28
Mar2019

Wisconsin Supreme Court Rules in Favor of Law Firm in Estate Dispute and Declines to Expand Third-Party Beneficiary Theory

Charles MacLeish’s Will

In 1984, Charles MacLeish passed away and left a one page will. He transferred all of his assets to his spouse, Thelma. Upon Thelma’s death, his children would receive any remaining assets. Thelma’s attorney at the time advised her to take full advantage of the federal estate marital tax deduction. This tax deduction allows for the transfer of assets to a spouse without estate taxes or liability

To the Children’s Disdain, Taxes are Incurred

When Thelma passed in 2008, the tax deduction no longer applied. As a result, the tax bill left to the children amounted to $261,000. The MacLeish children filed a lawsuit against the former attorney’s current firm, Boardman & Clark LLP, claiming malpractice. They believed that the estate tax could have been prevented if the assets were used to create a trust for Thelma and subsequently the children. Boardman stood by his counsel because he believed MacLeish’s will to be very clear. It called for Thelma to receive all of the assets and did not call for the creation of a trust.

It seems the circuit court agreed and dismissed the case. The children appealed and the appeals court affirmed. In the end, the court dismissed the case.

The Wisconsin Supreme Court Ruling on Attorneys’ Duties to Non-Clients

The Wisconsin Supreme Court restated the general rule that attorneys are not liable to third parties for acts committed within the attorney-client relationship. The 1983 case Auric v. Continental was an exception. The court found the attorney liable for failing to obtain a signature, which invalidated his client’s will. The attorney’s actions thwarted the deceased’s intent, which distinguished the case.

In this case, the attorney’s actions fully supported MacLeish’s intent based on his will.

The MacLeish children asked that the Wisconsin Supreme Court adopt the Restatement (Third) of the Law Governing Lawyers section 51 that details attorneys’ duties to non-clients. The Wisconsin Supreme Court declined because it believed it could impact attorneys’ ability to fulfill their duties to their clients.

Contact Us

If you have questions about an attorney’s liability to third parties in Illinois or Wisconsin, please do not hesitate to get in contact with us. Patterson Law Firm can be reached at (312) 223-1699 or click here.

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