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                                        145 N.J.L.J. 1501
                                        September 30, 1996

                                        5 N.J.L. 2095
                                        September 30, 1996

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the New Jersey Supreme Court

OPINION 683

Conflict of Interest - Attorney/Scrivener
Serving as Fiduciary for Client

    The inquirer asks whether, as scrivener of a client's will, he may properly accept appointment as executor. The inquirer expresses concern that such action may be thought to violate RPC 1.8(c), which provides:
        A lawyer shall not prepare an instrument giving the lawyer, or a person related to the lawyer as parent, child, sibling, or spouse, any substantial gift from a client, including a testamentary gift, except where the client is related to the donee.

    Granting that fiduciary commissions may be "substantial" in an estate or trust administration, such commissions are in no way a gift, but represent payment earned for services rendered.
    This conclusion is specifically assumed by N.J.S. 3B:18-6 which sets forth:
        If the fiduciary is a duly licensed attorney of this State and shall have performed professional services in addition to his fiduciary duties, the court shall, in addition to the commissions provided by this Chapter, allow him a just counsel fee. If more than one fiduciary shall have performed the professional services, the court shall apportion the fee among them according to the services rendered by them respectively.

    The statute has been instrumentally implicated in two leading New Jersey cases. In the first, In re Estate of Simon, 93 N.J. Super. 579, 585 (App. Div. 1967), the Court remarked, in evaluating a request for counsel fees, that it was appropriate for the judiciary to take into consideration that counsel "also received an allowance in his capacity as co-executor." The governing statute, it was said, in authorizing allowances for legal services, "implicitly casts upon the Court the duty of determining whether such a fiduciary has performed professional services in addition to his fiduciary duties."
    In a later case, the Appellate Division also established as a concomitant prerequisite that, "in appraising the value of legal services to an estate, such services must be segregated from services by the attorney rendered as a fiduciary, for which he is separately compensated by commissions on corpus and income." In re Estate or Seabrook, 127 N.J. Super. 135, 147 (App. Div. 1974). See also, 7A N.J. Prac. §1546, Wills and Administration, Clapp and Black (Revised 3rd. ed. 1984).
    The Committee's conclusion is that, subject to the applicable statutory and substantive case law, as a matter of professional ethics, a scrivener may properly prepare a will naming himself as a fiduciary, and may properly be paid for services in both capacities. In so doing, counsel should be particularly aware of the disclosure and consultation instructions set forth in RPC 1.7(b)(2).
    That said, however, the Committee believes it may be helpful to the Bar to go somewhat beyond the specific inquiry. The overall issue of attorneys serving as fiduciaries has been the subject of considerable discussion, some heated, in other states and nationally.
    Canon 5-6 of the Code of Professional Responsibility of the American Bar Association provides that an attorney shall "not consciously influence a client to name him as an executor (or) trustee." If the client does request the lawyer to act, the attorney must "avoid even the appearance of impropriety." In that context, we believe counsel should take care to advise the client as to alternatives and as to the attorney's compensation in both capacities. In some jurisdictions, but not New Jersey, this approach has been codified by requiring the attorney not only to make extensive disclosure, but also to enter into a written understanding with the client.
    The foregoing comments have been derived partly from the 1993 Draft Statement of the American Bar Association Task Force on Attorneys Acting in Other Fiduciary Roles. This critique will, observes one commentator "have a major impact on the time-honored practices of attorney-draftsmen who become fiduciaries."I Financial and Estate Planning §70.30 (1993). We have also had reference to Professor John R. Price's Commentaries on the Model Rules of Professional Conduct (1993), which were formally adopted by the members of the American College of Trust and Estate Counsel. Finally, throughout the New Jersey Rules of Professional Conduct, openness and full disclosure, as between attorney and client, are repeatedly advanced as essential parts of the relationship. See RPC's 1.4(b), 1.7(a)(2), 1.7(b)(2), 1.8(a)(1), 1.8(f)(1), 1.9(a)(1) and 2.3(a)(3). Careful adherence to these rules and to the spirit of these rules may often deter later charges (whether merited or not) of negligence, breach of loyalty or overreaching.
    Such charges can be especially difficult to meet where the lawyer can no longer rely upon the confidence of the perhaps long time (now deceased) client and must deal instead with others who may feel at best indifferent, and at worst suspicious, of the attorney/scrivener/fiduciary.
    The Committee should not be understood by the foregoing to inferentially criticize attorneys who accept fiduciary appointments from their clients. Qualified lawyers are well able to act as executors or trustees. Often, by reason of long knowledge of the client and family circumstances, counsel may be the very best choice. As in all other attorney-client dealings, however, counsel must be careful to avoid any improper or intrusive appearance. A record which amply demonstrates the lawyer's sensitive attention to these details should go far in deflecting unwanted difficulties.

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