The Second District holds there is no duty to the potential beneficiary of an unexecuted estate plan.
Carlyle Hall had known Alexandra Turner for several decades when Hall successfully petitioned for conservatorship based on Turner’s behavior, which showed signs of dementia.
Hall contacted Kalfayan, the probate attorney appointed by the court in the conservatorship proceeding, and told him that he wished to proceed with a petition for substituted judgment and to obtain court approval of an estate plan. Kalfayan met with Turner and she expressed the desire at one point to leave her entire estate to Hall and at another time to leave more than half her estate to Hall and less than half to her niece.
After numerous delays Kalfayan prepared various estate plans and filed a petition for substituted judgment. The process was further delayed when Turner’s niece filed objections to the petition. Through the niece Kalfayan located a prior estate plan that made no gift to Hall. Ms. Turner died prior to court approval of a new estate plan.
Hall sued Kalfayan for legal malpractice alleging that his failure to perform his services in a timely manner deprived him of the majority of Turner’s estate. The Court of Appeal approved the trial courts grant of summary judgment premised on the lack of duty to Hall.
California recognizes that in some circumstances an attorney can owe a duty to a non-client. The determination involves the balancing of various factors: the extent to which the transaction was intended to affect the plaintiff; the foreseeability of harm to the plaintiff; the degree of certainty that the plaintiff suffered injury; the closeness of the connection between the defendant’s conduct and the injury suffered; the moral blame attached to the defendant’s conduct; the policy of preventing future harm; and whether the recognition of liability will impose an undue burden on the profession.
In the estate planning context, the basis for extending tort liability to an intended beneficiary is a breach of duty owed directly to the beneficiary. Harm is foreseeable because the attorney’s actions and omissions will affect the success of the client’s testamentary plan. The possibility of injury to an intended beneficiary is also foreseeable. However, cases extending liability are limited to circumstances where the testamentary instrument has been executed but the will or trust is negligently prepared frustrating the testator’s intent.
By contrast, courts have refused to extend liability based on an unexecuted estate plan. Practical and policy reasons require more evidence of commitment than is furnished by a direction to prepare a will containing specified provisions. It is common for potential testators to change their minds more than once after the first meeting. This can also occur after execution of an estate plan, but there is significantly stronger support for an inference of commitment in a signature on testamentary documents than in a preliminary direction to prepare documents. Courts must also consider the potential for misunderstanding and the difficulties of proof given that disputes will not arise until the testator is no longer available to express what he or she intended. Further, imposition of liability could improperly compromise an attorney’s primary duty of undivided loyalty to the client as the attorney rushes an estate plan to avoid liability to a potential beneficiary.
Thus, Kalfayan did not owe Hall, as a potential beneficiary, a duty to complete a new estate plan for Turner before her death. Kalfayan’s only duty was to the conservatorship.
In addition Turner had not personally expressed a desire for a new estate plan and there was no certainty the court would have approved one. Extending liability could expose Kalfayan to liability to the beneficiaries of the existing estate plan, which is the type of unreasonable burden on an attorney that militates against expanding a duty to potential beneficiaries.
Comment: Courts draw a reasonable bright line rule precluding liability for claims of potential beneficiaries of an unexecuted estate plan.