Article on the Representation of Fiduciaries
Kennedy Lee recently published an articleentitled, Representing the Fiduciary: To Whom Does the Attorney Owe Duties?,37 ACTEC L.J. 469 (Winter 2011). Provided below is the beginning of hisintroduction:
A fiduciary relationship is a familiar concept to attorneys.When representing a client, attorneys are expected to “act with commitment anddedication to the interests of the client and with zeal in advocacy upon theclient’s behalf.” Judge Cardozo eloquently explained that fiduciaries, whichinclude attorneys, should act with “the punctilio of an honor the mostsensitive.” However, even though an attorney owes a high degree of diligenceand commitment to a client, questions abound regarding the attorney-clientrelationship when the client is acting in a fiduciary capacity. Thesesituations can arise when an attorney represents a conservator, a guardian, acustodian under the Uniform Transfers to Minors Act, an agent acting under apower of attorney, a trustee of a trust, or a personal representative of anestate. These last two situations, a trustee and a personal representative, arelikely the most common and therefore will be the primary examples used in thispaper.
When an attorney represents a fiduciary, some confusion existsas to who the real client actually is and to whom the attorney owes fiduciaryduties. Most theories suggest that the client is either the fiduciary, thebeneficiary, the estate, or some combination thereof. Unfortunately, courtshave not been uniform in answering this question, leaving attorneys withoutclarity and guidance. While most jurisdictions have no law on this issue, thevarious jurisdictions that have attempted to provide direction in this areahave adopted one of three major approaches: (1) the traditional theory, underwhich the attorney represents only the fiduciary, (2) the joint-client theory,under which the attorney represents the fiduciary and the beneficiary, or (3)the entity theory, under which the attorney represents the trust or estate.This paper will examine each approach and some of the associated consequences.