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

In 1984, Charles MacLeish passed away leaving a one page will in which he gave all of his assets to his spouse, Thelma. Upon Thelma’s death, any remaining assets would be transferred to a trust for his four children. Thelma’s attorney at the time advised her to take full advantage of the federal estate marital tax deduction, which allowed assets to be transferred to a spouse without incurring estate taxes or liabilities.

When Thelma passed in 2008, the estate tax deduction no longer applied and 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 led to increased taxes and expenses. 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.

The circuit court ruled in favor of Boardman and dismissed the case. The children appealed and the appeals court affirmed. The Wisconsin Supreme Court affirmed the appeals court and determined that the legal malpractice suit was properly dismissed.

The Wisconsin Supreme Court restated the general rule that attorneys are not liable to third parties for acts committed within the attorney-client relationship. An exception to this was the situation set forth in the 1983 case Auric v. Continental, where an attorney was found liable for failing to obtain a signature, invalidating a will. This case was distinguished in that the attorney’s actions thwarted the descendant’s intent. 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.

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 marketing@pattersonlawfirm.com.