Wills and estates: 5 key causes of claims

 

 

There are three times as many people over 65 living in BC today as compared to 35 years ago. As this upward trend is expected to continue, challenges to estate plans and to the validity of wills are expected to become more frequent. Wills and estates lawyers are vulnerable. Stay safe. Deliver the best services you can and learn where you are at risk. The number one cause of claims for wills and estates lawyers? Oversights — primarily clerical mistakes in drafting documents, and just forgetting to take some step that needs to be taken.

Learn more about each cause, including examples from actual claim files and a video story, below.

Pie chart: 5 key causes of claims for wills and estates

Date Range: 2003 - 2017

Find out more about each cause, including stories and videos of examples from our claim files, below.

These failures have nothing to do with your competence as a lawyer, but everything to do with how you manage the process of providing legal services. They break down as follows:

Not managing client expectations (42%)
You fail to appreciate the risk inherent in a client or their expectations of the legal process (38%), who is doing what (50%) or how much it’s going to cost (12%).

Claim file example
Lawyer settled a Wills Variation Act claim for her client. The client now alleges that she should have received a better settlement with more money.

Not managing third party expectations (35%)
You don’t appreciate that someone for whom you are clearly not acting thinks that you are somehow protecting their interests.

Claim file example
The settlor of a family trust instructed his lawyer to change the family members who were named as trustees. The lawyer had previously acted for certain family members on discrete personal matters. Following the settlor’s death, those family members dispute the validity of changes made to the trust itself, and assert that lawyer owed them some sort of duty.

Not managing the retainer (setting up or concluding) or emerging conflict effectively (23%)
At the start of the retainer, you don't adequately think through how you are going to deliver the legal services or if you are able to represent all parties (38%) or, once the legal work is done, you 'move on' without ensuring that the final wrap details are properly attended to (30%), or you fail to manage a conflict that emerges during the retainer (32%).

Claim file example
Lawyer acted for multiple parties in an estate plan that involved the transfer of a piece of property. One of the clients now claims she did not understand the nature of the transaction, and that she was unduly influenced by the other parties.

These reports involve failing to sort out the legal issues or strategies required to achieve a client’s goal.  They break down into two categories: 

Ignorance of the law (30%)
You don’t appreciate that you don’t know an area of law as well as you need to in order to provide proper advice.

Claim file example 
Lawyer, representing the executor and sole beneficiary of an estate, paid out all of the estate funds without realizing that a clearance certificate from Revenue Canada was required. There are now tax liabilities. .

Not thinking it through (70%)
You know the law, but don’t fully think through all of the legal issues, or what strategies to implement or steps to take to achieve your client’s goal.

Claim file example 
Lawyer drafted a will for a client that gifted all money on deposit at a specified credit union to his nephew. The client subsequently transferred that money to a different credit union. On the client’s death, the residuary beneficiaries under the will claim that the gift has lapsed and falls into the residue.

These failures in listening, asking and explaining often involve lawyers making assumptions that later prove wrong.  They break down into two categories:

Communication issues with clients (74%)
You don’t devote enough time or attention to ensure that a client understands you or provides you with the information that you need, or you fail to ask for instructions or consent.

Claim file example
Lawyer drafted a will for an elderly client, but failed to spend the time necessary to determine that a piece of property and a bank account were held in joint tenancy.

Communication issues with non-clients (26%)
You fail to communicate effectively with either other counsel on a matter or the other people on whom you rely to help you get the job done.

Claim file example
Lawyer was retained to act for the executor in a complicated estate plan. As a result of a miscommunication between the lawyer and the estate’s accountant, there are now tax problems.

Simple, inadvertent, oversights break down into 3 categories:

Flawed systems (12%)
These mistakes would have been avoided through an effective, firm wide system such as a system for cataloging receipt and storage of estate property. 

Claim file example
The records at the lawyer’s firm show that a client’s original will and codicil were last in possession at the firm. The client has died, but the lawyer cannot locate the original documents.

Sloppy practices or oops's (86%)
These include the unintentional clerical errors that we make when drafting documents (47%), the mistakes that would have been avoided with a careful review of relevant file material (7%) and the mistakes that occur because we just ‘drop the ball’ and forget or overlook some step that needs to be taken (46%). 

Claim file example
Lawyer drafted a will that inadvertently omitted the residue clause, resulting in a partial intestacy.

For a video claim file story, watch: How the ball was dropped

Delegation without supervision (2%)
You delegate a task to an assistant or a student who makes a mistake, but only because you failed to provide proper supervision.

Claim file example
Lawyer was retained to prepare a will for a client. The lawyer did not review the draft will and, while on vacation, his assistant and a junior lawyer met with the client to execute the will. The draft will contained errors. Following the client’s death, estate litigation ensues.

This relatively small risk has nothing to do with the quality of legal services you provide. These reports would have been avoided entirely if you simply had the necessary evidence to confirm advice that you gave (32%), instructions that you received (63%), or your dealings with other counsel and parties (5%).

Claim file example
Lawyer acted for a client on an estate plan. The client was advised to ensure that beneficiary changes were made in her life insurance policy and RRSP so that the estate plan would work as intended. The lawyer did not confirm this advice in writing, and the client did not make these changes. After the client’s death, litigation ensues.

Next Steps?

For the articles and publications that will help you avoid claims in your own practice, review:

Wills & estates – risks and tips to read about traps for executors, undue influence (onus of proof and best practices), changes to adult guardianship legislation and notes about the Representation Agreement Act
Limitations and deadlines
Practice management - risks and tips
Areas of law - risks and tips

And remember, effective risk management also requires you to understand what’s covered under the compulsory Policy – and what’s not.  See Cover Pages and My Insurance Policy: Questions and Answers for more information.

 

Last updated: June 2018