South-Western Legal Studies in Business

Estate Planners Liable for Malpractice in Planning Estates Improperly
Description

Texas high court held that the attorneys who prepared a will were liable for negligence to the estate for malpractice in advice given in preparation of the estate. The executors of the estate have the right to sue the planners to recover the loss of value in the estate.

Topic Wills, Estates, and Trusts
Key Words

Estate; Executors; Attorneys; Negligence; Malpractice

C A S E   S U M M A R Y
Facts

Terk hired the attorneys at a law firm to prepare his will. After his death, his heirs became executors of his estate. The executors sued the attorneys for malpractice, contending they were negligent in planning the estate and in the advice they gave Terk. As a result, the estate incurred more than $1.5 million in tax liability that could have been avoided by competent estate planning. The trial court and court of appeals held for the attorneys, holding that there was no privity between the attorneys and executors, so the attorneys did not have a duty to the executors, so there was no claim of action even if there had been malpractice. Executors appealed.

Decision

Reversed and remanded. A legal malpractice claim accrues before the client’s death, where an estate planning attorney’s negligent drafting results in increased estate tax consequences. Hence, there is no legal bar that prevents an estate’s personal representative from maintaining a legal malpractice claim, on behalf of the estate, against the decedent’s estate planners, alleging depletion of the estate due to negligent tax planning.

Citation

Belt v. Oppenheimer, Blend, Harrison & Tate, 192 S.W.3d 780 (Sup. Ct., Texas, 2006)

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