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Originally Published in the Times Reporter, New Philadelphia, October 2008
On December 14, 2005, the Ohio Supreme Court handed down a decision against a company engaged in the preparation and marketing of living trusts and other estate planning documents for the unauthorized practice of law. (Cleveland Bar Association v. Sharp Estate Services, Inc., et. al., 107 Ohio St. 3d 219, 2005.) The unauthorized practice of law is defined as “the rendering of legal services for another person by any person not admitted to practice in Ohio.” This case arose as a result of a company’s use of non-attorney advisors who were determined to be engaged in the unauthorized practice of law. During meetings with customers, these non-attorneys recommended specific types of trusts or estate plans and also advised their customers of the legal consequences of their various estate planning choices. Once the customers decided to purchase an estate plan, this company did use attorneys to prepare and review these estate planning documents; however, the court determined that the attorneys were only tangentially involved in the transactions. In most of these situations, the attorneys did nothing more than enter the customers’ information into a computer program and they seldom had any contact with the customers.
In this case, the normal representation would begin with the non-attorney advisors developing prospects through a telemarketing list and then the advisor would make a sales presentation in the prospective customer’s home. A significant number of customers were targeted despite the fact that they would not benefit from a living trust. When a customer agreed to purchase a living trust package, the advisor had the customer sign a purchase agreement and write two checks. One check was payable to the advisor and the other check was payable to the reviewing attorney who was in fact selected by the advisor.
The Supreme Court of Ohio found the company to be engaged in the unauthorized practice of law and ordered the company to disclose the names of all of their Ohio customers. It was reported that the company had in fact solicited 468 living trusts and estate plans in Ohio with fees ranging from $1,995 to $2,195 for living trusts and estate planning documents for modest estates and fees in excess of $2,495 for customers with larger estates. The company was ordered to reveal the customer list to the Cleveland Bar Association so that the Cleveland Bar Association can send a letter to each of the Ohio customers informing them of the business’s conduct and suggesting that they may wish to consult an attorney of their choice to determine whether or not the documents are necessary for them.
The Court also enjoined the company from further unauthorized practice of law and required the company to pay all costs associated with the case. In addition, the court imposed a civil penalty on the company in the amount of $1,027,260 which was determined by multiplying the 468 customers by the $2,195 cost of these plans to each customer. The decision does not provide for the customers to receive a refund.
Despite this Ohio Supreme Court decision, the unauthorized practice of law still exists today. Before permitting a non-attorney to visit your home and recommend various trusts or other estate planning options for you, you should make sure that an attorney who is authorized to practice law in the state of Ohio is involved in the meetings and the development of your estate planning documents. Living trusts are not the best choice for everyone and sometimes there are much simpler and less expensive estate planning alternatives depending on your family situation. The simplest thing to do is to contact a local attorney in your area who is knowledgeable in the areas of estate planning and wills and trusts in order to obtain the best advice possible which should match your estate and trust planning needs with your specific family situation.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.