By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Planning Attorney
In a truly bizarre case straight out of a scene from the Maury Povich show, the Supreme Court ruled in A. v. B. that a law firm that jointly represented a husband and wife when drafting their wills, which when it found out about the husband’s illegitimate child (when representing the mother of the child in a paternity action), should have disclosed the existence of the child to the wife. It was a case where the Court grappled with the question of whether the disclosure of this child would be more damaging to the husband in revealing the existence of this child or to the wife in failing to take into account the possibility that this child might have a claim to the estate.
In October 1997, the husband and wife jointly retained a law firm to plan their respective estates. Both signed conflict of interest waivers, which provided that information given by one spouse may be made available to the other spouse. Wills were executed by both providing that each spouse would receive their respective share of the others estate, with the children as contingent beneficiaries if the spouse died.
3 months later, the mother of the child born outside the marriage retained the same firm to institute a paternity action seeking child support from the husband. Due to a clerical error in the spelling of the child’s name, the firm missed the conflict of interest with the husband. The husband neither objected to the firm’s representation nor alerted them to the conflict of interest. When the firm reached out to the husband’s lawyer who drafted the Estate plan, the lawyer notified the firm that they already had the family information. Realizing the mistake, the firm withdrew from representing the mother, and informed the husband that it felt it had an ethical obligation to reveal the existence of the illegitimate child. The husband objected and sued to have this information not revealed.
The Supreme Court held that the firm’s decision to reveal this information was permissible within the lawyer’s rules of professional conduct. A firm may reveal confidential information to remedy a client’s criminal, illegal, or fraudulent act for which the lawyer’s services have been used. The Court held that the deliberate omission of the existence of the child was a fraud perpetrated on his wife because the child could be a legitimate contingent residuary beneficiary and could affect the inheritance of the couple’s children. The husband’s estate could also be depleted for the wife’s use if he was forced to make child support payments for this child.
Despite the error made in not seeing the conflict of interest in representing the mother in the paternity action, the Court still held that there was an agreement in place that allowed the lawyer to reveal confidential information related to the joint representation of the husband and wife, and that this information would be detrimental to the wife and frustrate her intended estate plan.
The Court’s logic is sound in that if your will says all your property is to go to your spouse, with the remainder to go to the spouse’s children, the estate plan is “at risk” because the Estate will go to the children of both parents, not to the child your spouse had in a prior relationship. Nevertheless, it once again highlights the issue of joint representation and the lawyer’s need to balance the interests of both parties. Whether confidential information should be revealed depends on whether the benefit of disclosures to those who are jointly represented outweighs the pain it would cause the other client by its disclosure. It is a tough balancing act.
To discuss your NJ Estate Planning matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.