New York Finds Privity Between Estate and Estate Planning Attorney

The New York Court of Appeals decided unanimously that privity exists between an estate and an estate planning attorney, allowing the personal representative of an estate to bring a legal malpractice claim against an attorney for negligently planning the estate. In deciding this, New York joined the majority of states.

This ruling reinstates the malpractice claim filed by the estate of Saul Schneider against estate planning attorney Finmann who gave Schneider faulty advice regarding a life insurance policy.  Finmann argued that privity did not exist between himself and the estate and that any damages suffered by Schneider’s estate were not suffered by his client, Schneider. To rebut Finmann’s argument, Judge Jones cited a Texas Supreme Court case, Belt v. Oppenheimer, Blend, Harrison, & Tate Inc., 192 S.W.3d 780 (2006), which established that an estate essentially “stands in the shoes” of a decedent and has the “capacity to maintain the malpractice claim on the estate’s behalf.” Id. at 787.

Strict privity will still be required for malpractice suits against estate planning attorneys filed by beneficiaries or other third parties absent special circumstances.

See Estate of Saul Schneider v. Victor M. Finmann.  See also Joel Stashenko, Panel Relaxes Rule, Allows Estates To Sue Attorneys for Malpractice, New York L. J., June 18, 2010.   

Special thanks to Richard Barnes (attorney, Valdosta, GA) for bringing this to my attention.