Close friendships often develop between attorneys and their clients. These relationships can span decades and involve trust on matters ranging from business transactions to family disputes. When a grateful client wants to leave a substantial gift to the attorney who served them faithfully, the gesture seems natural and heartfelt.
Texas law takes a different view. The legal profession’s ethical rules prohibit attorneys from preparing wills that name themselves as substantial beneficiaries unless they are related to the client. This prohibition exists to protect clients from potential overreaching and conflicts of interest. The question becomes what happens when an attorney drafts a will containing such a prohibited bequest. Does the gift fail entirely? Can the attorney claim the bequest was the client’s true intent despite violating professional conduct rules?
The Texas Court of Appeals addressed these issues in Shields v. Texas Scottish Rite Hospital for Crippled Children, 11 S.W.3d 457 (Tex. App.—Eastland 2000). The case provides an opportunity to examine how public policy restrictions on attorney self-dealing affect will construction and who receives property when prohibited bequests fail.
Facts & Procedural History
Fletcher died on March 27, 1996. He had signed his will approximately ten months earlier on June 6, 1995. The will contained two substantive dispositive provisions addressing different categories of property.
Under Item IV(A) of the will, Fletcher gave all his personal property to Charles. This provision specifically listed automobiles, books, personal effects, video tapes, furniture, fixtures, and furnishings of every kind and character. The bequest would fail if Charles predeceased Fletcher or failed to survive him by thirty days.
Under Item IV(B), Fletcher made his residuary bequest. This provision stated that in memory of his daughter Leslie Anne Clark, he gave all the rest and residue of his estate to Scottish Rite Hospital in Dallas. The residuary clause covered real, personal, and mixed property subject to the above bequest to Charles. It included all property wheresoever situated and any interest Fletcher held in the estate of Dora E. Lippitt.
Charles was an attorney licensed to practice law in Texas. He had served as Fletcher’s estate planning attorney and drafted the will Fletcher signed. Charles and Fletcher were very close friends. However, Fletcher was not related to Charles by blood or marriage.
After Fletcher’s death, the estate inventory revealed significant holdings. The stocks, bonds, cash, and bank accounts totaled over $2 million in value. The tangible personal property—automobiles, books, videotapes, personal effects, household furniture and furnishings—was valued at approximately $44,900. Scottish Rite also received real property under the will valued at over $2.3 million.
Scottish Rite filed a motion for summary judgment in the Probate Court of Dallas County. The hospital argued it was entitled to the stocks, bonds, cash, and bank accounts under the residuary clause. Charles, acting as independent executor of Fletcher’s estate, filed his own motion for summary judgment claiming entitlement to all personal property under Item IV(A). The probate court granted Scottish Rite’s motion and denied Charles’s motion. Charles appealed this ruling.
Understanding the appellate court’s decision requires examining the professional conduct rules governing attorney conduct and how Texas courts apply public policy considerations in will construction matters.
Professional Conduct Rules and Public Policy in Texas
When Charles prepared Fletcher’s will in 1995, the Texas Disciplinary Rules of Professional Conduct included Rule 1.08(b). This rule provided that “a lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as a parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee.”
The rule contained several key elements. First, it prohibited lawyers from preparing instruments that gave substantial gifts to themselves. Second, the prohibition extended to gifts for persons related to the lawyer as parents, children, siblings, or spouses. Third, the rule applied to testamentary gifts specifically. Fourth, an exception existed when the client was related to the donee attorney.
Charles acknowledged his awareness of this rule. He knew the disciplinary rules prohibited lawyers from drafting wills naming themselves as beneficiaries unless the client was related to them. Despite this knowledge, Charles prepared a will for Fletcher that purported to give Charles substantial assets. Charles filed an affidavit explaining his reasons for drafting the will in this manner. However, the trial court struck portions of Charles’s affidavit under the Dead Man’s Rule and because parol evidence of certain statements Fletcher made to Charles was inadmissible.
The preamble to the Texas Disciplinary Rules states that the rules do not define standards of civil liability for lawyers and that rule violations do not give rise to private causes of action. This language might suggest the rules affect only attorney discipline rather than property rights. However, Texas courts have consistently held otherwise when public policy is implicated.
Courts distinguish between disciplinary rules as grounds for professional sanctions versus disciplinary rules as evidence of public policy. While the rules do not create private causes of action, they serve as authoritative statements of what conduct the State of Texas considers contrary to public interest. Courts therefore look to disciplinary rules when determining whether contracts or other arrangements violate public policy.
The Houston Court of Appeals explained this principle in Polland & Cook v. Lehmann, 832 S.W.2d 729 (Tex. App.—Houston [1st Dist.] 1992). That court recognized that disciplinary rules govern professional conduct rather than provide private causes of action. Nevertheless, courts may use disciplinary rules to determine whether contracts are contrary to public policy. If contracts have not been performed in accordance with requisites set forth in disciplinary rules, performance may be excused as against public policy.
The Austin Court of Appeals reinforced this approach in Whiteside v. Griffis & Griffis, P.C., 902 S.W.2d 739 (Tex. App.—Austin 1995). That court recognized that disciplinary rules are quasi-statutory and that the rules evidence public policy of the State. Multiple appellate courts have consistently used attorney disciplinary rules to determine public policy across various contexts.
This approach makes sense when considering the purposes behind professional conduct rules. The Legislature and the State Bar adopt these rules to protect the public from attorney misconduct. Allowing attorneys to benefit from conduct that violates these protective rules would undermine their very purpose. Courts therefore refuse to enforce arrangements that contravene the policies embodied in disciplinary rules.
The public policy concern becomes especially acute in the testamentary context. Clients often face declining health and increased vulnerability when executing wills. The attorney-client relationship creates a position of trust and confidence. Attorneys who draft their own clients’ wills occupy a unique position to influence testamentary dispositions. The prohibition on substantial self-bequests protects clients from potential overreaching during these vulnerable moments.
What Constitutes a “Substantial” Gift and Section 58b
Rule 1.08(b) prohibited attorneys from preparing instruments giving themselves “substantial” gifts from clients. The rule did not define what amount or percentage qualified as substantial. This left courts to determine substantiality on a case-by-case basis.
Charles argued that the $2 million in stocks, bonds, cash, and bank accounts should be considered in context. He contended that given Fletcher’s total estate value exceeding $4.3 million, the personal property bequest was not necessarily substantial. However, the Court of Appeals rejected any argument that $2 million could fail to qualify as substantial.
The court held that the gift of over $2 million in intangible personal property constituted a substantial gift as a matter of law. This holding established a clear rule that seven-figure bequests to attorneys who draft wills always satisfy the substantiality requirement. The court did not need to establish a precise dollar threshold because the amount here so clearly exceeded any reasonable minimum.
This determination makes practical sense. Few would argue that $2 million constitutes anything other than substantial wealth. The substantiality inquiry exists to distinguish truly nominal or de minimis gifts from those raising concerns about attorney influence. A $2 million bequest falls squarely within the category requiring heightened scrutiny regardless of the testator’s total wealth.
In 1997, the Texas Legislature added Section 58b to the Texas Probate Code. This section provided that a devise or bequest of property in a will to an attorney who prepared the will is void unless the attorney is related to the testator. The statute codified and strengthened the protection found in Rule 1.08(b). The statute differed from the disciplinary rule in one significant respect. Rule 1.08(b) prohibited only “substantial” gifts to attorneys. Section 58b invalidated any devise or bequest regardless of whether the gift was substantial. This broader prohibition eliminated any need for courts to determine substantiality when the statute applied.
However, Section 58b applied only to wills executed on or after September 1, 1997. Fletcher signed his will on June 6, 1995—more than two years before the effective date. Therefore, Section 58b did not govern Fletcher’s will. The court decided the case under Rule 1.08(b) and general public policy principles rather than the later statutory provision. The Legislature’s enactment of Section 58b provides interpretive guidance nonetheless. The statute demonstrates legislative recognition that attorney self-bequests in wills create sufficient public policy concerns to warrant statutory prohibition.
What Happens When Bequests Fail and Charles’s Alternative Arguments
When a testamentary provision violates public policy and therefore fails, courts must determine the proper disposition of the property. When a specific bequest fails and the will contains a residuary clause, property covered by the failed bequest typically falls into the residuary estate. The residuary beneficiary receives the property unless the will indicates a contrary intent. This principle reflects the testator’s general desire to avoid intestacy by including a residuary clause.
Fletcher’s will included a comprehensive residuary clause in Item IV(B). This clause gave “all the rest and residue of my estate, real, personal and mixed” to Scottish Rite. The clause was expressly “subject to the above bequest” to Charles. This language indicated that Scottish Rite would receive whatever remained after satisfying Charles’s bequest.
The Court of Appeals held that when Charles’s bequest failed for public policy reasons, the intangible personal property fell into the residuary estate. Scottish Rite therefore took the stocks, bonds, cash, and bank accounts under the residuary clause. This result honored Fletcher’s intent to benefit Scottish Rite with property not effectively bequeathed to Charles.
The Takeaway
The Shields decision establishes that attorneys cannot benefit from testamentary provisions they draft for clients unless related to those clients. Even substantial wealth bequeathed to attorney-drafters fails as a matter of public policy regardless of the client’s intent or the strength of their relationship. Seven-figure bequests constitute substantial gifts as a matter of law for purposes of professional conduct rules. When such bequests fail, property falls to residuary beneficiaries rather than passing by intestacy or remaining with the attorney-drafter.
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