Brother, Can You Spare $134,302.20?
The New Jersey Supreme Court has censured an attorney for misconduct in handling his late father’s estate to his sister’s detriment.
The Disciplinary Review Board set forth the conduct in a letter accepting a proposed discipline by consent
Respondent admitted knowing that his improper expenditure of Joseph’s estate’s funds for his personal benefit, prior to the settlement of Joseph’s estate, improperly reduced Sandra’s share of the estate. Moreover, respondent admitted that, in his role as executor, when he calculated the final distributions to himself and to Sandra pursuant to the Will, he intentionally failed to account for the $268,604.33 in estate funds that he had improperly disbursed to himself following Joseph’s death. Respondent further admitted that he had neither consent nor authority from Sandra to disburse the $268,604.33 in estate funds that he used for personal expenses unrelated to Joseph’s estate; he additionally admitted that he never informed Sandra, prior to the final accounting and settlement of Joseph’s estate, that he had used those funds for his personal benefit.
Consequently, respondent disbursed to himself $1,114,896.35 in estate assets, which, again, was $134,302.20 more than he was entitled to receive, pursuant to the Will. Sandra, on the other hand, received only $596,291.95 in estate distributions, which was $134,302.20 less than she was entitled to receive.
As respondent conceded, his improper disbursement of Joseph’s estate funds, for the benefit of himself and his family and to the detriment of Sandra, both reduced and delayed Sandra’s lawful distribution, in violation of RPC 1.15(b). Moreover, by intentionally failing to account for the more than $268,000 in estate funds that he had improperly disbursed to himself, and by repeatedly ignoring Sandra’s requests for a cogent, supportable accounting of Joseph’s estate funds, respondent also violated RPC 8.4(c).
DRB on sanction
In mitigation, the stipulation cited the fact that respondent’s law practice was dedicated to bankruptcy and, thus, he was inexperienced in estate administration; that the instant matter did not involve a client; and that respondent submitted multiple character letters.
In defense of his actions, respondent asserted that he had “operated with a belief that he was authorized to apply Joseph Singer’s assets in the manner that he did based on his incorrect understanding that [the Merrill POA and the 1994 POA] . . . remained in full force and effect after Joseph Singer’s death.” Those instruments provided that, contrary to law, they remained viable, even after Joseph’s death. In support of his defense, respondent provided the OAE with an expert opinion stating, in the expert’s view, that respondent’s conduct “was consistent with a common misunderstanding of how a durable power of attorney works,” and that “[r]outinely, people do not know that a power of attorney ceases to be effective upon death” of the grantor…
In mitigation, the Board considered that respondent’s disciplinary history, in almost fifty years at the bar, is limited to his 1994 reprimand. Moreover, the instant matter did not involve a client and, presumably, the 2011 settlement in the amount of $525,000, made Sandra whole. There was no additional aggravation to consider.
The DRB accepted an agreed settlement, finding no knowing misappropriation was proven. (Mike Frisch)