The NH Supreme Court’s recent decision in Ketteridge v. Martin Lord & Osman, P.A. strongly suggests that the Court will likely hold that an estate planning attorney does not owe a duty to intended beneficiaries of an estate plan to evaluate whether the client is being subjected to undue influence when the client makes a change to the plan; in other words, any such duty of care runs only to the lawyer’s client and not to non-client family members who may be disinherited or otherwise harmed by an estate plan change procured by undue influence. Given that undue influence (in the context of diminished capacity) is the most common ground for contesting the validity of wills and trusts, the decision provides important guidance about how the Court will likely address this important liability issue.
Ketteridge was a legal malpractice case that was brought after the daughter in another proceeding successfully established that her brother had exercised undue influence over their mother to remove the daughter as a beneficiary of a trust established by their mother and father. The daughter’s beneficiary elimination was accomplished in two steps: first, the parents’ trust was amended to remove the daughter as a successor trustee and to clarify that the surviving parent could amend the trust; and, second, after, the father died, the mother amended the trust to eliminate the daughter’s beneficial interest.
The threshold issue in the legal malpractice action brought by the daughter was whether “the [law firm] owed the [daughter]… a duty to ascertain whether its clients were subject to undue influence.” The Supreme Court discussed and quoted the “well-reasoned orders” of the Superior Court (MacLeod, J.) in this respect as follows:
In addressing the plaintiff’s negligence claim, the trial court analyzed whether the defendant owed the plaintiff, an intended beneficiary of its clients’ estate plan, a duty to ascertain whether its clients were subject to undue influence. The trial court observed that this court has recognized that an attorney owes a duty of care to an intended beneficiary of a will to draft the will non-negligently. Simpson v. Calivas, 139 N.H. 1, 7 (1994). We have also stated that ‘an attorney’s duty to an intended beneficiary of a will is limited.’ Riso v. Dwyer, 168 N.H. 652, 654 (2016). The trial court reasoned that imposing a duty in this case could force attorneys to compromise their duty of undivided loyalty to their clients and create conflicts among potential beneficiaries. The trial court stated that ‘[a]n attorney should be free to conduct an objective determination of whether a client is under undue influence without needing to consider the possibility that a certain determination could lead to liability to individuals other than the client.’ Otherwise, ‘the specter of liability under such circumstances could cause attorneys to unnecessarily refuse to draft or amend estate planning documents when presented with the slightest hint that a client is subject to undue influence, needlessly resulting in scenarios where individuals struggle to secure legal representation.’ Thus, the trial court found that the defendant did not owe the plaintiff a duty in this case, and dismissed the plaintiff’s negligence claim.
After briefing and argument by the parties, the Court found this and other issues to be so clear-cut and the reasoning of the trial court so persuasive, it declined to issue a formal written opinion and, instead discussed with approval in an abbreviated Order the decision below. Under Supreme Court Rule 20, this non-formal Order “shall have no precedential value, but… may, nevertheless, be cited or referenced in pleadings or rulings in any court in this state, so long as it is identified as a non-precedential order.” Thus, Ketteridge does not conclusively establish that estate planners have no duty to intended beneficiaries to evaluate whether a client is being subjected to undue influence; nonetheless, the case strongly suggests that the Court would so hold and should provide comfort to the estate planning bar.