As the daughter of a lawyer, I’ve heard my dad say this in jest for as long as I can remember.  We all can probably recite the punchline when asked, “How do you know when a lawyer is lying?” or fill in the blank to some form of “How many lawyers does it take to __________?”  As lawyers, we can appreciate some good-natured ribbing about our profession once in a while.  Yet, we know our clients value us and the work we do, particularly when they ask us to serve as the trustee of the trust we just created.  “Trust me, I’m a lawyer” simply has a different connotation in the context of estate work.

When crafting someone’s estate plan, trust and estate lawyers are frequently asked to be trustees.  After all, you may know the client and their circumstances well, and they may not have a family member who can or is willing to be appointed as a trustee.  But if you prepared the trust, can you serve as trustee?  As the answers to most legal questions begin, it depends.

Comment 8 to ABA Model Rule 1.8 permits a lawyer, or a lawyer’s partner or associate, to be named as the executor of a client’s estate or another “potentially lucrative fiduciary position,” such as a trustee.  In other words, it is not a prohibited transaction under Rule 1.8. However, the Comment cautions that appointment as a trustee is subject to the general conflict rules, specifically Rule 1.7.  This rule addresses the potential dilemma when there is a significant risk the lawyer’s interest in obtaining the appointment materially limits their independent professional judgment about advising the client concerning the choice of another fiduciary. As such, obtaining the client’s informed consent about the conflict, as well as the nature and extent of the lawyer’s potential financial interest in serving as trustee, is critical.  Lawyers should also discuss and document the availability of alternative trustee candidates, including family members or professional trustees.  Of course, you should always check your jurisdiction’s rules and laws concerning a trustee appointment. 

In addition to potentially holding client assets and administering the trust according to its terms, being a trustee also comes with certain fiduciary duties, including the duty of loyalty, impartiality, and confidentiality.  While it can be a short-term appointment if all the trust assets are immediately disbursed to the beneficiaries, you might have to assume a more long-term role depending how the trust is structured, which may be a factor in whether you should accept the appointment. After all, you already have a fiduciary relationship between you and your client by way of the attorney-client relationship. Does adding these additional (or arguably expanded) fiduciary duties by becoming trustee best serve you and your client?  Again, it depends.  Even if you seek assistance from professional investment advisors and accountants, consider whether you have the bandwith to take on this role.  Is it worth the risk? 

All kidding aside, you should carefully evaluate whether you can serve as trustee of a trust you created.  Although it may be permissible under the Model Rules and your state laws, consider whether you can ethically satisfy the fiduciary duties as their lawyer and now as trustee.  Some lawyers may accept the appointment without much thought, opening them up to a potential legal malpractice claim and civil suit related to their breach of fiduciary duties as trustee.  Avoid becoming an unfortunate lawyer joke and thoughtfully assess if you can serve as trustee under the laws of your jurisdiction and your client’s unique circumstances.  It is no laughing matter.