C. Engagement Agreements and Document Drafting

The elder and special needs law attorney:

1. Uses an engagement agreement letter, or other writing that will: 

(a) Identify the client;
(b) Describe the scope and objectives of the representation;
(c) Disclose potential material conflict(s) of interest between the attorney and client;
(d) Explain the lawyer’s obligation of confidentiality; 
(e) Confirm, when there are joint clients, that the lawyer will share information and confidences between them and may withdraw if one client requests that the attorney not disclose a secret to the other client or if the clients cannot agree on how to proceed;
(f) Disclose potential material conflicts between joint clients; 
(g) Address (and possibly waive) non-material conflict(s) of interest between joint clients;
(h) Confirm, when representing a fiduciary, the fiduciary’s obligations to the protected individual, clarify whether the attorney may speak directly to the protected individual, and state that the attorney may withdraw if the fiduciary violates a fiduciary or other duty to the protected individual and does not take timely corrective action;
(i) Set out fee arrangements (hourly, fixed fee, or contingent); and
(j) Explain when and how the attorney-client relationship may end.

The attorney should inform his or her clients about confidentiality and other components of the engagement.  A clear written engagement agreement is the best way to communicate these matters to the client and others involved. It is imperative that the client and any others involved understand this agreement. 

When an attorney represents both spouses or other joint clients, a joint representation letter or agreement should be used.  This is especially important if the clients have blended families.  Such agreements should provide for the waiver of confidences between the attorney and each jointly represented client, clarify that all information is available to all joint clients, and address actions the attorney should take if a material conflict arises between joint clients.
2.  Drafts documents reflecting the client’s intentions and informed choices that:

(a) An attorney-client relationship has been established (except in certain exigent circumstances described in Standard C. Engagement Agreements and Document Drafting, Section 4(a);
(b) The client has sufficient capacity to sign the documents;
(c) The documents reflect the client's intentions and informed choices as opposed to the choices of others; and 
(d) If the client is a fiduciary, the fiduciary appears to have authority and the proposed documents either reflect the choices of the protected individual if known or, if not known, are in the protected individual’s best interests." 

3.  Recognizes the unique challenges in drafting documents at the request of a fiduciary.

A fiduciary, such as an agent under a power of attorney or a guardian/conservator, may ask the attorney to draft documents to be signed by the fiduciary on behalf of the protected individual or to assist the fiduciary or others, under carefully limited circumstances, with the transfer of the protected individual's assets. Before acting on the fiduciary's request, the attorney should:

  • Confirm that the fiduciary has the authority to act under a valid durable power of attorney, court-ordered letters of authority, or state law.
  • Confirm that the proposed action is consistent with the protected individual's past estate planning documents or, if there are none, with the individual's known goals, wishes, and best interests. 
  • Consider meeting privately with the protected individual to ensure that the individual desires the proposed action, especially if the proposed action personally benefits the fiduciary.
  • Refuse to act on the fiduciary's request if the proposed action represents a change in the individual's existing documents that is inconsistent with the individual's best interests. 
  • Example. A protected individual who lacks capacity has an agent under a durable power of attorney and a will. The agent asks the attorney to draft a revocable trust to avoid probate. The proposed trust names the same beneficiaries as the will. The attorney can draft the trust.

    4.  Exercises caution when:
    (a) Drafting documents in exigent circumstances for a prospective client before the attorney-client relationship is established;
    (b) Drafting documents for a new client at the request of an existing or former client related to the new client;
    (c) Drafting a special needs trust for a person with special needs; and
    (d) Drafting documents to be signed by nonclients. 

    The attorney will draft documents differently depending on the identity of the client and the circumstances, including challenging situations such as the following:

    (a) Drafting documents in exigent circumstances for a prospective client before the attorney-client relationship is established.  

    The attorney usually should not draft documents before the client-attorney relationship is established. However, in certain limited exigent circumstances, it may be appropriate to prepare documents prior to the client-attorney relationship being established.   An example of such an exigent circumstance is when a client who has a terminal illness and is homebound or hospitalized needs documents.  In such a case, it may be appropriate for the attorney to bring certain documents, such as medical directives and powers of attorney, to the first meeting with the terminally ill prospective client.  

    When drafting documents before establishing an attorney-client relationship, the attorney should consider the following: 

  • Whether the potential client has sufficient capacity to understand and execute the documents;
  • Whether the potential client is terminally ill, at risk of an imminent decline in health, or in potential need of protective action due to diminished capacity;
  • Whether the potential client is a possible victim of financial or physical abuse;
  • Whether the potential client is homebound or institutionalized in a hospital or nursing home;
  • Whether there are family conflicts that may require urgency;
  • Whether the document is a medical directive, living will, or power of attorney, which requires less explanation than a will or living trust; and
  • Whether the attorney has the ability to make more than one visit in a short time period.

  • (b) Drafting documents for a new client at the request of an existing or former client related to the new client.  

    The attorney may be asked by an existing or former client to draft documents for a family member, a new client. Because of the potential for a conflict of interest, the attorney should proceed with caution. The attorney should meet privately with the new client, assess capacity, establish an attorney-client relationship with the new client, confirm that there is no material conflict between the two clients and inform the referring client that the attorney’s relationship with the new client is a separate representation which excludes the referring family member. The attorney should consider obtaining a waiver of any non-material conflict between the two clients before proceeding with document drafting for the new client. 

    (c) Drafting a special needs trust for a person with special needs. 

    In drafting a special needs trust for a person with special needs, that person may or may not have the capacity to engage the attorney and sign the trust agreement. If the person with special needs lacks capacity to take these actions, the attorney should only draft such a trust at the request of a fiduciary who has the authority to engage the attorney. In drafting such trusts, the attorney should ensure that anyone involved with the special needs trust understands whom the attorney represents. 

    (d) Drafting documents to be signed by nonclients. In elder law and special needs law, it sometimes is appropriate to draft documents to be signed by a family member of the client or other third-party in order to further the legal representation. An example is an agreement to be signed by the client’s agent under power of attorney in which the agent agrees not to act against the client’s best interests. Another example is an asset protection trust to be signed by the client’s child as trustee. When drafting such documents, the attorney should resolve whether the person being asked to sign the document is the attorney’s client and, if not, advise that person to seek independent legal counsel before signing the document.

    Example 1:  An adult son, who is the attorney’s client, arranges for his mother to consult with the attorney about her estate planning needs.  The son tells the attorney that he will pay for the attorney’s services to his mother.  The attorney must engage in a conflict of interest analysis to ensure that representation of the mother will not be materially limited by responsibilities to the son and vice versa.  The attorney must explain to the son that for the purposes of the mother’s estate planning services, the attorney’s client is the mother even though the son is paying the attorney’s fee.  The attorney should also ensure that the mother understands the ramifications of this arrangement and obtain the mother’s informed consent in writing. The son should not be allowed to participate in the attorney’s representation of the mother or be entitled to any confidential information gained in the course of representing the mother unless the mother consents in writing to the son’s involvement and sharing of information.  

    Example 2:  A daughter is her mother’s agent under a power of attorney and thus is authorized to use her mother’s money for her mother’s benefit.  The daughter arranges for the mother to consult with the attorney about her estate planning needs.  The daughter uses the mother’s money to pay for estate planning services for the mother.  Because the daughter is authorized to use the mother’s money to benefit the mother and because the client is the mother, the daughter’s payment of the attorney’s fee is appropriate. This is not a situation in which the attorney’s fee is being paid by a third party. 

    Example 3:  A daughter hires the attorney to have her mother declared incapacitated and to have herself appointed as her mother’s guardian.  The daughter has signature authority on the mother’s checking account but has no ownership interest in the funds that are in the account.  The daughter is not the mother’s agent under a power of attorney, nor does she stand in any other fiduciary relationship with the mother.  The daughter tells the attorney that she plans to pay the attorney’s fees for preparing the guardianship petition from the mother’s checking account.  This may not be a typical third-party payment, but rather is a situation in which the daughter is attempting to use her mother’s money to pay for an action that is potentially adverse to her mother’s wishes. Absent a state statute or rule that allows a proposed ward’s funds to be used without court order to pay for the filing of a guardianship petition, the attorney should not accept payment from the mother’s account.

    5.  Ensures that documents are properly executed.

    The attorney is responsible for ensuring that documents are properly executed. The attorney or a trained staff member should personally oversee and supervise the execution of documents. Only if it is not feasible for the attorney or a staff member to personally oversee and supervise the execution of documents should the attorney furnish the client with detailed explicit instructions to ensure that documents are properly executed. The attorney should confirm in the attorney’s file the proper execution of the documents and the capacity of the person signing the documents and should note the contact information for the persons who witnessed or notarized the signing.