Let me entertain you – but first get the court’s OK

Elder law is a growing field of practice, and we all know why. What lawyers don’t always know is how to balance the different hats they may have to wear when serving elderly or incapacitated clients.

A new Fairfax case highlights one issue of concern: Should a lawyer appointed as a guardian and conservator draft the trust instrument that provides the foundation for future care of an incapacitated adult?

The lawyer appointed as guardian/conservator in February 2004 in In re Larry Banton (VLW 007-8-163) paid a law firm $5,000 to draft the special needs trust her ward required.

In a later dispute over the first guardian’s reimbursement of her expenses and fees from the trust, a successor guardian claimed the first guardian “should have put the Trust together herself, using CLE materials,” Judge Kathleen H. MacKay wrote.

But an expert witness who testified against the first guardian said that for her to hire herself was “ethically questionable.” MacKay said she agreed with this view, but cited the dispute as “just one example of how difficult this field of practice is for attorneys.”

The case raised other questions about the former guardian’s alleged charging of legal fees for non-legal services, including her “planning and attendance at a birthday party for her ward which took place at Hooters – his express wish.”

An expert witness for the former guardian acknowledged that perhaps one-half the lawyer’s normal rate would be appropriate for such activities, and the opposing expert said that “entertainment services” could have been provided by a vendor at the rate of $70 per hour.

MacKay said the former guardian worked very hard in the case and her ward “probably benefited from her kind attention, and the Trust anticipates such expenditures.” MacKay found no bad faith and allowed a fee of $70 per hour for certain entertainment expenses.

Although the first guardian’s original petition alleged expenses and fees of $26,920, MacKay determined the former guardian was justified in taking $7,646 out of the trust over and above the normal one-percent fee of $1,910, and conservatorship fee of $1,893. The judge agreed with the successor trustee that if administrative time exceeds one percent, the prudent thing for a guardian to do is go to court and explain the situation.