Law Firm Need Not Explain Absence of Crummey Clause in Trust

Reversing the state appellate court, the Supreme Court of Michigan rules that under the "four corners" rule, a law firm is immune from malpractice for allegedly failing to recommend the inclusion of a Crummey clause in an irrevocable trust. Sorkowitz v. Lakritz, Wissbrun & Associates (Mich., No. 126562, Nov. 28, 2005).

Morris and Sarah Friedman hired the law firm of Lakritz, Wissbrun & Associates to draw up estate planning documents. The personal representative of Mrs. Friedman's estate and other plaintiffs filed a malpractice action against the law firm, alleging that its attorneys violated their duties and standard of care in failing to include a Crummey clause in an irrevocable trust, resulting in an increased liability to the estate of at least $1 million. Crummey v. Commissioner of Internal Revenue, 397 F.2d 82 (CA 9, 1968). The plaintiffs provided the affidavit of an expert attesting that the standard of practice requires that an attorney practicing in the estate planning field discuss and recommend the use of a Crummeyclause.

The law firm countered that only those who can establish, without the use of extrinsic evidence, that a decedent's intent has been frustrated by an attorney's negligent drafting have standing to sue. The circuit court agreed, but the Michigan Court of Appeals reversed, ruling that the law firm should explain in court the absence of the Crummeypowers. The appeals court held that extrinsic evidence may be brought to bear because "it ignores reality to dismiss legal malpractice cases such as this one based on the fiction that one cannot know the decedent's intent unless it is apparent within the four corners of the estate planning documents, without regard to common sense and expert opinion on estate planning matters."

In a two-sentence opinion, the Supreme Court of Michigan reverses, relying solely on the four-corners rule expressed in Mieras v. DeBona, 452 Mich 278 (1996). The full-text decision referenced below includes two dissents.

For the full text of this decision, click here.

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