After being discharged by the personal representative of an estate, what may a lawyer do about a suspected fraud, the decedent's children, and documents still in the file?

Plain-English summary

A lawyer was retained by a surviving spouse acting as personal representative of her late husband's estate. Old divorce-era documents (an unrecorded quitclaim deed, an undated promissory note, and a mortgage) concerning real estate the couple had shuffled between them sat in the former divorce lawyer's file. The inquiring lawyer's paralegal told the spouse and two of the decedent's children that the property would be probated. A child of the decedent (not of the spouse) later called questioning whether the couple had truly remarried; the lawyer said probate would be commenced and the caller should get independent counsel. The spouse then told the lawyer to stop all work, apparently consulted another lawyer who advised no probate was needed, and became unreachable. The inquiring lawyer asked about duties to notify the children, to record the deed to prevent a perceived fraud, to alert successor counsel, and to dispose of the documents.

The opinion first fixed the client: under MCR 5.117(A) and Formal Op R-10, the lawyer's client was the personal representative, not the beneficiaries. On notifying the children, the opinion concluded the lawyer had no obligation to do so because no legal duties had been undertaken for the children (MRPC 1.4 not triggered), and MRPC 4.1 was not violated because the lawyer did not know the earlier statement was false when made. The lawyer was not prohibited from telling the children probate would not be commenced, but could not disclose the reasons or circumstances.

On the suspected fraud, the opinion concluded the lawyer only suspected, and did not know, that the spouse was committing fraud, and noted innocent explanations existed. MRPC 1.2(c) imposed no affirmative duty to prevent a suspected fraud by recording the deed, and because the lawyer's services had not been used to further any suspected fraud, MRPC 1.6(c)(3) prohibited disclosing confidences or taking action to rectify; for the same reasons the lawyer could not tell successor counsel of the suspicions. On the documents, MRPC 1.15 required safekeeping: the lawyer had to hold the documents until directed by the former client (or a duly appointed successor personal representative) and had no duty or permission to return them to the referring divorce lawyer.

Currency note

This opinion was issued in 1993, before later amendments to the Michigan Rules of Professional Conduct. MRPC 1.6, 1.15, and the related rules have since been amended, and subsequent rule changes or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Who is the lawyer's client when a personal representative hires the lawyer for an estate?

A: The opinion concluded, citing MCR 5.117(A) and R-10, that the client is the personal representative as fiduciary, not the estate's beneficiaries.

Q: If a lawyer suspects a client is committing fraud but doesn't know it, can the lawyer disclose or try to stop it?

A: No. The opinion concluded that where the lawyer only suspects fraud and the lawyer's services were not used to further it, MRPC 1.6(c)(3) prohibits disclosing confidences or taking action to rectify.

Q: Must the lawyer correct the earlier statement to the children that probate would proceed?

A: No. The opinion concluded the lawyer had no obligation to correct it (the lawyer did not know it was false when made) but could notify the children probate would not proceed without disclosing reasons.

Q: Can the discharged lawyer return the file documents to the referring divorce lawyer?

A: No. Under MRPC 1.15 the opinion concluded the lawyer must hold the documents until directed by the former client or a duly appointed successor personal representative.

Background and rules framework

The opinion applied Michigan's confidentiality, client-property, and third-party rules. MRPC 1.2(c) (Model Rule 1.2) bars counseling or assisting known illegal or fraudulent conduct but imposes no affirmative duty to prevent a merely suspected fraud. MRPC 1.6(c)(3) (Model Rule 1.6) permits rectifying disclosure only when the lawyer's services were used to further the client's fraud. MRPC 1.15 (Model Rule 1.15) requires safekeeping of client and third-party property. MRPC 4.1 and 4.3 (Model Rules 4.1 and 4.3) govern truthfulness to and dealings with unrepresented persons. Michigan Court Rule 5.117(A) and Formal Op R-10 establish that estate counsel represents the personal representative.

Citations and references

Rules of Professional Conduct:

• MR 1.2 / MRPC 1.2(c) (not assisting fraud)
• MR 1.6 / MRPC 1.6(c)(3) (rectifying disclosure)
• MR 1.15 / MRPC 1.15 (safekeeping property)
• MR 4.1 / MRPC 4.1 (truthfulness to third persons)
• MR 4.3 / MRPC 4.3 (dealing with unrepresented persons)

Court rules:

• MCR 5.117(A) (counsel for the personal representative)

Other opinions cited:

• Michigan Formal Op. R-10: estate lawyer's client is the personal representative

See also

• Mich Ethics Op. R-10: wrongful-death counsel represents the personal representative
• Mich Ethics Op. RI-155: representing an estate and its medical creditors
• ABA Formal Op. 491: avoiding counseling or assisting a crime or fraud

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=1026&Type=6

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

RI-156

March 3, 1993

SYLLABUS

A lawyer retained by the personal representative of the decedent's estate is the lawyer for the personal representative as fiduciary and not for the estate beneficiaries.

A lawyer, who while acting for the surviving spouse has told the decedent's children that probate proceedings will be commenced, has no ethical obligation to advise the children to the contrary when the lawyer is discharged prior to probate proceedings being commenced. The lawyer is not prohibited from so advising the children but may not disclose the reasons or circumstances.

A lawyer who merely suspects, but does not know, that a client is engaged in fraud, is prohibited from disclosing confidences and secrets or from taking any action to rectify the suspected fraud. After discharge, the lawyer may not disclose such confidences and secrets to successor counsel without the client's consent.

A discharged lawyer may not transfer custody of real estate documents of a client that are in the lawyer's possession to one other than the client unless the client consents or the transfer is directed by court order.

References: MRPC 1.2(c), 1.6(c)(3), 1.15, 4.1, 4.3; R-10; MCR 5.117(A).

TEXT

The property settlement incorporated in the divorce judgment of a husband and wife provided for the assignment of certain real estate, then titled jointly in the names of the husband and wife as tenants by the entireties, to the surviving spouse. Subsequent to entry of the divorce judgment, the parties apparently agreed to a different dispositive arrangement under which the real estate would be transferred to the husband in return for delivery of a note and mortgage for the wife's benefit. In furtherance of this arrangement, the husband signed a promissory note and mortgage bearing a typed date; the signature was not witnessed or notarized, and the date of execution was not inserted. The wife subsequently executed a quitclaim deed to the husband which was notarized and witnessed but never recorded. The husband and wife later remarried.

The originals of the property documents remained in the custody of the husband's divorce lawyer, who on more than one occasion had requested instructions regarding the documents held in the file, but the husband never responded. The husband has subsequently died.

The decedent's divorce lawyer has referred the probate matter to the inquirer, who has been retained by the surviving spouse in her capacity as personal representative of the estate. The inquirer's paralegal met with the surviving spouse and two of the decedent's children to discuss the need to probate the real property and certain other personal property and to accept delivery of the property documents from the divorce lawyer. A few days after the meeting, the inquirer received a phone call from a child of the decedent but not of the surviving spouse, who asked about the status of the matter and questioned whether the decedent had in fact remarried the surviving spouse. The inquirer related that probate proceedings were going to be commenced, and that the caller should seek independent counsel regarding the caller's options.

The surviving spouse subsequently instructed the inquirer not to proceed with probate proceedings and to perform no further work on the file. The inquirer later learned that the surviving spouse had apparently contracted another lawyer who allegedly advised the surviving spouse that there was no need for probate. All subsequent attempts to reach the surviving spouse have failed.

The inquirer asks what are the ethical duties concerning:

• notifying the decedent's children that probate proceedings will not be commenced;

• recording the quitclaim deed with the register of deeds to prevent what the lawyer perceives may be the perpetration of a fraud;

• discovering the identity of the successor lawyer who counseled the surviving spouse for the purpose of advising the successor lawyer of what the lawyer perceives to be the facts and the law regarding the decedent's estate;

• returning the property documents to the decedent's divorce lawyer; and

• any other appropriate actions.

In order to answer the inquiry, it is necessary to determine who is the lawyer's client and to whom the lawyer owes ethical obligations. Recent case law has confused this issue, but MCR 5.117(A) makes it clear that the lawyer's client is the personal representative of the estate, not the beneficiaries. In accord, R-10.

With regard to notifying the decedent's children that probate proceedings will not be commenced, we note that MRPC 1.4 requires a lawyer to keep a client advised regarding the status of a matter. The facts do not suggest that the lawyer undertook any legal duties on behalf of the children, and thus MRPC 1.4 is not triggered. MRPC 4.3 forbids a lawyer dealing with an unrepresented person from stating or implying that the lawyer is disinterested, and imposes an affirmative duty on a lawyer to clarify the lawyer's role when it is misunderstood. MRPC 4.1 prohibits a lawyer from knowingly making false statements of material fact to a third person, but the inquirer did not know the statements were false when they were made. The Comment to MRPC 4.1 states:

"Making a false statement may include the failure to make a statement in circumstances in which silence is equivalent to making such a statement. Thus, where the lawyer has made a statement that the lawyer believed to be true when made but later discovers that the statement was not true, in some circumstances failure to correct the statement may be equivalent to making a statement that is false. When the falsity of the original statement by the lawyer resulted from reliance upon what was told to the lawyer by the client and if the original statement if left uncorrected may further a criminal or fraudulent act by the client, the provisions of Rule 1.6(c)(3) give the lawyer discretion to make the disclosure necessary to rectify the consequences."

Although the inquirer is not prohibited from correcting the message to the children, the inquirer has no ethical obligation to do so. Notification to the children that the inquirer will not be initiating probate proceedings, without disclosure of reasons or circumstances, would be not be unethical.

In the facts provided the inquirer infers that the surviving spouse may be perpetrating a fraud by not probating real estate which was the subject of an alleged transfer back to the decedent. The lawyer does not know that a fraudulent act is being committed by the surviving spouse. In fact, there are other possible explanations for the surviving spouse's actions. For instance, the decedent's failure to apprise or otherwise direct the divorce lawyer with regard to the property documents may be indicative of the fact that the parties have again changed their minds as to the disposition of the real estate. There being no specific instructions with respect to these documents, there remains the legal and factual question as to whether delivery was completed. MRPC 1.2(c) states:

"A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is illegal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good-faith effort to determine the validity, scope, meaning, or application of the law."

MRPC 1.2(c) would require a lawyer to counsel the surviving spouse regarding the consequences of any proposed course of conduct, including the decision not to commence probate proceedings. Under the facts presented, however, the inquirer has been discharged and the surviving spouse has apparently consulted other counsel. The inquirer has no further duty to counsel a client after discharge.

MRPC 1.2(c) does not impose an affirmative duty on behalf of a lawyer to prevent a suspected fraud by recording the quitclaim deed and mortgage transferring title to the decedent. Further, where the lawyer only suspects a fraudulent act and, as in this case, the inquirer's services have not been used to further any suspected fraud, MRPC 1.6(c)(3) prohibits a lawyer from disclosing confidences and secrets of the client or from taking any action to "rectify" the client's suspected conduct. For these same reasons, the inquirer does not have an ethical duty, and in fact is not permitted, to inform the successor lawyer of the inquirer's suspicions regarding the facts of this case and the legal implications.

Finally, MRPC 1.15 requires a lawyer to safekeep property of clients or third persons in the lawyer's possession in connection with a representation. In this case, the inquirer should hold the property documents until directed otherwise by the former client on whose behalf their delivery was accepted. The lawyer has no ethical duty to return the quitclaim deed, promissory note and mortgage to the referring lawyer, and has no permission to do so absent instructions from the former client or duly appointed successor personal representative.