
relationship unless each party gives informed consent to the
representation despite the conflicting interests.”244 The fiduciary
effectively would be unable to obtain legal counsel if even one
beneficiary refused to consent to the conflict.245 The likelihood of
this problem increases with each additional beneficiary involved
in the fiduciary relationship.246 This problem is evidence that
imposing duties on a fiduciary’s attorney could prevent an
attorney from fulfilling his ethical obligations to the
unresolvable conflict of interest an estate attorney encounters in deciding
whether to represent the personal representative, the estate, or the estate heirs
unduly burdens the legal profession” (emphasis added)); Lee, supra note 4, at
481 (“[C]ourts have explained that this type of representation is not proper, as it
would hinder the ability of the attorney to act in the best of both clients.”).
242. See Fuller, supra note 5, at 54 (recognizing courts’ fear that finding an
attorney owes a duty to both personal representative and beneficiaries creates
an “untenable conflict of interest for attorneys and hampers their ability to
represent their clients”).
MODEL RULES OF PROF’L CONDUCT R. 1.7(a)(2) (2012).
244. Lee, supra note 4, at 481; see also MODEL RULES OF PROF’L CONDUCT R.
1.6(b)(4) (allowing representation to continue despite a conflict of interest if,
among other things, “each affected client gives informed consent, confirmed in
245. Lee, supra note 4, at 481 (explaining how a conflict of interest would
affect an attorney’s representation of a fiduciary and multiple beneficiaries).
246. See id. (describing the enhancement of the problem with more
beneficiaries); Tuttle, supra note 2, at 912 (acknowledging the unity of fiduciary
and beneficiary interests “may hold true where there is only one beneficiary but
seems less likely in those fiduciary relationships which involve multiple
beneficiaries, who may have conflicting interests”).
An example of such conflicting interests would be those of income
beneficiaries and remaindermen beneficiaries, who have “structurally different
economic interests.” Tuttle, supra note 2, at 912. Income beneficiaries prefer
investments that will create more income today while remaindermen prefer
investments with long-term appreciation potential without depletion by income
247. See Fuller, supra note 5, at 54 (“Presumably, the fear is that attorneys’
ethical obligations to clients are undermined if they are held to owe a duty to
Finally, imposing a duty on attorneys to beneficiaries
undermines the goals of legal malpractice for professional
negligence.248 Recall that the duty of care is a duty to “exercise
the competence and diligence normally exercised by lawyers in
similar circumstances.”249 This is the standard that some courts
are applying to attorneys in relation to beneficiaries, discussed
above,250 whether called a fiduciary duty or a duty of care.251
Recall also that the goals of legal malpractice for professional
negligence are to discourage a lawyer’s improper conduct or
inaction and to compensate plaintiffs for injury caused by such
negligence.252 However, allowing third-party beneficiaries to
bring professional negligence claims significantly increases an
attorney’s possible liability, which may have detrimental effects
on the fiduciary relationship.253 The goals of attorney liability for
professional negligence are undermined by attorneys increasing
the price of legal representation to cover the risks of liability or
by creating pressure on attorneys to “slight the proper concerns of
clients in order to avoid liability to nonclients.”254 As the lawyer’s
248. See infra notes 252–258 and accompanying text (explaining ways in
which imposing duties on attorneys frustrates the objectives of professional
RESTATEMENT (THIRD) THE LAW GOVERNING LAWYERS § 52 (
250. See supra notes 84–96 and accompanying text (detailing court opinions
applying the duty of care standard to attorneys in relation to beneficiaries).
251. See supra Part II.A.3 (analyzing the common conflation of the duty of
care and fiduciary duties).
252. See RESTATEMENT (THIRD) THE LAW GOVERNING LAWYERS § 48 cmt. b
(discussing how professional negligence and malpractice are applied to
253. See Alan F. Streisand, Malpractice Melee: Fending Off the Disgruntled
and Disappointed, an Estate Planner’s Field Guide, 3 EST. PLAN. & COMMUNITY
PROP. L.J. 241, 262 (2011) (“Relaxing privity to permit third parties to
commence professional negligence actions against estate planning attorneys
would produce undesirable results—uncertainty and limitless liability.” (quoting
Estate of Schneider v. Finman, 15 N.Y.3d 306, 310 (2010))); Tuttle, supra note 2,
at 892 (emphasizing that imposing duties on attorneys owed to beneficiaries
“exposes lawyers to significantly increased malpractice liability with potentially
damaging consequences for the fiduciary relationship itself”).
254. RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 48 cmt. b; see
also Fuller, supra note 5, at 42 (“[A] duty owed by an attorney to the general
public imposes potentially huge liability on attorneys in general.”); Tuttle, supra
note 2, at 943 (explaining that “a legal duty to protect the beneficiary creates
significant potential liability for the attorney”).
malpractice exposure and time required for fiduciary oversight
increase, the lawyer’s costs increase.255 Often, these costs prevent
fiduciaries from obtaining counsel or are spread to the
beneficiaries.256 Conflicting concerns exist, however, because it
can be difficult to distinguish harm caused by inappropriate
lawyer conduct from harm to nonclients resulting from a lawyer
vigorously representing a client.257 Therefore, holding an attorney
liable to nonclients could discourage attorneys from such vigorous
representation of clients.258
C. Advantages of Applying the Traditional Approach
Most notably, the traditional approach avoids the conflicts of
interest problem discussed above.259 By holding that a fiduciary’s
attorney owes no duties to the beneficiaries (other than those
duties owed to all nonclients), an attorney’s only concern is for
the interests of the fiduciary-client.260 Thus, if the interests of the
fiduciary-client and a beneficiary become adverse, it is clear that
the attorney’s loyalties lie only with the fiduciary-client and that
no concurrent conflict of interest exists.261
The traditional approach also encourages the fiduciary-client
to “communicate fully and frankly with the lawyer even as to
255. See Tuttle, supra note 2, at 943 (noting the potential for an attorney to
increase the cost of representing a fiduciary if the attorney is determined to owe
some form of duty to beneficiaries as well).
256. See id. (recognizing that the lawyer’s costs “and thus, ultimately, the
beneficiary’s costs” will increase as a result of the added attorney duty to
257. See RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 51 (
cmt. b (addressing the duty of care as applied to nonclients).
258. See id. (acknowledging a concern with holding attorneys liable to
259. See Lee, supra note 4, at 474 (“One of the benefits of the traditional
theory is that attorneys are provided sufficient guidance when faced with a
conflict of interest question.”); Tuttle, supra note 2, at 905 (noting that the
approach applying no duties to beneficiaries on a fiduciary’s attorney “avoids the
conflicts of interest that are endemic to any theory of joint or entity
260. See Tuttle, supra note 2, at 905 (explaining that the conflicts of interest
issue is avoided by “restricting the lawyer’s loyalties to the fiduciary–client”).
261. See Lee, supra note 4, at 474 (“If the attorney owes no duties to the
beneficiary, there can be no concurrent conflict of interest.”).
embarrassing and legally damaging subject matter.”262 It
achieves this by stressing the “inviolable nature of the fiduciary’s
confidences.”263 The fiduciary-client is encouraged to
communicate openly with the attorney, which allows the attorney
to give the best representation and advice.264 Open
communication between the fiduciary and the attorney permits
the fiduciary to fulfill his fiduciary duties more properly and to
administer the trust or estate without suffering from being poorly
informed.265 A properly advised trustee is better for beneficiaries
because the trustee is more capable of looking after the
D. Disadvantages of Applying the Traditional Approach
Most opponents of the traditional theory are concerned that
it does not provide adequate protection to beneficiaries.267 For
example, “[o]pponents of the traditional theory claim that justice
would not be served if the attorney were permitted to simply
withdraw from representation or withhold information while the
beneficiary’s interests are injured.”268 Arguably, requiring an
attorney to disclose to beneficiaries any breach of the
fiduciary262. See id. (quoting MODEL RULES OF PROF’L CONDUCT R. 1.6 cmt. (2012)).
264. See Renee Newman Knake, Attorney Advice and the First Amendment,
68 WASH. & LEE L. REV. 639, 642 (2011) (“Without the ability to render
independent and candid legal advice, attorneys and, importantly, their clients
have nothing.”); Lee, supra note 4, at 491 (“By clarifying where the attorney’s
loyalties rest, the fiduciary is able to openly communicate with the attorney in
order to receive the best advice and representation.”); Tuttle, supra note 2, at
938 (“When a client feels free to disclose all information to his attorney, without
fear that the attorney will disclose the information to others, the attorney is
better able to both represent the client (promoting justice) and to dissuade the
client from undertaking wrongful acts (promoting social utility).”).
265. See Lee, supra note 4, at 491 (noting the benefits of open
communication between attorney and fiduciary when the attorney does not owe
a duty to the beneficiaries).
266. See id. (explaining that “the fiduciary will not suffer from being
illinformed and will be more capable of fulfilling his fiduciary duties and properly
administering the trust or estate, which will benefit the beneficiary”).
267. See id. at 489 (“Opponents of the traditional theory demand that more
protection be provided for a beneficiary.”).
268. Id. at 491.
client’s duties is the only way to adequately protect the
beneficiaries’ interests.269 Opponents also fear that beneficiaries
will have no redress when an attorney has acted negligently but
the fiduciary has not breached any duty.270
The second argument against the traditional theory focuses
on the nature of the fiduciary relationship between trustee or
estate representative and beneficiary. Opponents argue that “the
fiduciary’s agency is inseparable from his fidelity to the
beneficiary.”271 Because the fiduciary’s identity is “fundamentally
relational,”272 the attorney’s relationship to the fiduciary should
reflect the fiduciary’s loyalty to the beneficiaries.273 Opponents
argue that the fiduciary’s attorney should not treat beneficiaries
as “[strangers], a potential foe.”274 The traditional approach
disregards the nature of the fiduciary’s function and relationship
with the beneficiaries by allowing an attorney to represent a
fiduciary while disregarding the beneficiaries’ interests.275 Thus,
the structure of the fiduciary relationship itself calls for a “more
nuanced understanding of the lawyer’s duties toward the client’s
beneficiary,” such as one in which an attorney owes some duty to
the client’s beneficiaries.276
Whether classified as a fiduciary duty or a duty of care,
theories imposing duties on a fiduciary’s attorney create more
269. See id. (arguing that in order to protect the interests of beneficiaries,
the attorney should disclose fiduciary breaches).
270. See id. at 489 (noting the fear of protection for beneficiaries).
271. Tuttle, supra note 2, at 906.
272. Id. at 920.
273. See id. at 906 (“How can that duty of loyalty not affect the core of the
lawyer’s relationship with the fiduciary?”).
274. Id. at 906.
275. See Lee, supra note 4, at 479 (explaining that the fiduciary’s interests
and the beneficiaries’ interests are aligned; therefore, the attorney must
recognize this relationship and adopt the beneficiary as a joint-client); Tuttle,
supra note 2, at 892 (noting that the traditional approach “ignores the peculiar
nature of the fiduciary’s role and relationship with the beneficiaries”).
276. Tuttle, supra note 2, at 906.
problems than benefits.277 In contrast, the traditional approach is
clear and, by definition, avoids the problems created by holding
that attorneys owe a duty to beneficiaries, such as conflicts of
interest278 and increased attorney costs for greater professional
negligence liability.279 It avoids the concerns about fiduciaries’
incapability to obtain counsel280 while protecting beneficiaries by
encouraging open communication between attorney and
fiduciary.281 Therefore, states should adopt the traditional
approach, which provides as follows:
1. The fiduciary is the attorney’s only client;
2. The attorney owes fiduciary duties only to the fiduciary-client; and
3. The attorney owes no other special duties to
beneficiaries outside of the duties owed to all third
In adopting the traditional approach, states should recognize that
the intended third-party beneficiary doctrine still applies so long
as the specific intent to benefit third-party beneficiaries is clearly
277. See Lee, supra note 4, at 480 (noting that the problems posed by the
joint-client theory outweigh its benefits); Tuttle, supra note 2, at 943 (“Adding
an additional right to sue the fiduciary’s attorney imposes additional costs on
the trust administration, raises serious conflict of interest problems for the
attorney, and also requires the attorney to act against a central tenet of the
lawyer’s duty to her client—the duty of confidentiality.”).
278. See supra notes 240–247 and accompanying text (explaining the
concern that imposing duties on a fiduciary’s attorney may require an attorney
to represent the potentially conflicting interests of beneficiaries and the
279. See supra notes 254–256 and accompanying text (discussing the fear
that attorneys will charge more for representation to cover the increased risk of
professional malpractice liability).
280. See supra notes 245, 256 (fearing fiduciaries will be unable to obtain
counsel due to either conflicts of interest or the increased price for an attorney
resulting from an attorney owing duties to the beneficiaries).
281. See supra notes 262–266 (explaining that open communication between
attorneys and fiduciaries promotes proper administration of the estate or trust,
which benefits the beneficiaries).
282. See Lee, supra note 4, at 491 (summarizing the tenets of the traditional
283. See supra note 176 (addressing the intended third-party beneficiary
theory); Pelham v. Griesheimer, 440 N.E.2d 96, 99 (Ill. 1982) (“[T]o establish a
Contrary to opposing arguments,284 the traditional approach
provides adequate protection to beneficiaries because they have
methods of redress upon occurrence of misconduct by the
fiduciary or attorney.285 If malpractice by the fiduciary’s attorney
harms the estate or trust, the trustee or estate representative
may bring a malpractice action against the attorney.286 Indeed, it
is the fiduciary’s duty to bring such a malpractice action.287 If
misconduct of the fiduciary causes a loss to the estate, the
beneficiaries have an actionable claim against the fiduciary for
breach of fiduciary duty.288
duty owed by the defendant attorney to the nonclient the nonclient must allege
and prove that the intent of the client to benefit the nonclient third party was
the primary or direct purpose of the transaction or relationship.”); Neal v.
Baker, 194 Ill. App. 3d 485, 487–88 (1990) (applying the Pelham court’s “intent
to directly benefit” test); RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS
§ 51 (
) (describing an attorney’s duty to nonclients whom the attorney has
invited “to rely on the lawyer’s opinion or provision of legal services, and the
nonclient so relies”).
However, it is unlikely that a beneficiary will succeed in a malpractice
action against an attorney under this approach. Lee, supra note 4, at 473. This
is because, although a beneficiary is almost always specifically benefitted from
the fiduciary’s attorney–client relationship, it is extremely difficult to conclude
that the parties to the attorney’s contract entered into it “for the principal
purpose of providing benefit to the [beneficiaries].” Goldberg v. Frye, 217 Cal.
App. 1258, 1268 (1990).
Supra notes 267–270 and accompanying text.
285. See Correira, supra note 6, at 12 (noting that when an attorney owes a
duty to the trustee–client alone, the beneficiaries are not left without recourse);
Lee, supra note 4, at 491 (“The traditional theory permits a beneficiary to seek a
remedy for misconduct by bringing a claim against the fiduciary.”).
286. See Allen v. Stoker, 61 P.3d 622, 624 (Idaho Ct. App. 2002) (noting that
beneficiaries still have protection through the fiduciary’s ability to bring
malpractice claims against the fiduciary’s attorney); Lee, supra note 4, at 491
(explaining that the fiduciary may bring claims against the attorney for
malpractice that harms the estate).
287. See supra note 61 and accompanying text (discussing the fiduciary’s
duty to enforce claims on behalf of the trust).
288. See Allen, 61 P.3d at 624 (emphasizing the ability of beneficiaries to
bring claims against the fiduciary for breach of fiduciary duty); Trask v. Butler,
872 P.2d 1080, 1085 (Wash. 1994) (“[A] duty is not owed from an attorney hired
by the personal representative of an estate to the estate or to the estate
beneficiaries . . . [because] the estate heirs may bring a direct cause of action
against the personal representative for breach of fiduciary duty.”); Correira,
supra note 6, at 12 (explaining that beneficiaries “can pursue an action directly
against the trustees if they can show a breach of their fiduciary duties” (quoting
Spinner v. Nutt, 631 N.E.2d 542, 547 (1994))); Lee, supra note 4, at 491
Many also argue that, due to beneficiaries’ vulnerable
position, an attorney should have the discretion to disclose
breaches of the fiduciary-client’s duties to beneficiaries.289
Allowing discretionary disclosure, however, threatens complete
and honest communication between attorney and fiduciary.290
Thus, although an attorney’s discretionary disclosure is touted as
a protection for beneficiaries, it actually imposes a detriment.291
In addition, the traditional approach continues to prevent
attorneys from aiding in or counseling the fiduciary-client to
commit a breach of fiduciary duty in most circumstances.292 If an
attorney knowingly aids the fiduciary in a breach of fiduciary
duty, then the attorney is liable to the beneficiaries.293 If,
(emphasizing beneficiaries’ ability to sue the fiduciary (quoting Allen)); Tuttle,
supra note 2, at 943 (“Finally, beneficiaries already have a right of redress for
fiduciary misconduct: they can assert claims against the fiduciary.”).
289. See Fuller, supra note 5, at 64 (advocating for a pass through privity
approach to apply duties to a fiduciary’s attorney owed to beneficiaries, which
would require disclosure of “all information pertaining to the estate
administration”); Lee, supra note 4, at 489 (“Advocates of modification claim
that there are circumstances in which an attorney should be permitted to inform
the beneficiary of a fiduciary’s misconduct.”); id. (arguing that states should
“amend their rules to permit [disclosures]” of “fraudulent activity or another
activity that may result in a substantial loss to the beneficiary”); Tuttle, supra
note 2, at 954 (“Model Rule 1.6 should be changed to permit the lawyer
discretion to disclose a fiduciary’s breach of duty.”).
290. See supra notes 262–266 (detailing the benefits of open and honest
291. See supra note 266 and accompanying text (explaining that
beneficiaries’ interests receive greater protection when the fiduciary is
encouraged to communicate fully and honestly with the attorney).
292. See MODEL RULES OF PROF’L CONDUCT R. 1.2 (2012) (clarifying that an
attorney may be liable for counseling a client to breach or assisting in a client’s
breaching of a fiduciary duty if the breach is fraudulent or criminal);
RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 51 cmt. h (
(explaining that “[a] lawyer who assists a client to violate the client’s fiduciary
duties is civilly liable”).
293. See RESTATEMENT (THIRD) OF TRUSTS § 108 cmt. b (2012) (noting that a
third party is not liable to the trust for claims brought by beneficiaries if he
unknowingly aided the trustee in breach of fiduciary duty); RESTATEMENT
(SECOND) OF TORTS §§ 874, 876 (1979) (explaining that a fiduciary is subject to
liability “for harm resulting from a breach of duty” and a third party is also
liable for such breach if the third party knows the fiduciary is breaching a duty
and “gives substantial assistance or encouragement”); Tuttle, supra note 2, at
901 (“Although the third party owes no fiduciary duties to the beneficiary, she
may be liable to the beneficiary if she knowingly participates in the fiduciary’s
breach or gives substantial assistance or encouragement to the fiduciary in
however, an attorney assists in a breach of fiduciary duty
unknowingly, then the attorney is not liable for such breach.294
These principles reflect the prevailing legal standards of torts
and trusts, which are undisturbed by an application of the
Under the traditional approach, the fiduciary’s attorney also
must not make affirmative representations that he is
representing or protecting the beneficiaries’ interests.296
Therefore, an attorney may still be liable to beneficiaries if the
attorney has made representations that he is protecting the
beneficiaries’ interests and, in reliance on those representations,
the beneficiaries are injured by the attorney’s negligence.297
The costs of imposing a duty on a fiduciary’s attorney owed to
beneficiaries may have some benefits that are not integrated into
the traditional approach, but those benefits do not outweigh the
costs.298 The traditional approach provides significant advantages
while simultaneously protecting beneficiaries’ interests and
providing adequate remedies for any breach of duties owed to
them.299 The lack of uniformity across states concerning this issue
creates the possibility for substantial liability that attorneys are
breaching his duty.”).
294. See RESTATEMENT (THIRD) OF TRUSTS § 108 (“A third party is protected
from liability in dealing with or assisting a trustee who is committing a breach
of trust if the third party does so without knowledge or reason to know that the
trustee is acting improperly.”).
295. See supra notes 292–294 (describing how tort law and trusts law work
together to impose liability for breach of fiduciary duty on a third party,
including an attorney, who knowingly assists in such breach).
296. See supra notes 218–220 and accompanying text (explaining that
making “affirmative representations of care” may violate the attorney’s duty to
avoid making misleading or false statements to any nonclient).
297. RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 51 cmt. e
(“Accordingly, the nonclient has a claim against the lawyer if the lawyer's
negligence with respect to the opinion or other legal services causes injury to the
298. See supra notes 228–258 and accompanying text (outlining the costs
and benefits of imposing duties on a fiduciary’s attorney owed to beneficiaries).
299. See supra Part V.C (noting the benefits of the traditional approach and
its protections afforded to beneficiaries).
II. The Range of Duties and Liability Exposure ................2613 A. Attorney 's Liability Exposure to Fiduciary-Client ....................................................... 2613 1. Attorney's Duty of Care and Professional Negligence..................................... 2614 2 . Attorneys' Fiduciary Duties to Clients.............. 2615 3. Blurred Distinctions Between the Duty of Care and Fiduciary Duties ............................ 2617 B. Fiduciary-Client's Liability Exposure to Beneficiaries ............................................................2618
III. One Approach: Attorney Owes Some Form of Duty to Fiduciary-Client's Beneficiaries ...................2621 A. Imposition on Attorneys of Duties Owed to Clients' Beneficiaries ........................................... 2621 B. Differing Duties an Attorney May Owe to Beneficiaries ........................................................2628
IV. The Traditional Approach: Attorneys Owe No Duties to Beneficiaries...................................................2631 A. Cases Supporting the Traditional Approach ..........2631
B. State Statutes and ABA Formal Opinion 94-380 .........................................................2638
C. Attorney's Duties to Third Parties Generally .................................................................2642
V. Advantages and Disadvantages of Each Approach ........................................................................2645 A. Advantages of Imposing Duties............................... 2645 B. Disadvantages of Imposing Duties.......................... 2647 C. Advantages of Applying the Traditional Approach.................................................................. 2650 D. Disadvantages of Applying the Traditional Approach ..............................................2651
VI. Recommendation ...........................................................2652 79 . See id. (explaining the defendants' fear of creating conflicts of interest
beneficiaries on a fiduciary's attorney . Infra notes 240-245 . 80 . See Am . Kennel Club Museum of the Dog v . Edwards & Angell , LLP ,
No. Civ . A. PB 00-2683 , 2002 WL 1803923, at *7 (describing the defendants'
explanation of the co-trustees interests) . 81 . See id. (explaining the Dog Museum's interests) . 82 . See id. at *9 (rejecting Wells Fargo Bank v . Super. Ct., 990 P. 2d 591
(Cal . 2000 ), and Huie v. Deshazo , 922 S.W.2d 920 ( Tex . 1996 )). 83 . Id . (quoting Huie v . Deshazo , 922 S.W.2d 920 , 921 (Tex. 1996 )). 84 . Id . 85 . Id . 86 . See id. (noting the court's determination of standing) . The court's
and fiduciary duty . Supra notes 37-43 and accompanying text . 87 . 839 P. 2d 1303 ( Nev . 1992 ).