My client, an estate administrator, told me she used estate funds to pay her own medical bills and plans to pay it back but can't prove she can. I'm preparing the final accounting. Do I have to tell the probate court?

Plain-English summary

The inquiring attorney represents the administrator of a decedent's estate in probate court and is preparing to close the estate. While gathering financial information for the accounting, the administrator disclosed that she had borrowed the estate account's assets to pay her own medical expenses. She indicated an intent to replace the funds but offered no evidence of the ability to do so.

The panel applied Rule 1.6, which bars a lawyer from revealing information relating to a client's representation absent informed consent or a listed exception. The panel found the administrator's disclosure is information relating to the representation and that none of Rule 1.6(b)'s exceptions (preventing imminent death or bodily harm, the lawyer's own claim or defense, seeking compliance advice, or complying with law or a court order) applied on these facts, so the attorney may not disclose the diversion to the court or to anyone else absent the client's consent. The panel cited its own prior opinions reaching the same result in analogous fact patterns: Opinion 94-78 (Rule 1.6 barred disclosing that an attorney-executor may have diverted estate funds), Opinion 96-08 (Rule 1.6 barred disclosing that a client diverted funds in violation of a court order), and Opinion 99-06 (a lawyer could not disclose that a client sentenced to a drug treatment facility had left it). The panel added that the attorney faces a bind on the accounting itself: Rule 1.6 bars filing an accounting that discloses the diversion without consent, but Rule 3.3(a) (candor to the tribunal, barring false statements or offering evidence known to be false) and Rule 1.2(d) (barring assisting client conduct the lawyer knows is criminal or fraudulent) bar filing an accounting that conceals it. The panel resolved this by advising the attorney to seek to withdraw from the representation.

In practice

The opinion holds that a client's disclosure of financial misconduct relating to the representation, even misconduct against a court-supervised estate the lawyer is helping to administer, remains protected under Rule 1.6 and cannot be disclosed to the court or third parties absent the client's consent. Where the lawyer cannot file an accurate accounting without disclosing the misconduct (barred by Rule 1.6) and cannot file one that hides it (barred by Rule 3.3(a) and Rule 1.2(d)), the opinion holds the lawyer's path is to withdraw from the representation rather than choose between those two prohibited options.

Common questions

Q: My client, an estate administrator, admitted diverting estate funds for personal use. Do I have to report this to the probate court?

A: No. The opinion holds this disclosure is protected under Rule 1.6, and the attorney may not reveal it to the court or anyone else without the client's consent.

Q: Can I file an accounting that just leaves out the diverted funds to avoid the conflict?

A: No. The opinion holds Rule 3.3(a)'s candor-to-the-tribunal duty and Rule 1.2(d)'s bar on assisting client fraud prevent filing an accounting that conceals the diversion, just as Rule 1.6 prevents filing one that discloses it without consent.

Q: If I can't disclose and I can't file an accurate accounting, what do I do?

A: The opinion advises the attorney to seek to withdraw from the representation, since continuing would require either a prohibited disclosure or a prohibited false or incomplete filing.

Background and rules framework

The opinion applies Rhode Island Rule 1.6 (Confidentiality of Information), barring disclosure of information relating to a client's representation absent informed consent or a listed exception, none of which the panel found applicable. It also applies Rule 3.3(a) (Candor Toward the Tribunal), barring a lawyer from making a false statement of fact or law to a tribunal or offering evidence the lawyer knows to be false, and Rule 1.2(d), barring a lawyer from assisting a client in conduct the lawyer knows is criminal or fraudulent.

Citations and references

Rules of Professional Conduct:

• MR 1.6(a)-(b) (confidentiality of information; exceptions to disclosure)
• MR 3.3(a) (candor toward the tribunal; no false statements or evidence)
• MR 1.2(d) (no assisting client crime or fraud)

Statutes:

• None cited.

Cases:

• None cited.

Other opinions cited:

• Rhode Island Supreme Court Ethics Advisory Op. 94-78 (1994): Rule 1.6 prohibited a lawyer from disclosing that an attorney-executor may have diverted estate funds.
• Rhode Island Supreme Court Ethics Advisory Panel Op. 96-08 (1996): Rule 1.6 prohibited an attorney from disclosing that a client diverted funds in violation of a court order.
• Rhode Island Supreme Court Ethics Advisory Panel Op. 99-06 (1999): a lawyer was prohibited from disclosing that a client sentenced to a drug treatment facility had left the facility.

See also

• California Formal Op. 1988-096: The disclosure would breach the attorney's duty to maintain the confidence and to preserve the secrets of the client; the attorney must seek to withdraw from employment
• Alabama Ethics Op. 2010-03: Representation of an Estate and Client Identity

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2014-04.pdf

Original opinion text

Final

                         Rhode Island Supreme Court
                       Ethics Advisory Panel Op. 2014-04
                               Issued May 8, 2014

FACTS

    The inquiring attorney represents the administrator of a decedent's estate in

probate court. The inquiring attorney states that he/she is preparing to close the estate. In
order to prepare an accounting, the inquiring attorney asked the administrator for
financial information pertaining to the estate. The administrator disclosed to the
inquiring attorney that he/she borrowed the assets of the estate account to pay for the
administrator's own medical expenses. The inquiring attorney states that the
administrator indicates an intent to replace the borrowed funds but that she has provided
no evidence of ability to do so.

ISSUE PRESENTED

   The inquiring attorney asks whether he/she is permitted or required to disclose to

the probate court or others the fact that the administrator has diverted the estate's funds.

OPINION

    The administrator's disclosure to the inquiring attorney that he/she has diverted

the estate's funds is a confidential communication which is protected pursuant to Rule
1.6. The inquiring attorney is not permitted to reveal the administrator's disclosure
without the client's consent.

REASONING

    Rule 1.6 of the Rules of Professional Conduct states as follows.

           Rule 1.6. Confidentiality of information. (a) A lawyer shall
           not reveal information relating to the representation of a
           client unless the client gives informed consent, except for
           disclosures that are impliedly authorized in order to carry out
           the representation, and except as stated in paragraph (b).

           (b) A lawyer may reveal such information to the extent the
           lawyer reasonably believes necessary:

Final Op. #2014-04
Page | 2

                     (1) to prevent the client from committing a criminal act
                 that the lawyer believes is likely to result in imminent death
                 or substantial bodily harm;
                     (2) to establish a claim or defense on behalf of the lawyer
                 in a controversy between the lawyer and the client, to
                 establish a defense to a criminal charge or civil claim against
                 the lawyer based upon conduct in which the client was
                 involved, or to respond to allegations in any proceeding
                 concerning the lawyer's representation of the client;
                     (3) to secure legal advice about the lawyer's compliance
                 with these Rules; or
                     (4) to comply with other law or a court order.

           In this inquiry, the administrator's disclosure to the inquiring attorney that he/she
  used the estate's funds to pay for the administrator's own medical expenses is
  information relating to the representation of a client. The information is therefore
  protected from disclosure unless the exceptions stated in Rule 1.6(b) apply, including
  disclosures that are permitted or required by court order, or other law.

           None of the exceptions to Rule 1.6 applies to the facts presented in this inquiry.
  Therefore, the inquiring attorney is not permitted to disclose the administrator's
  misconduct to the court, or to others, without the client's consent. See Rhode Island
  Supreme Court Ethics Advisory Op. 94-78 (1994) (Rule 1.6 prohibited lawyer from
  disclosing that attorney-executor may have diverted estate funds); Rhode Island Supreme
  Court Ethics Advisory Panel Op. 96-08 (1996) (Rule 1.6 prohibited attorney from
  disclosing that client diverted funds in violation of court order); Rhode Island Supreme
  Court Ethics Advisory Panel Op. 99-06 (1999) (lawyer prohibited from disclosing that
  client, who was sentenced to drug treatment facility, left facility.)

          The inquiring attorney may not file with the probate court an accounting which
  discloses the administrator's use of the funds without the client's consent. See Rule 1.6.
  Neither may the inquiring attorney file with the court an accounting that does not disclose
  the diversion of the funds. See Rule 3.3(a) (lawyer shall not knowingly make false
  statement of fact or law to a tribunal, or offer evidence lawyer knows to be false.); Rule
  1.2(d) (lawyer shall not assist client in conduct lawyer knows to be criminal or
  fraudulent.) Based on the facts as presented, the Panel advises the inquiring attorney that
  Rule 1.6 prohibits him/her from disclosing the administrator's misconduct without the
  client's consent, and further advises the inquiring attorney to seek to withdraw from the
  representation.