Informal Opinion Number: 2023-08

Adoption Date: July 27, 2023

Rules: 4-1.8
Client-Lawyer Relationship
Conflict of Interest: Prohibited Transactions
Subject: Business Transaction with Client (see also Conflict of Interest - Prohibited Transactions); Conflict of Interest - Prohibited Transactions (see also Business Transaction with Client)
Summary: lawyer may be named as successor trustee in estate planning documents prepared by lawyer so long as lawyer complies with requirements of Rule 4-1.8(a)

Question: Lawyer is preparing estate planning documents for Client, an elderly individual with no immediate family members. Client will be named as trustee on a revocable living trust, but Client asks Lawyer to serve as successor trustee in the event Client dies or resigns as trustee. The revocable living trust would provide reasonable compensation for services rendered as successor trustee in the event Client dies or resigns as trustee. May Lawyer ethically prepare and participate in such an arrangement?

Answer: Lawyer must comply with the requirements of Rule 4-1.8(a) to agree to serve as successor trustee and receive reasonable compensation for such services in the event Client dies or resigns as trustee. See Missouri Informal Opinions 970138 and 970130.
Rule 4-1.8(a) provides:

A lawyer shall not enter into a business transaction with a client (…) unless:

(1) the transaction and terms on which the lawyer acquires an interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;

(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and

(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.

Lawyer should carefully review Comments [1] – [4] to Rule 4-1.8 for further guidance, as well as Missouri Informal Opinions 20050041 and 20030019.

Informal Opinions are ethics advisory opinions issued by the Office of Legal Ethics Counsel to members of the Bar about Rule 4 (Rules of Professional Conduct), Rule 5 (Complaints and Proceedings Thereon), and Rule 6 (Fees to Practice Law) pursuant to Missouri Supreme Court Rule 5.30(c). Written summaries of select Informal Opinions are published for informational purposes as determined by the Advisory Committee of the Supreme Court of Missouri pursuant to Rule 5.30(c). Informal opinion summaries are advisory in nature and are not binding. These opinions are published as an educational service and do not constitute legal advice.

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