The Supreme Court of Washington upholds the two-year suspension of an attorney who named himself as the successor trustee of a special needs trust and then charged for trustee fees and legal work before the original trustee resigned. In The Matter of the Disciplinary Proceeding Against Alan F. Hall (Wash., No. 201,255-8, July 10, 2014).
In 2008, Margaret Keen, a 91-year-old with poor eyesight, and her 65-year-old son Stephen, who has physical disabilities, engaged attorney Alan Hall to prepare Ms. Keen's will, power of attorney, living will and a special needs trust for a flat fee of $3,000. Ms. Keen was named as the initial trustee of the special needs trust and Attorney Hall was named the successor trustee. Attorney Hall was also named as Ms. Keen's successor executor, successor attorney-in-fact and successor health care agent, after Stephen. The trust provided that if Attorney Hall served as trustee, he would be paid $8,000 or 2 percent of the trust corpus per year, whichever was greater, and both the will and the trust specified that Attorney Hall could also charge for legal services provided outside of his role as trustee or executor. Because Ms. Keen could not see the documents, Attorney Hall explained some of the provisions to her, but he did not read out loud the documents or the informed consent letter he drafted.
In December 2008, Attorney Hall wrote a memorandum to himself as trustee of the special needs trust explaining his role as trustee of a special needs trust, and he billed Ms. Keen for preparing and reading the memorandum, even though Ms. Keen was still serving as trustee. At the end of December, Attorney Hall requested and received $2,050 -- $49 to fund the trust and $2,001 as his quarterly trustee fee. Ms. Keen resigned as trustee in January 2009.
In March 2009, Stephen asked another attorney to review the estate planning documents and, upon being told of Attorney Hall's outsized role in her estate plan, Ms. Keen had new documents drafted removing Attorney Hall from all the positions that he previously held. Informed of the new documents, Attorney Hall refused to return the earlier documents or the fee. Stephen filed a grievance with the state bar association, and several months later Attorney Hall visited the home of Ms. Keen's new attorney at night and threatened to sue her, telling her that she "had a lot to lose . . . a new baby and a young family and a big house." The bar association found that Attorney Hall violated rules prohibiting conflicts of interest and unreasonable fees, along with a rule requiring prompt return of original documents, and that he had engaged in conduct prejudicial to the administration of justice. It recommended a two-year suspension that was adopted by the disciplinary board. Attorney Hall appealed.
The Supreme Court of Washington upholds the suspension, finding that "there is substantial evidence that Hall did not obtain informed consent to his acquiring a pecuniary interest in Margaret's estate in the form of an $8,000 per year trustee's fee . . . " because there was evidence that "Margaret had difficulty even reading the documents she signed and that Hall failed to read them out loud, word for word." The court also finds that "[b]ecause he was not legally trustee in December 2008, he could not hire himself to perform legal work for the Trust or the estate. He was therefore not entitled to collect these fees as either an attorney or a trustee."
To read the full text of the decision, go to: https://www.courts.wa.gov/opinions/pdf/2012558.pdf
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