The Texas Supreme Court has ruled that executors of an estate can sue the decedent’s attorney for malpractice for negligently providing estate planning advice.
In Belt v. Openheimer, Blend, Harrison & Tate, Inc., No. 04-0681 (May 5, 2005), the executors claimed that poor estate planning cost the estate $1.5M that could have been avoided by competent estate planning. The defendants argued that they owed no duty of care to anyone outside the attorney-client relationship, relying on a prior Texas decision which did not permit trust iciaries to sue a lawyer who drafted a trust which was set aside as invalid. (Noe: Texas is in the minority in this position. “In the majority of states, a beneficiary harmed by a lawyer’s negligence in draftting a will or trust may bring a malpractice claim againt the attorney, even though the beneficiary was not the attorney’s client.”
Under these facts, however, the Texas Supreme Court found that a duty existed. Noting that Ohio, Virginia, Oregon, and Illinois permit such actions, the Court said “estate-planning malpractice claims seeking recovery for pure economic loss are limited to recovery for property damage. … Therefore, in accordance with the long-standing, common-law principle that actions for damage to property survive the death of the injured party, we hold that legal malpractice claims alleging pure economic loss survive in favor of a deceased client’s estate, because such claims are necessarily limited to recovery for property damage.”
Read the opinion here.