When a lawyer is asked by one person to prepare a will, trust, or power of attorney for someone else, who is the client and what must the lawyer do?

Plain-English summary

This opinion clarifies the scope of 2003 FEO 7, which held that a lawyer may not prepare a power of attorney for the benefit of the principal at another individual's request without consulting with, exercising independent professional judgment on behalf of, and obtaining consent from the principal. The question is whether that holding applies only to a power of attorney requested by the prospective attorney-in-fact, or more broadly to other documents that purport to speak solely for the principal (such as a will, advance directive, or trust) requested by another person.

The opinion concludes that 2003 FEO 7 applies to the preparation of all such legal documents for the principal at another's request. It restates the governing principles from 2003 FEO 7: when a lawyer is engaged by one person to render legal services to another, the lawyer may not let the third party direct or regulate the lawyer's professional judgment (Rule 5.4(c)), and when someone other than the client pays for the lawyer's services, the lawyer may not accept the compensation unless the client gives informed consent, there is no interference with the lawyer's independent judgment or the client-lawyer relationship, and the client's confidential information is protected (Rule 1.8(f)).

The opinion recognizes a clear exception for the business or commercial context. Where a lawyer is engaged by one person to prepare a power of attorney for execution by another, often naming the requester as the attorney-in-fact to facilitate a specific task such as transferring stock or real estate, the lawyer represents the person requesting the services and not the signatory; the purpose and goals of the engagement, not the signatory on the document, determine the identity of the client. The opinion also reiterates that if the circumstances give the lawyer a reasonable belief that the requester may be using the lawyer's services for an improper purpose, such as actual or constructive fraud or the exertion of undue influence, the lawyer may not assist and must decline or withdraw (Rules 1.2(d) and 1.16(a)(1)). In short, a lawyer should not undertake the representation or prepare a document for a client without first consulting the client to obtain informed consent and to determine whether the client needs or wants the requested services, and must exercise and convey independent professional judgment about the advisability and scope of those services.

In practice

Under the North Carolina rules as they stood at the time of the opinion, the analysis turns on identifying the client by the purpose of the engagement and on protecting the principal's independent judgment from a third party. The opinion holds that when a document speaks solely for a principal, that principal is the client, and the lawyer must consult the principal, obtain informed consent, and exercise independent judgment, regardless of who made the request.

Per the opinion, the requester may not direct the lawyer's judgment (Rule 5.4(c)) or pay for the work in a way that interferes with it (Rule 1.8(f)), and a reasonable belief that the requester seeks an improper purpose requires the lawyer to decline or withdraw (Rules 1.2(d) and 1.16(a)(1)); the business or commercial transaction is the recognized exception.

Common questions

Q: Does 2003 FEO 7 cover only powers of attorney, or other documents too?

A: Other documents too. The opinion concludes 2003 FEO 7 applies to the preparation of any document that purports to speak solely for the principal, such as a will, advance directive, or trust, requested by another person.

Q: When someone asks a lawyer to prepare a document for another person, who is the client?

A: The principal the document speaks for, in most cases. The opinion concludes the purpose and goals of the engagement, not the signatory, determine the client; the lawyer must consult that principal, obtain informed consent, and exercise independent judgment.

Q: Can the person who requests or pays for the document control the lawyer's work?

A: No. The opinion concludes the requester may not direct or regulate the lawyer's professional judgment (Rule 5.4(c)), and third-party payment is allowed only with the client's informed consent and no interference with the lawyer's independence (Rule 1.8(f)).

Q: What if the lawyer suspects the request is for an improper purpose?

A: The lawyer must decline or withdraw. The opinion concludes that if circumstances give a reasonable belief the requester is using the lawyer's services for fraud or undue influence, the lawyer may not assist and must decline or withdraw (Rules 1.2(d) and 1.16(a)(1)).

Q: Is there an exception for business deals?

A: Yes. The opinion recognizes that in a business or commercial transaction, where a lawyer prepares a power of attorney for a requester to facilitate a task such as a stock or real-estate transfer, the lawyer represents the requester, not the signatory.

Background and rules framework

The opinion applies North Carolina Rule 5.4(c) (no third-party direction of the lawyer's professional judgment), Rule 1.8(f) (conditions for accepting compensation from someone other than the client), and Rules 1.2(d) and 1.16(a)(1) (no assisting fraud; mandatory withdrawal where continuing would violate the Rules). These track Model Rules 5.4, 1.8, 1.2, and 1.16. The opinion extends the reasoning of 2003 FEO 7 from powers of attorney to other principal-speaking documents, while preserving the business-transaction exception.

Citations and references

Rules of Professional Conduct:

• MR 5.4 / NC Rule 5.4(c) (no third-party direction of professional judgment)
• MR 1.8 / NC Rule 1.8(f) (compensation from one other than the client)
• MR 1.2 / NC Rule 1.2(d) (no assisting fraud or crime)
• MR 1.16 / NC Rule 1.16(a)(1) (mandatory withdrawal)

Other opinions cited:

• NC 2003 FEO 7: a lawyer may not prepare a power of attorney for the principal at another's request without consulting, exercising independent judgment for, and obtaining consent from the principal.

See also

• NC 2003 FEO 7: Preparing a Power of Attorney at the Attorney-in-Fact's Request
• ABA Formal Op. 02-428: Drafting a Will on the Recommendation of a Beneficiary-Client

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2006-formal-ethics-opinion-11/

Original opinion text

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

Inquiry:

This inquiry seeks a clarification of the scope of 2003 Formal Ethics Opinion 7 which provides that a lawyer may not prepare a power of attorney for the benefit of the principal at the request of another individual without consulting with, exercising independent professional judgment on behalf of, and obtaining consent from the principal. The opinion responds to an inquiry involving the preparation of a power of attorney, the conduct of the attorney-in-fact, and the appropriate actions of the lawyer who is asked to prepare the power of attorney. The opinion provides as follows:

When a lawyer is engaged by a person to render legal services to another person, the lawyer may not allow the third party to direct or regulate the lawyer's professional judgment in rendering such legal services. Rule 5.4(c). Similarly, Rule 1.8(f) provides that when a lawyer's services are being paid for by someone other than the client, the lawyer may not accept the compensation unless the client gives informed consent, there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship, and confidential information relating to the representation of the client is protected…The situation described in this inquiry is distinguishable from a commercial or business transaction in which the lawyer is engaged by one person to prepare a power of attorney for execution by another person. Frequently, the power of attorney names the person requesting the legal services as the attorney-in-fact. If the document is being prepared to facilitate a specific task for the benefit of this person, such as the transfer of stock or real estate, the lawyer represents the person requesting the legal services and does not represent the signatory on the power of attorney. Thus, the purpose and goals of the engagement determine the identity of the client, not the signatory on the document prepared by the lawyer.

A lawyer may be asked by a client to prepare a document for the signature of a third party under circumstances that give rise to a reasonable belief that the client may be using the lawyer's services for an improper purpose such as actual or constructive fraud or the exertion of undue influence. If so, the lawyer may not assist the client and must decline or withdraw from the representation. Rule 1.2(d) and Rule 1.16(a)(1).

Does 2003 FEO 7 apply only to the preparation of a power of attorney upon the request of the prospective attorney-in-fact or does it apply broadly to the preparation of other legal documents that purport to speak solely for the principal (such as a will, an advance directive, or a trust instrument) upon the request of another person?

Opinion:

2003 Formal Ethics Opinion 7 applies to the preparation of all such legal documents for the principal upon the request of another. (A notable exception is the preparation of documents in a business or commercial context as described in the quotation from 2003 FEO 7 above.) A lawyer should not undertake the representation of a client or the preparation of a legal document on behalf of that client without having consulted with the client to obtain his informed consent to the representation and to determine whether he needs or wants the legal services requested. Further, the lawyer must exercise his independent professional judgment, and advise the client accordingly, with respect to the advisability of and the scope of the requested legal services.