When a lawyer represents a personal representative or trustee, are the estate, trust, or beneficiaries also the lawyer's clients, and can the lawyer tell beneficiaries about the fiduciary's breach of duty?

Plain-English summary

The opinion takes up two fiduciary scenarios. In the first, a plaintiff sues a widow individually and the estate of her late husband, of which she is personal representative, and a lawyer is asked to represent the widow both individually and in her fiduciary capacity, where the estate's beneficiaries may have economic interests that differ from the widow's. In the second, an employee sues an employer who is also a trustee of a retirement trust, asserting the employer violated the employee's rights as a trust beneficiary, and the employer's trust lawyer is asked to defend the litigation. The opinion answers four questions about whether the lawyer has more than one client and what the lawyer may disclose.

On the estate questions, the opinion concludes a lawyer for a personal representative represents the personal representative, not the estate or the beneficiaries, so the lawyer has only one client even though the widow holds multiple interests as an individual and as a fiduciary. The current-client conflict rules in Oregon RPC 1.7 therefore do not apply. The lawyer still may not assist the widow in illegal or fraudulent conduct (Oregon RPC 1.2(c), 3.1, 8.4(a)(3)), but a widow's disclosure of past wrongs is information protected by Oregon RPC 1.6, so the lawyer must not reveal it to beneficiaries; the lawyer may counsel the widow about corrective measures and, if she persists in using the lawyer's services to further a crime or fraud, must seek to withdraw under Oregon RPC 1.16(a)(4), still without disclosing the protected information. If the widow instead states an intention to commit a future crime, the opinion concludes the lawyer may, permissively, disclose that intention and the information needed to prevent it under Oregon RPC 1.6(b)(1).

On the trust question, the opinion applies the same principle: the lawyer for a trustee represents the trustee, not the trust or its beneficiaries, because otherwise a trustee could not obtain legal advice independent of the beneficiaries. The opinion concludes the employer's lawyer may represent the employer in the beneficiary's litigation, while noting that a conflict under Oregon RPC 1.7 could arise if the employer and the fiduciary were separate entities or if the lawyer also represented the beneficiaries as clients.

In practice

The opinion holds that, under the current Oregon rules, the identity of the client controls the analysis: a fiduciary's lawyer has one client, the fiduciary, and the conflict rules are measured against that, not against the beneficiaries. Per the opinion, the confidentiality line is that past wrongs stay protected under RPC 1.6 while a stated future-crime intention may be disclosed under RPC 1.6(b)(1); and the lawyer's duty not to assist wrongdoing is enforced through counseling, the limits of RPC 1.2(c), and, where necessary, withdrawal under RPC 1.16(a)(4). Verify the current text of Oregon RPC 1.6, 1.7, and 1.16 before relying on any specific point.

Common questions

Q: Does a lawyer for an estate's personal representative also represent the estate or its beneficiaries?

A: No. The opinion concludes the lawyer represents the personal representative only, so representing the same person individually and as fiduciary is not a current-client conflict under Oregon RPC 1.7.

Q: Can the lawyer tell the beneficiaries that the fiduciary has breached duties to the estate?

A: No, qualified. The opinion concludes the fiduciary's disclosure of past wrongs is protected by Oregon RPC 1.6 and may not be revealed; the lawyer may counsel corrective action and, if the client persists in wrongdoing, must seek to withdraw without disclosing the information.

Q: What if the fiduciary says they intend to commit a future crime?

A: Per the opinion, the lawyer may then permissively disclose the intention and the information necessary to prevent the crime under Oregon RPC 1.6(b)(1).

Q: Can a lawyer who advises an employer-trustee defend the employer against a beneficiary's suit?

A: Yes. The opinion concludes the lawyer for the trustee represents the trustee, not the beneficiaries, so the representation is permissible, absent the lawyer also representing the beneficiaries or the employer and trustee being separate entities.

Background and rules framework

The opinion interprets Oregon RPC 1.7 (current-client conflicts) and Oregon RPC 1.6 (confidentiality, including the future-crime exception in 1.6(b)(1)), with Oregon RPC 1.2(c) (not assisting crime or fraud), 1.16(a)(4) (mandatory withdrawal), and 1.13(a) (organization as client), corresponding to Model Rules 1.7, 1.6, 1.16, and 1.13.

Citations and references

Rules of Professional Conduct:

• Oregon RPC 1.7 / Model Rule 1.7 (current-client conflicts)
• Oregon RPC 1.6 / Model Rule 1.6 (confidentiality; future-crime exception)
• Oregon RPC 1.2(c) (not counseling or assisting crime or fraud)
• Oregon RPC 1.16(a)(4) / Model Rule 1.16 (mandatory withdrawal)
• Oregon RPC 1.13(a) / Model Rule 1.13 (organization as client)

Cases:

• In re Harrington, 301 Or 18, 718 P2d 725 (1986)
• Kidney Ass'n of Oregon, Inc. v. Ferguson, 315 Or 135, 843 P2d 442 (1992)
• State v. Phelps, 24 Or App 329, 545 P2d 901 (1976)

Other opinions cited:

• OSB Formal Ethics Op. No. 2005-62 (lawyer for a personal representative)
• OSB Formal Ethics Op. No. 2005-85 (identifying the client)
• OSB Formal Ethics Op. No. 2005-34 (disclosure of client's criminal intent)

See also

• OSB Ethics Op. 2005-62: Original and Successor Personal Representatives
• OSB Ethics Op. 2005-85: Identifying the Client (Corporations, Partnerships)
• OSB Ethics Op. 2005-46: Who Is the Client in a Group Legal Plan

Source

• Landing page: https://www.osbar.org/ethics/toc.html
• Original PDF: https://www.osbar.org/_docs/ethics/2005-119.pdf