Can a lawyer arrange for estate appraisers to undervalue property to dodge inheritance tax, and bill for that effort?

Plain-English summary

The Board was asked whether it is ethical for a lawyer handling the probate of an estate to arrange with the appraisers to value the estate's property at a much lower figure than it was worth, so the estate would avoid paying Oklahoma inheritance tax, and whether the lawyer may take his efforts in that respect into account in fixing his fee.

The Board prefaced its answer by quoting the preface to Volume 1 of its Advisory Opinions, explaining that a question that seems frivolous or obvious to older or well-trained members may present a serious problem to younger members without ethical training, so the Board would be slow to treat any question as frivolous. It then held that the proposed conduct would constitute a fraud upon the county court and upon the State of Oklahoma and would subject the offending member to disbarment. The Board pointed to the part of Rule 17 providing that the office of attorney does not permit, much less demand, of him for any client a violation of law or any manner of fraud or chicane. That holding answered the second part of the inquiry, about the fee, in the negative.

Currency note

This opinion was issued in 1936, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. The principle that a lawyer may not assist a client's fraud on a tribunal persists in modern rules, though the rule text and numbering have changed. Subsequent rule amendments and 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 Treat this page as historical context, not current guidance.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: Can a lawyer arrange a deliberately low estate appraisal to reduce inheritance tax?

A: No. The opinion held that arranging appraisers to value property far below its worth to escape inheritance tax would be a fraud on the county court and the State, subjecting the lawyer to disbarment.

Q: Can the lawyer bill for the work of arranging the undervaluation?

A: No. The Board answered the fee question in the negative; the lawyer may not take such efforts into account in fixing his fee.

Q: What rule did the Board rely on?

A: Rule 17, providing that the office of attorney does not permit, much less demand of him for any client, violation of law or any manner of fraud or chicane.

Background and rules framework

The opinion applied Rule 17 of the canon-era Oklahoma Rules of Professional Conduct, which provides that the office of attorney does not permit or demand, for any client, a violation of law or any manner of fraud or chicane. It predates the Model Rules and made no Model Rule citation.

Citations and references

Rules of Professional Conduct:

• Rule 17 (1929 Oklahoma Rules of Professional Conduct): the office of attorney does not permit, much less demand of him for any client, violation of law or any manner of fraud or chicane.

See also

• Okla. Bar Ethics Op. 23: False denial or plea of payment to delay judgment
• Okla. Bar Ethics Op. 14: Representing a loan company and usurious interest

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-121/

Original opinion text

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

Adopted September 25, 1936

The following inquiry has been submitted to the Board:

"Is it ethical for a member of the bar, in handling the probate of an estate, to arrange with the appraisers to appraise and put a valuation on the property of the estate at a much lower figure than it was worth, in order that the estate would not be required to pay an inheritance tax to the State of Oklahoma: and is it proper for him to take his efforts in this respect into consideration in fixing his fee?"

In response:

It was in respect to such an inquiry that it was said in the preface to Vol. 1 of Advisory Opinions:

"To the older members of the bar and to those members schooled in the best traditions of the profession some questions asked may appear to be frivolous or the answers thereto obvious. The Board reserves the right to reject or ignore questions of that character; but at the same time those questions so appearing to some members of the bar may really present serious problems to the younger members of the bar who have been without the advantage of ethical training. The Board will therefore be slow to construe a question as frivolous or the answer thereto to be obvious."

The conduct proposed in the inquiry would constitute a fraud upon the county court and upon the State of Oklahoma and would subject the offending member of the bar to disbarment.

It ought not be necessary to refer to that part of Rule 17 of the Rules of Professional Conduct which provides:

"The office of attorney does not permit, much less does it demand of him for any client, violation of law or any manner of fraud or chicane."

The foregoing answers the second part of the inquiry in the negative.