Court of Appeals Rules there is Privity between the Estate Planner and the Client’s Personal Estate Representative: But no Privity to Beneficiaries of the Estate

The traditional protection from legal malpractice claims afforded Estate practitioners by the doctrine of Privity has been relaxed by a recent New York Court of Appeals decision.

In the Estate of Saul Schneider v Finmann[i], a unanimous Court of Appeals has ruled that a personal Estate representative “stands in the shoes of the decedent,” and therefore has “the capacity to maintain a malpractice claim on the Estate’s behalf[ii].”

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“Attorney Client Privity is Alive and Well Now, Even when You’re Dead”

Until quite recently, Estate practitioners were protected from Estate planning malpractice claims by Estate representatives by the often overlooked protections afforded by the doctrine of Privity. However, with their unanimous June 2010 decision in the Estate of Saul Schneider v Finmann[i], the New York Court of Appeals has relaxed this traditional safeguard and allowed for a new cause of action in the State against a negligent Estate planning attorney.

Although the Schneider decision represents a marked change from the prior bar on suits by personal representatives against a negligent Estate planning attorney, its rationale is far from revolutionary, and its rather narrow ruling endeavors to balance the interests of both Estate representatives and their legal counsel.