Lawyer who drafted will for his client received majority of $17 million estate
I recently found an unusual story in the Detroit Free Press, Lansing Bureau. Mark Papazian, a lawyer, drafted estate documentation for a client, Robert Mardigian. A will and trust left approximately $14 million to Mr. Papazian, even though there was a specific rule in the Michigan Rules of Professional Conduct prohibiting a lawyer from preparing a will for a client who is not related to the lawyer if it includes a substantial gift to the lawyer. Apparently, the two had been close close friends for 30 years.
Mr. Mardigian passed away in January 2012 from lung cancer. He was divorced and did not have any children. His brother, Edward Margidian argued that he and his children were the lawful heirs to the $17 million estate as the will should be invalid since it violated the Rules and public policy. In November of 2013 a probate Judge sided with Edward Margidian and the other survivors. This was reversed on appeal as the Michigan Court of Appeal decided 2 to 1 that the violation of the Rules of Professional Conduct did not invalidate the will and trust. As Mr. Papazian drafted the documentation for Mr. Mardigian, the Court of Appeal decided that there was a presumption that there was undue influence on Mr. Mardigian. It was up to Mr. Papazian to adduce evidence to set aside the presumption. The matter was sent back to Probate Court.
The full story can be found here.
The lesson in this scenario is that a lawyer should be careful if he or she is ever put in a situation where she is drafting a will for a client making the lawyer a beneficiary of the estate. An estate lawyer in this situation should carefully review the Rules of Professional Conduct that govern his or her jurisdiction to ensure that his or her actions do not amount to a breach of the rules. If the testator’s last wishes are for the lawyer to receive a substantial gift from the estate, the lawyer should come up with a way to fulfil the client’s wishes without breaching the Rules.
This is especially true in a case involving a multi-million dollar estate of which the lawyer is receiving a substantial portion. It should be obvious that any potential beneficiaries who who otherwise stand to receive millions of dollars will immediately scrutinize the estate plan and launch a will challenge if there is even a remote chance the estate plan can be deemed invalid.
Furthermore, the Michigan Court of Appeal placed the onus on the lawyer to rebut the presumption of undue influence. This places the lawyer in a difficult position as he must come up with evidence that there was no undue influence after the testator has already passed away.
It is important to note that in Ontario a similar scenario would likely be captured by Rule 3 “Relationship to Clients” of the Rules of Professional Conduct governing lawyers, specifically section 3.4 – 38 “Testamentary Instruments and Gifts”, which states:
“Unless the client is a family member of the lawyer or the lawyer’s partner or associate, a lawyer must not prepare or cause to be prepared an instrument giving the lawyer or an associate a gift or benefit from the client, including a testamentary gift.”
It will be interesting to see what happens next in this case and whether or not Mr. Papazian will be able to rebut the presumption of undue influence.