Opinion 946

[Formerly published as Published Informal Opinion 86-1. All Informal Opinions are consolidated in this database.]

Questions:
1. Do the Rules of Professional Conduct always prohibit a lawyer from preparing a will in which the lawyer is a named beneficiary?
2. Do the Rules of Professional Conduct prohibit a lawyer from designating the lawyer as executor in a will prepared by the lawyer?
Conclusions:
1. RPC 1.8 prohibits a lawyer from preparing an instrument giving the lawyer or immediate relative any substantial gift from a client, except where the client is related to the lawyer.
2. Nothing in the RPC prohibits a lawyer, at the request of the client after full disclosure, preferably in writing, from being named as executor in a will prepared by the lawyer.

Discussion:
1. Lawyer as Beneficiary:
The first issue is governed by RPC 1.8(c), which provides:
"A lawyer who is representing a client in a matter shall not prepare an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee."
The comments to the ABA Model Rules of Professional Conduct, from which this provision was taken without change, provide:
"A lawyer may accept a gift from a client, if the transaction meets general standards of fairness. For example, a simple gift such as a present given at a holiday or as a token of appreciation is permitted. If effectuation of a substantial gift requires preparing a legal instrument such as a will or conveyance, however, the client should have the detached advice that another lawyer can provide. RPC 1.8(c) recognizes an exception where the client is a relative of the donee or the gift is not substantial."
While the comments to the Model Rules were not adopted by our Supreme Court, they are relevant in determining the intended scope of the rules and the construction which should be given them.
The Committee reads RPC 1.8(c) to adopt a per se prohibition of the preparation of any instrument under which the lawyer, or a related person, receives a gift, subject to only two exceptions:
1. Where the gift to the lawyer is not substantial; or
2. Where the lawyer is related to the client.
The term "substantial" is defined in the Rules of Professional Conduct as follows:
"`Substantial` when used in reference to degree or extent denotes a material matter of clear and weighty importance."
In determining whether the subject of a particular gift is "substantial" the Committee believes the lawyer should focus on the economic nature of the proposed gift when viewed from the perspective of both the client and the lawyer at the time the will is prepared. If the proposed gift is substantial when compared with either the size of the estate or the financial status of the lawyer, RPC 1.8(c) prohibits the lawyer from preparing the will in which the gift is made. If the primary nature of the gift is not economic, such as where a client wishes to bequeath an object of sentimental significance to a lawyer, the Committee is of the opinion that RPC 1.8(c) would not prohibit the lawyer from preparing the will in which the gift is made. Where a substantial cash bequest is proposed or where the object is of substantial economic value, the Committee believes that RPC 1.8(c) prohibits the lawyer from preparing the will in which the gift is made. The Committee also believes that RPC 1.8(c) prohibits a lawyer from preparing a will in which the lawyer is the residual beneficiary because there is no way to determine whether such a gift is substantial at the time the will is prepared.
The second exception to the general prohibition applies in situations where the lawyer is a relative of the testator. While RPC 1.8 states the exception in absolute terms, it must be kept in mind that the lawyer`s conduct in preparing such an instrument would continue to be governed by the general conflict of interest rule, RPC 1.7(b), which provides in material part "A lawyer shall not represent a client if the representation of that client may be materially limited . . . by the lawyer`s own interests, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents in writing after consultation and a full disclosure of the material facts . . ." The Committee is of the opinion that this rule is applicable in all situations in which a lawyer prepares a will in which the lawyer is a beneficiary, including where the bequest is not substantial or where the client is a relative of the lawyer. The Committee does not believe this construction of the relevant rules is inconsistent with the decision of the Supreme Court in Estate of Shaughnessy, 104 Wn.2d 89, 702 P.2d 132 (1985). While portions of the literal language of both the majority and dissenting opinions can be read to create an absolute prohibition against a lawyer preparing a will in which the lawyer is named as a beneficiary, the Supreme Court was addressing a situation in which the particular lawyer involved was both a specific beneficiary of $5,000 and the residual beneficiary of the estate. Together the specific bequest of $5,000 and the designation of the lawyer as the residual beneficiary clearly constitutes a "substantial" gift and thus a lawyer would be prohibited by RPC 1.8(c) from preparing a will containing them. The Committee does not believe that the opinion should be read to modify RPC 1.8(c) to prohibit a gift which is not substantial as described above or situations in which the lawyer has prepared a will for a member of his or her family which makes the lawyer a beneficiary.
2. Lawyer as Executor:
The second issue, whether a lawyer may prepare a will which designates the lawyer as executor, presents different issues. The Rules of Professional Conduct do not specifically address this issue. Under the former Code of Professional Responsibility, Ethical Consideration 5.6 provided:
"A lawyer should not consciously influence a client to name him as executor, trustee or lawyer in an instrument. In those cases where a client wishes to name his lawyer as such, care should be taken by the lawyer to avoid even the appearance of impropriety."
While this ethical consideration was not carried over to the Rules of Professional Conduct in express terms, the Committee believes it constitutes a sound and workable guideline for lawyers to follow in situations where their clients wish them to act as executors. The Committee does not believe the Rules of Professional Conduct prohibit a lawyer from preparing a will in which the lawyer is named as executor where that designation is at the express wish of the client after the client has been fully informed by the lawyer as to the duties and obligations of an executor and of the costs likely to ensue.
While the Committee believes that the designation of a lawyer as executor in a will does not create a business relationship between the lawyer and the client, the considerations expressed in RPC 1.8(a) provide a useful guideline to a lawyer to designate himself or herself as executor. The lawyer should disclose to the client the duties and obligations of an executor, the fees which the lawyer will charge for performing those services, the fees alternative executors would probably charge, and should advise the client that he or she is free to seek the advice of independent counsel. This disclosure should be in writing to ensure that the client understands its significance and to establish conclusively that it occurred.
As with the first issue, the literal language of Estate of Shaughnessy can be read to establish a per se prohibition against lawyers preparing wills in which they are named as executors regardless of the desires of their clients. This language is dictum, however, since the majority opinion specifically held that the Code of Professional Responsibility was not violated by the lawyer`s actions. The Committee believes that both the majority and the dissenting opinions in the Estate of Shaughnessy must be read in light of the facts of the case presented to the court. In addition to the presence of substantial bequests to the lawyer, there is no indication that the lawyer fully advised the client nor that the client affirmatively decided that the lawyer should be the executor after being so advised. The Committee does not believe the Supreme Court intended to prevent a lawyer from preparing a will in which the lawyer is named as executor in situations where the client is fully advised and affirmatively desires the lawyer to so serve.
While undoubtedly it is the better practice for a lawyer not to be named as executor in a will which the lawyer prepares and such a course would preclude any questions arising later, the Committee believes that the ultimate decision is the client`s. If the client, after full disclosure, desires the lawyer to act as executor, a lawyer has no professional obligation to refuse to do so. We do not believe the Supreme Court would prohibit a fully informed client from choosing to have his or her lawyer both prepare the client`s will and serve as executor of the estate.