On June 17, 2010, the New York State Court of Appeals issued a ruling that permitted an Executor of an estate to bring a legal malpractice action against an attorney who allegedly committed malpractice in drafting the decedent's will. According to the executor, the attorney's malpractice caused the estate to owe estate taxes that could have been avoided with proper drafting. The ruling in the case of Estate of Schneider v. Finmann, et.al.,, overturned New York's longstanding rule that required an allegedly injured party to have "privity" -- essentially, a contractual or other relationship with attorney -- in order to have standing to bring a claim of legal malpractice.
In estate cases, the problem for parties claiming to be aggrieved by an attorneys' alleged malpractice in drafting a will or a trust is that the only party that would typically have privity with the attorney is the decedent who engaged the attorney to draft the estate plan. Since the attorney's "error" is typically not made apparent after the decedent's death, the parties that suffer the real injury -- the estate and its beneficiaries -- would lack privity with the attorney and thus have no recourse.
Over the years a majority of states have modified or eliminated the strict privity rule for estate planning matters. With this decision, the Court of Appeals is recognizing that privity in this context is out-of-step with a more modern approach in determining liability for professional negligence.
One important qualifier in this case is that only the Executor or other fiduciary may bring a claim on behalf of the estate; individual beneficiaries still would need privity to maintain a claim against the attorney. The Court reasoned that the Executor "stands in the shoes" as Personal Representative of the decedent, who in fact had privity with the attorney. Permitting individual beneficiaries who do not have privity to bring claims, the Court concluded, "would produce undesirable results -- uncertainty and limitless liability."
I hope that one consequence of this decision is that it will convince many attorneys who only "dabble" in the field to realize that it's not worth the risk to continue doing estate planning without a thorough knowledge of the field.