THE AMERICAN LAW INSTITUTE Continuing Legal Education. Estate Planning for the Family Business Owner

Transcription

1 719 THE AMERICAN LAW INSTITUTE Continuing Legal Education Estate Planning for the Family Business Owner Cosponsored by the ABA Section of Real Property, Trust and Estate Law and the ABA Section of Taxation August 13-15, 2014 Boston, Massachusetts Ethics Issues in Representing Owners of Family Businesses and Their Families: Presentation Outline By David P. Dunning Michael V. Bourland

2 720 2

3 721 Speaker/Author MICHAEL V. BOURLAND Mr. Bourland is the founding shareholder of, a law firm which represent individuals, closely held and family businesses, professional practices and nonprofit entities (including charitable organizations) within its areas of legal practice. Mr. Bourland was born in on October 2, He earned a B.A. from Baylor University and his J.D. from Baylor University School of Law. He earned his LL.M. in Taxation from University of Miami, Florida. Additionally, he was a Captain in JAGC, USAF, Mr. Bourland was admitted to practice law in Texas in 1969 and is Board Certified in Estate Planning and Probate Law (Texas Board of Legal Specialization). He is a member of the American Bar Association;; State Bar of Texas and its Real Estate, Probate and Trust Law Section (Real Estate, Probate and Trust Law Council, );; Tarrant County Bar Association (Director, );; Tarrant County Probate Bar Association;; Fort Worth Business and Estate Council (Chair, );; and a Fellow of the American College of Trust and Estate Counsel. Mr. Bourland s practice is directed to business, tax, estate planning, probate, charitable entity and charitable giving law. Mr. Bourland has been/is currently a guest lecturer in estate planning at Baylor University School of Law (where he is adjunct professor of law, co-teaching the Nonprofit Organizations course), Baylor University School of Business, Southern Methodist University School of Law, University of Texas School of Law and The Center for American and International Law. He speaks regularly throughout the United States on subjects within his practice areas at seminars conducted by, among others, American Bar Association, American Law Institute, Texas Bar Association, American Institute of CPAs, Salk Institute and Texas Society of CPAs, Notre Dame, Duke and Tulane Universities. Additionally, he speaks regularly to churches and church leaders on the creation of church foundations and the governance of church organizations. Mr. Bourland has contributed on subjects within his practice areas to publications including the New York Times, Nation s Business, Business Week and Money magazine. Mr. Bourland is a co-author of Keeping Your Church Out of Court, first, second and third editions.

4 722 Author DAVID P. DUNNING David Dunning is a shareholder of, a law firm which represents individuals, closely held and family businesses, professional practices, and charitable organizations within its areas of legal practice. Mr. Dunning s practice emphasizes business planning, corporation and partnership law, and mergers and acquisitions. Mr. Dunning was born in Albany, New York on February 27, He received his B.S. degree from the Rochester Institute of Technology and J.D. degree from Baylor University. He was admitted to the State Bar of Texas in Page

5 723 Ethical Issues in Representing Owners of Family Businesses and Their Families I. Duty Of Communication II. Duty Of Confidentiality III. Duty Of Loyalty A. Conflict of Interest Directly Materially Adverse B. Conflict of Interest Intermediary C. Conflict of Interest Former Client D. Organization As Client - lawyer represents the entity, not its shareholders, officers, employees, etc. If interests adverse, lawyer explains 1) adversity of interests, 2) lawyer represents the organization, not shareholders, etc., 3) shareholders should seek independent representation, and 4) the matters discussed will not be confidential/ may not be privileged. IV. Family Representation Matters and Attorney-Client Privilege Estate and family business planning practitioner struggles with ethics rules. family lawyer represents multiple family members with varying plans, goals and interests. Ethical/legal problems in two main areas confidentially and loyalty (i.e. conflicting interests). Family lawyer representation of husband/wife in estate planning three basic models are:1) joint representation (i.e. the open relationship), 2) separate representation (i.e. the closed relationship), and 3) independent representation (each spouse has own lawyer). 1. Joint representation or open relationship, family lawyer represents husband/wife jointly to implement coordinated estate plan no secrets among lawyer and spouses and no attorney-client evidentiary privilege applies in husband/wife litigation. 2. Separate representation or closed relationship, family lawyer represents husband AND wife as separate/distinct clients. Family lawyer not disclose the confidences of one spouse to other but how satisfy confidentiality/loyalty duties? 3. Independent representation (each spouse has own lawyer) family lawyer represents husband OR wife as a separate and distinct client, to the exclusion of the other spouse. Family lawyer does not disclose the confidences of the represented spouse to the other. V. Malpractice Concerns Adverse client interests can arise any time the lawyer represents more than one person. minimize malpractice risk from family representation: A. Identifying client(s) Who am I representing? B. Defining the scope of the representation What services will I be performing? C. Recognizing conflicts D. Analyzing and resolving conflicts;; if can t resolve, resign Page