Indiana Supreme Court Busts Insurance Agency for Unauthorized Practice of Law

Starting in 1995, United Financial Systems Corporation (UFSC) marketed and sold estate planning services, including wills and trusts. Once a client agreed to the estate planning work, a UFSC assistant would gather the information and send it to an outside counsel. Outside counsel would send the work back to the assistant who presented and “managed” the plan as well as sold the client insurance products. 

The Indiana Supreme Court found this to be the unauthorized practice of law and ordered UFSC to stop these practices. The Court also ordered the firm to refund fees to post-2006 clients. The Court did not like:

• That the plan was not sold by a licensed attorney
• That the assistant made more in fees than the outside counsel
• That the client did not have contact with the outside counsel

Tips for avoiding the unauthorized practice of law:

• Don’t charge fees for services that involve the drafting of legal documents
• Make sure that the attorney actually drafting the documents interacts with the client

See Roccy DeFrancesco, Insurance Agency Busted for the Unauthorized Practice of Law, The Wealth Preservation Institute, April 23, 2010. 

Special thanks to Jim Hillhouse (Wealth Counsel) for bringing this to my attention.