Part II - Estate Planning Attorney Disqualified from Representing A Client with Adverse Interests To Former Client

To continue our blog on Fiduciary Trust International of California v. Superior Court, Betty Brown (decedent), changed her will after Willet's death. Instead of leaving the majority of Betty's assets to the Exemption Equivalent Trust that would benefit all of Willet's children, including those from a previous marriage, Betty drafted a new instrument that transferred a large majority of her assets to a trust that would benefit her daughter. However, after Betty's death in 2011, a dispute arose between Betty's personal representative, Fiduciary Trust International of California, and the trustees of the marital trust regarding the payment of taxes amounting to approximately $27 million that were due on Betty's assets. As can be recalled, Willet's will provided that the trustees of the Marital Trust were to pay all "legally enforceable claims against her or her estate, expenses of administration and any estate or inheritance taxes payable by reason of her death, including interest and penalties, from either income of the Marital Trust… unless other adequate provisions shall have been made therefore." However, the trustees of the marital trust refused to pay the portion of taxes attributable to Betty's trust. Fiduciary argued that Willet's will directed for the payment of such taxes… unless other adequate provisions have been made. Fiduciary also argued that the Betty Brown Trust included specific language clarifying that Betty had made no other provisions for the payment of estate and inheritance taxes.

Fiduciary also filed a motion to disqualify Sandler & Rosen, stating that the firm was disqualified from representing the trustees of the marital trust based on Sandler's representation of Betty. The trial court denied the motion and Fiduciary petitioned the California Court of Appeal for a writ of mandate compelling the trial court to vacate its ruling and enter a new order disqualifying Sandler & Rosen.

Stay tuned for more on this topic on our subsequent blog.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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