Opinion 2107

I. Facts and Question
The inquiring lawyer is guardian of an incapacitated person. He also serves as the lawyer for the guardianship. In his capacity as guardian, the lawyer has concluded that a special needs trust should be established for the benefit of the incapacitated person. The inquiring lawyer wishes to know if he, as the guardian, can appoint himself to be the trustee of the Special Needs Trust.
II. Short Answer
This inquiry involves questions of law: Do the duties of a guardian for an incapacitated person coincide completely with the duties of a trustee for a Special Needs Trust in which the incapacitated person is the beneficiary? In addition, does the establishment of a Special Needs Trust automatically or practically result in the termination of the guardianship? If the duties of guardian and trustee do not coincide and/or the guardianship is not terminated at the establishment of the Special Needs Trust, then it would be a conflict for the lawyer to seek appointment as trustee under RPC 1.7. Because we believe that the establishment of the Special Needs Trust does not necessarily result in termination of the guardianship and the duties of the guardian and the trustee do not necessarily coincide, we conclude that such a conflict would exist. Furthermore, and regardless of how the legal questions posed above are answered, appointment of the lawyer/guardian as trustee would violate RPC 1.8.
III. Analysis
Originally, the inquiring lawyer posed his question to the Committee in a somewhat different context. He implied, if not stated, that he was both the lawyer for the incapacitated person, as well as that person’s guardian. The committee offered the opinion that, based upon RPC 1.7(b) and 1.8(a), there was a conflict between his duties to his client, the incapacitated person, and his obligations as trustee. The lawyer now says that he is not the lawyer for the incapacitated person, rather is the guardian of the incapacitated person and the lawyer for the guardianship. He still wants, however, to appoint himself the trustee for the special needs trust.
At the outset, it should be noted that the Committee does not provide statutory analysis or interpretation. However, we include the statutory references hereinafter set forth to aid in the discussion of the potential conflicts under the Rules of Professional Conduct presented by this inquiry.
RCW Chapters 11.88 and 11.92 address guardianships for incapacitated persons. RCW 11.92. 040 and 043 describe the extensive duties of a guardian. They include not only the expected fiduciary obligations to act in the best interest of the incapacitated person, but also to inventory property, periodically report and account to the court, invest and reinvest property of the incapacitate person in a manner consistent with statute, etc. RCW 11.88.140 provides that termination of a guardianship without court order occurs only if and when an incapacitated person attains full and legal age, an adjudication of termination of incapacity, or death. Termination by court order occurs only if the court determines that the guardianship is no longer necessary.
A Special Needs Trust is defined by, and is a creation of, federal law. 42 U.S.C.A §1396p(d)(4) describes such as a trust containing assets of an individual under 65 and disabled, which is established for his/her benefit by a parent, grandparent, legal guardian or the court, if the state will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a state plan. This mechanism allows the incapacitated person to receive greater benefits from the State, conditioned on the right of the State to claim reimbursement from the trust following the incapacitated person’s death. Notably absent is any reference that by seeking establishment of such a trust, the guardianship is terminated. We also find no reference to the same reporting and accounting obligations (or other duties) that exists for the guardian.
It is noteworthy that the Special Needs Trust can be established for the benefit of the incapacitated person by, among others, the guardian. This is precisely what the inquiring attorney is suggesting should be done, although he is further recommending that he be appointed the trustee. Therefore, it follows that, at least at the outset, he would be the guardian and trustee at the same time.
While the inquiring lawyer says there are no differences between the responsibilities of a guardian and trustee, we are not so sure. From the above discussion about RCW Chapters 11.88 and 11.92, and 42 U.S.C.A. §1396p(d)(4), there appear to be some differences. Therefore, we question the inquiring lawyer’s claim that the “guardianship would be subsumed into the trust.” Unless it can be affirmatively proven that there are no differences, we believe that there is the potential for a conflict between the two roles. If there is, clearly the inquiring attorney cannot occupy both positions at the same time.
RPC 1.7(b) provides that (a) lawyer shall not represent a client if the representation is materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests. This is the situation present, or at least potentially present, when the lawyer tries to act as both guardian and trustee. Of course, since the incapacitated person probably lacks the mental capacity to understand a full disclosure and consent to the dual representation, the conflict cannot be waived pursuant to RPC 1.7(a) or 1.7(b).
Under RPC 1.8(a), it is a conflict of interest for a lawyer to enter into a business transaction with a client or knowingly acquiring . . . a pecuniary interest adverse to a client. In appointing himself to be the trustee of the special needs trust, the lawyer is entering into a business transaction with his client, the guardianship. Assuming that the lawyer would be receiving a fee for serving as trustee, the self appointment as trustee would also constitute a pecuniary interest adverse to the guardianship. One can easily imagine a potential disagreement between the guardian and the trustee over the proper fees to be charged, even if the actual fees allowed would ultimately have to be approved by the court. If the same person is wrestling that issue, a conflict exists. Therefore, we believe that the guardian should recommend the appointment of some other person as trustee of the Special Needs Trust.
Finally, the record is silent on whether the incapacitated person has her own legal counsel. As noted in the Committee’s early response, statutory and case law make it clear that an incapacitated person is to have independent counsel in guardianship matters. RCW 11.88.045; Matter of Guardianship of K.M., 62 Wn.App. 811 (1881). Pursuant to RPC 1.2(a), the attorney is obligated to abide by the decisions of the client. In contrast, the guardian is obligated to act in the best interests of the client, even if it conflicts with the client’s decisions. Therefore, we recommend the appointment of an attorney for the incapacitated person.