What disclosure and judgment did the opinion require when an estate lawyer offered a client life insurance?

Plain-English summary

An estate-planning lawyer who was also licensed to sell life insurance sent a client a letter describing why insurance might be considered and offering to discuss it as an insurance agent. The letter disclosed transaction terms, suggested independent legal counsel, and stated that the lawyer would not act as legal counsel in the insurance transaction.

The opinion said the lawyer appeared to comply with Rule 4-1.8(a), except that the lawyer also had to expressly disclose the commission or other financial interest in the sale. Regardless of those steps, a recommendation based on anything other than genuine judgment that insurance was appropriate for that client would violate Rule 4-1.7(b).

Currency note

This 1994 opinion predates Missouri's 2007 amendments to its Rules of Professional Conduct. An official reference note identifies July 1, 2007 amendments to Rules 4-1.9 and 4-1.10. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context and verify current rules before relying on it.

Common questions

Q: Was the letter's existing disclosure sufficient under Rule 4-1.8(a)?

A: The opinion said the lawyer appeared to comply except for an express disclosure of the commission or other financial interest.

Q: When would the recommendation violate Rule 4-1.7(b)?

A: If it was made for reasons other than the lawyer's genuine judgment that insurance was appropriate for that client.

Background and rules framework

The opinion applied Rule 4-1.8(a) to the lawyer's proposed insurance transaction with a client and Rule 4-1.7(b) to the reason for recommending insurance.

Citations and references

Rules of Professional Conduct:

• Missouri Rule 4-1.8(a)
• Missouri Rule 4-1.7(b)

See also

• Missouri Informal Op. 950115: Insurance agent estate seminar
• Missouri Informal Op. 950145: Insurance agent will referral

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/940178/

Original opinion text

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

QUESTION: Attorney is also licensed to sell life insurance. After Attorney completes an estate plan for a client, Attorney sends a letter to the client outlining reasons why they may want to consider purchasing life insurance. Attorney indicates that Attorney, as an insurance agent would be happy to discuss this with them. In this letter, Attorney discloses the terms of the transaction, suggests that the client seek the advice of independent legal counsel and advises the clients that Attorney will not be functioning as their legal counsel in the insurance transaction. ANSWER: Attorney appears to be complying with the requirements of Rule 4–1.8(a) regarding business transactions with clients except, Attorney must expressly disclose that Attorney will be making a commission or have some other financial interest in the sale. Regardless of these steps, Attorney would violate Rule 4–1.7(b) if Attorney recommended life insurance for reasons other than Attorney´s genuine judgment that life insurance is appropriate for the particular client.