Barcelo v. Elliot
923 S.W.2d 575 (Tex. 1996)
FACTS
-Frances Barcelo retained David Elliot (D) to assist her with estate planning.
-Defendant drafted a will and inter vivos trust agreement for Frances Barcelo.
-Barcelo signed the will and trust agreement in September 1990 and passed away in January 1991. -Two of Barcelo’s children contested the validity of the trust and it was declared invalid and unenforceable.
-Barcelo’s grandchildren (Ps), who were the intended remainder beneficiaries under the trust, settled for an amount substantially smaller than they would have received under the trust.
-Plaintiffs subsequently filed a malpractice action against the Defendant alleging his negligence caused the trust to be invalid.
PROCEDURAL HISTORY
-The trial court granted the Defendant’s motion for summary judgment and Plaintiffs now appeal.
ISSUE
-Does an attorney who negligently drafts a will or trust agreement owe a duty of care to the person intended to benefit under the will or trust, even though the attorney never represented the intended beneficiaries?
HOLDING
No. Judgement Affirmed.
-An attorney retained by a testator or settlor to draft a will or trust owes no professional duty of care to persons named as beneficiaries under the will or trust.
RULES
-Intended beneficiaries of a will or trust will be denied a cause of action for legal malpractice against the attorney retained by the testator as there is no professional duty of care owed to such persons.
ANALYSIS
-At common law an attorney owes a duty of care only to his or her client and not to third parties.
-This “privity barrier” helps protect the attorney-client relationship.
-While many courts have relaxed the barrier in the estate planning context, the Court in this case was unwilling to do so.
-The Court believes that the greater good is served by preserving a bright line “privity barrier” in order to ensure that attorneys can represent their clients without threat of suit from third parties.
DISSENTS
-Spector: It is sound public policy to recognize a limited cause of action for intended beneficiaries of wills or trusts. Such a cause of action would require attorneys to exercise due care in implementing estate plans, otherwise they will be accountable to no one.
-Cornyn: Intended beneficiaries of a will or trust may bring a cause of action against an attorney that caused them to lose a legacy in whole or in part. Intended beneficiaries are foreseeable plaintiffs. In addition, lawyers wishing to protect themselves for what might be the testator’s wishes rather than a lawyer’s mistake can do so by documenting the testator’s intentions.
923 S.W.2d 575 (Tex. 1996)
FACTS
-Frances Barcelo retained David Elliot (D) to assist her with estate planning.
-Defendant drafted a will and inter vivos trust agreement for Frances Barcelo.
-Barcelo signed the will and trust agreement in September 1990 and passed away in January 1991. -Two of Barcelo’s children contested the validity of the trust and it was declared invalid and unenforceable.
-Barcelo’s grandchildren (Ps), who were the intended remainder beneficiaries under the trust, settled for an amount substantially smaller than they would have received under the trust.
-Plaintiffs subsequently filed a malpractice action against the Defendant alleging his negligence caused the trust to be invalid.
PROCEDURAL HISTORY
-The trial court granted the Defendant’s motion for summary judgment and Plaintiffs now appeal.
ISSUE
-Does an attorney who negligently drafts a will or trust agreement owe a duty of care to the person intended to benefit under the will or trust, even though the attorney never represented the intended beneficiaries?
HOLDING
No. Judgement Affirmed.
-An attorney retained by a testator or settlor to draft a will or trust owes no professional duty of care to persons named as beneficiaries under the will or trust.
RULES
-Intended beneficiaries of a will or trust will be denied a cause of action for legal malpractice against the attorney retained by the testator as there is no professional duty of care owed to such persons.
ANALYSIS
-At common law an attorney owes a duty of care only to his or her client and not to third parties.
-This “privity barrier” helps protect the attorney-client relationship.
-While many courts have relaxed the barrier in the estate planning context, the Court in this case was unwilling to do so.
-The Court believes that the greater good is served by preserving a bright line “privity barrier” in order to ensure that attorneys can represent their clients without threat of suit from third parties.
DISSENTS
-Spector: It is sound public policy to recognize a limited cause of action for intended beneficiaries of wills or trusts. Such a cause of action would require attorneys to exercise due care in implementing estate plans, otherwise they will be accountable to no one.
-Cornyn: Intended beneficiaries of a will or trust may bring a cause of action against an attorney that caused them to lose a legacy in whole or in part. Intended beneficiaries are foreseeable plaintiffs. In addition, lawyers wishing to protect themselves for what might be the testator’s wishes rather than a lawyer’s mistake can do so by documenting the testator’s intentions.
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