Getting Over the Hurdle of Attorney-Client Privilege in Trust and Will Cases in New York

Information that is subject to the attorney-client privilege is not subject to discovery in a legal proceeding. Fortunately, there are many exceptions that will allow us to get over the hurdle of attorney-client privilege when dealing with trusts and wills.

Information relating to the preparation of a will. Wills and revocable trusts. In any action involving the probate, validity or construction of a will or, after the grantor’s death, a revocable trust, an attorney or his employee shall be required to disclose information as to the preparation, execution or revocation of any will, revocable trust, or other relevant instruments, but he shall not be allowed to disclose any communication which would tend to disgrace the memory of the decedent. N.Y. C.P.L.R. 4503 (McKinney)

It will be VERY important to determine HOW the attorney was paid. Because, if he personally paid the attorney, ALL communications are no longer protected by privilege, as it is like it was waived. See below for more info. The seminal U.S. case on the fiduciary exception, Riggs Nat’l Bank v. Zimmer, 1976, 355 A.2d 709 (Del.Ch.), recognized the exception as an outgrowth of the law of trusts. Application of the exception depends upon the identity of the “real client” of the attorney. If counsel is advising the trustee (fiduciary) regarding his or her administration of the trust, and is paid out of trust assets, then the beneficiary of the trust is the attorney’s “real client,” thus triggering the exception. On the other hand, if the fiduciary consults with counsel to protect her personal interests, then the real client is the fiduciary in her individual capacity. This analysis was implicit in New York’s recognition of the fiduciary exception in Hoopes v. Carota, 1988, 142 A.D.2d 906 (3d Dep’t), affirmed, 1989, 543 N.E.2d 73.

Crime/Fraud Exception – if using an attorney for the purpose of committing a crime. (ask for an in-camera review). In re New York City Asbestos Litigation, 2013, 109 A.D.3d 7, 11 (1st Dep’t), adopted the same standard that is used in federal litigation. See United States v. Zolin, 1989, 109 S.Ct. 2619, 2632. Need an evidentiary showing “adequate to support a good faith belief by a reasonable person that in camera review of the materials may reveal evidence to establish the claim that the crime-fraud exception applies.”

Counsel’s time records and billing statements are not privileged if they are devoid of info regarding the nature of the legal services provided by counsel. See e.g., Eisic Trading Corp. v. Somerset Marine, Inc., 1995, 212 A.D.2d 451 (1st Dep’t). (“fee statements privileged since they did not contain detailed accounts of the legal services rendered”. See e.g.,DiBella v. Hopkins, 403 F.3d 102, 120-21, (2d Cir. 2005) (timesheet is not privileged)

Trust documented is no longer privileged, because its content has been photocopied. Third-party sharing kills privilege. Hence, they cannot claim a privilege of a document they released a copy of.  See Morgan v. New York State Dep’t of Envtl. Conservation, 779 N.Y.S.2d 643, 645 (2004) (withheld documents was carbon copied to a third party, thus destroying any privilege pertaining to that letter).

Trust documented is no longer privileged, because its content has been placed at issue. Meaning – they can’t use the documents as a sword (to prove trust/will), but then use the privilege defense as a shield. Am. Re-Ins. Co. v. U.S. Fid. & Guar. Co., 837 N.Y.S.2d 616, 622 (2007) (“Under the “at issue” doctrine, where a party places legal advice or other privileged facts or communication at issue, it is deemed to have waived the privilege with respect to such facts or communications and can be compelled to produce them.”)

New York trust laws are complicated, and experience in the Surrogate’s Court practice is paramount when dealing with those issues. Call the Law Offices of Albert Goodwin at (212) 233-1233, New York estate, guardianship, wills, trust, Medicaid and probate lawyer, and make an appointment to discuss your wills, trusts and estates issue.