Ethical Issues in Estate Planning: Essential Considerations for Legal Professionals

Question 1

When an estate planner becomes aware of a client's diminished capacity, they should:

Accepted Answer

Monitor the client's capacity closely and modify the estate plan as necessary, if possible

Answer

Continue to provide legal services as long as the client expresses a desire to do so

Answer

Immediately withdraw from representing the client

Answer

Refer the client to a geriatric psychiatrist for evaluation

Question 2

In estate planning, when is it ethically permissible for an estate planner to make decisions on behalf of an incapacitated client?

Accepted Answer

When the client has executed a durable power of attorney for health care

Answer

When the client's closest living relative provides consent

Answer

When the estate planner determines it is in the client's best interests

Answer

When the client has no living relatives or friends

Question 3

What is the primary duty of an estate planner regarding potential conflicts of interest?

Accepted Answer

To fully disclose any potential conflicts of interest to clients in writing.

Answer

To avoid conflicts of interest whenever possible.

Answer

To resolve all conflicts of interest in favor of the client.

Answer

To obtain a conflict of interest waiver from the client.

Question 4

In estate planning, the ethical principle of autonomy mandates that estate planners:

Accepted Answer

Prioritize the wishes and preferences of the client

Answer

Act solely in the best interests of the client

Answer

Maintain the confidentiality of client information

Answer

Avoid any potential conflicts of interest

Question 5

When estate planning for blended families, what ethical concern is paramount?

Accepted Answer

Ensuring fair distribution of assets among children from different marriages

Answer

Prioritizing biological children in wills

Answer

Sharing confidential information between family members

Answer

Overriding the deceased's wishes for family harmony

Question 6

Which of these actions directly violates client confidentiality in estate planning?

Accepted Answer

Posting details of a client's estate plan on social media without their consent.

Answer

Seeking legal advice from a colleague on a complex estate plan.

Answer

Disclosing client information when legally required.

Answer

Sharing a client's estate plan details with their spouse with their permission.

Question 7

When do estate planners have an ethical obligation to report suspected elder abuse or exploitation?

Accepted Answer

When there is a reasonable belief that the client is being abused or exploited

Answer

When the abuse or exploitation is severe

Answer

When the client explicitly requests that the report not be made

Answer

When the client is a minor

Question 8

To ensure they provide competent and up-to-date advice to clients, which action is essential for estate planners to prioritize?

Accepted Answer

Regularly attending continuing legal education (CLE) courses

Answer

Relying solely on their existing knowledge and experience

Answer

Consulting with other estate planners only when necessary

Answer

Occasionally reading legal journals and articles

Question 9

Regarding confidentiality, an estate planner's primary ethical duty is to:

Accepted Answer

Uphold the confidentiality of all client communications

Answer

Disclose any confidential information to beneficiaries upon request

Answer

Waive confidentiality only in cases of suspected illegal activity

Answer

Inform the testator's family of any confidential matters

Question 10

When drafting estate planning documents, a primary ethical consideration for estate planners is:

Accepted Answer

Ensuring that the client's wishes are accurately reflected in the documents

Answer

Minimizing tax liability as the primary objective

Answer

Inserting provisions that benefit the estate planner

Answer

Using complex language to protect the client's interests

Question 11

Which of the following actions would constitute a violation of fiduciary duty by an estate executor?

Accepted Answer

Using estate funds for personal gain

Answer

Distributing assets according to the will

Answer

Investing estate assets in a diversified portfolio

Answer

Filing estate tax returns on behalf of the estate

Question 12

What is the primary purpose of written engagement letters in estate planning?

Accepted Answer

To clearly document the scope of services, fees, and ethical obligations

Answer

To waive the attorney-client privilege

Answer

To establish a binding contract between the estate planner and the client

Answer

To serve as a marketing tool for the estate planner

Question 13

Which action by an estate planner would violate the duty of competency?

Accepted Answer

Advising a client on complex estate planning matters without seeking consultation from experts in relevant fields.

Answer

Staying up-to-date on the latest changes in estate planning laws and regulations.

Answer

Explaining legal concepts to a client in a clear and understandable manner.

Question 14

What is the primary objective of ethical codes in estate planning?

Accepted Answer

To safeguard the interests and well-being of clients.

Answer

To promote public confidence in the legal system.

Answer

To regulate the profession of estate planning.

Answer

To ensure that estate planners are adequately compensated.

Question 15

Which principle is NOT included in the American Bar Association's Model Rules of Professional Conduct?

Accepted Answer

Prioritizing personal interests above client interests.

Answer

Diligence in representing clients.

Answer

Competence in legal matters.

Answer

Loyalty to clients.

Question 16

What is the primary purpose of obtaining informed consent in estate planning?

Accepted Answer

To ensure that clients fully comprehend the nature and implications of their estate planning decisions.

Answer

To comply with legal formalities.

Answer

To protect estate planners from potential liability.

Question 17

Which strategy is most effective in preventing ethical conflicts in estate planning?

Accepted Answer

Disclosing potential conflicts of interest to clients and obtaining their informed consent in writing.

Answer

Refusing to represent clients with whom there is a potential conflict of interest.

Answer

Avoiding any personal or financial relationships with clients.

Question 18

**Ethical Principle** In estate planning, which core ethical principle requires professionals to act in the best interests of their clients and avoid potential conflicts of interest?

Accepted Answer

Fiduciary Duty

Answer

Confidentiality

Answer

Objectivity

Answer

Competence

Question 19

**Disclosure Obligation** An estate planner has an ethical obligation to promptly disclose any potential conflicts of interest to clients. This obligation is rooted in which ethical principle?

Accepted Answer

Disclosure

Answer

Competence

Answer

Confidentiality

Answer

Loyalty

Question 20

**Duty of Competence** Estate planners have a duty to provide competent legal advice to clients. Which action would constitute a breach of this duty?

Accepted Answer

Providing advice on specialized estate planning matters without adequate expertise

Answer

Explaining estate planning options clearly

Answer

Citing legal statutes and case law in estate planning documents

Question 21

**Non-Ethical Concern** Which consideration is NOT considered an ethical concern in estate planning?

Accepted Answer

Maximizing tax efficiency in an estate plan

Answer

Providing competent legal advice

Answer

Avoiding conflicts of interest

Answer

Ensuring client confidentiality

Question 22

**Conflict of Interest** An estate planner learns that a client intends to bequeath a significant asset to the planner in their will. What action should the planner take to address this conflict of interest?

Accepted Answer

Decline the bequest and advise the client to consult with independent legal counsel

Answer

Disclose the conflict of interest but accept the bequest regardless

Answer

Accept the bequest and amend the will

Question 23

**Consequences of Unethical Conduct** Which potential consequence may an estate planner face for violating ethical principles?

Accepted Answer

Disciplinary action from the state bar association

Answer

Increased demand for their services

Answer

Enhanced reputation within the legal community

Answer

Improved client satisfaction

Question 24

**Professional Guidance** Which professional organization has established ethical guidelines for estate planners?

Accepted Answer

American Bar Association

Answer

National Association of Estate Planners & Councils

Answer

American Institute of Certified Public Accountants

Answer

Financial Planning Association

Question 25

**Client Autonomy and Ethics** An estate planner is drafting a will for a client who wishes to disinherit their estranged child. Which ethical consideration should the planner prioritize?

Accepted Answer

The client's right to testamentary freedom

Answer

The potential impact on the family dynamic

Answer

The planner's personal views on disinheritance

Answer

The child's right to inheritance

Question 26

**Role of Estate Planning Attorneys** Describe the primary role of an estate planning attorney in navigating ethical issues:

Accepted Answer

To advise clients on ethical considerations, represent their interests, and ensure compliance with legal and ethical standards

Answer

To provide only legal advice, excluding ethical considerations

Answer

To resolve ethical dilemmas on behalf of clients

Question 27

What is the primary ethical duty of an estate planner?

Accepted Answer

To provide competent and impartial advice that is in the best interests of the client

Answer

To follow the client's instructions without question

Answer

To maximize the value of the estate

Answer

To minimize taxes

Question 28

What is the purpose of obtaining informed consent in estate planning?

Accepted Answer

To ensure that clients fully understand the nature, consequences, and implications of their estate plan

Answer

To protect estate planners from liability

Answer

To document the client's wishes

Question 29

What is the ethical obligation of an estate planner who suspects that a client may be planning to commit a crime?

Accepted Answer

To report the suspected crime to the appropriate authorities

Answer

To attempt to persuade the client to change their plans

Answer

To do nothing

Answer

To withdraw from representation without disclosure

Question 30

Which principle forms the foundation for an ethical approach to estate planning?

Accepted Answer

Duty to provide competent advice

Answer

Avoiding probate

Answer

Benefiting all family members equally

Answer

Minimizing taxes

Question 31

An estate planner has a close personal relationship with a prospective client. What should the estate planner do?

Accepted Answer

Refer the client to another qualified estate planner

Answer

Offer the client a special discount

Answer

Proceed with estate planning without disclosing the conflict

Question 32

An estate planner is requested to prepare a living will for a client who wishes to die with dignity, but their spouse strongly objects. What is the ethical course of action?

Accepted Answer

Respect the client's wishes and prepare the living will

Answer

Convince the spouse to support the living will

Answer

Prepare the living will only if the spouse consents

Question 33

An estate planner is representing a client who wants to disinherit their child. The planner knows the child is financially struggling and relies on the inheritance. What ethical obligation does the planner have in this situation?

Accepted Answer

Inform the client of the potential consequences of disinheritance and advise them to reconsider their decision.

Answer

Encourage the client to leave a small inheritance to the child to avoid legal challenges.

Question 34

An estate planner is preparing a will for a client. The client wants to leave a significant portion of their estate to a charity that the planner also supports. What ethical issue might this situation raise?

Accepted Answer

Conflict of interest.

Answer

Lack of competency.

Answer

Negligence.

Answer

Breach of confidentiality.

Question 35

An estate planner learns that their client is engaging in tax fraud to reduce their estate tax liability. What is the planner's ethical obligation?

Accepted Answer

Advise the client to cease the fraudulent activity and inform them of the legal consequences.

Answer

Report the client's actions to the IRS.

Answer

Maintain confidentiality and fulfill the client's wishes.

Question 36

An estate planner has a close personal relationship with a client's beneficiary. Which ethical principle is most relevant to this situation?

Accepted Answer

Impartiality.

Answer

Confidentiality.

Answer

Competence.

Answer

Diligence.

Question 37

An estate planner is asked to draft a will that contradicts the client's prior wishes, which the planner has documented. What is the planner's ethical obligation?

Accepted Answer

Clarify the client's current wishes and ensure they understand the potential consequences of the change.

Answer

Follow the client's current instructions, even if they contradict prior wishes.

Question 38

An estate planner discovers a potential legal issue that could affect the client's estate plan. The planner is not an expert in this area of law. What is the appropriate ethical course of action?

Accepted Answer

Refer the client to a specialist in the relevant area of law.

Answer

Attempt to research the legal issue and provide advice.

Answer

Proceed with the estate plan, acknowledging the potential legal risks.

Question 39

An estate planner is handling a complex estate plan involving multiple beneficiaries with competing interests. What ethical consideration is paramount in this situation?

Accepted Answer

Fairness and impartiality.

Answer

Confidentiality.

Answer

Diligence.

Answer

Competence.

Question 40

An estate planner is preparing a trust agreement for a client who is terminally ill. The client wishes to name the planner as the trustee. What ethical issue might this situation raise?

Accepted Answer

Potential conflict of interest.

Answer

Breach of confidentiality.

Answer

Lack of competence.

Answer

Negligence.

Question 41

An estate planner is working with a client who is considering making significant changes to their estate plan. What is the planner's ethical obligation before proceeding?

Accepted Answer

Ensure the client fully understands the implications of the changes and provides informed consent.

Answer

Proceed with the changes as directed by the client.

Answer

Advise the client to seek independent legal advice.

Question 42

An estate planner receives confidential information about a client's financial affairs. What ethical obligation does the planner have regarding this information?

Accepted Answer

Maintain strict confidentiality unless required to disclose by law.

Answer

Share the information with other professionals involved in the estate plan.

Answer

Use the information to provide the client with additional financial advice.

Question 43

An estate planning attorney learns that their client, a wealthy widower, is planning to disinherit his only child. The attorney believes this decision is driven by a recent falling-out and that the child is in genuine need. What ethical obligation does the attorney have in this situation?

Accepted Answer

Advise the client of the potential consequences of disinheritance and encourage them to reconsider, while respecting the client's autonomy.

Answer

Disclose the client's intentions to the child, hoping to mediate the situation.

Question 44

An estate planning attorney represents a client who is considering establishing a charitable remainder trust. The attorney has a significant financial stake in the same charity. What ethical obligation does the attorney have?

Accepted Answer

Disclose the conflict of interest to the client and obtain informed consent before recommending the trust.

Answer

Recommend the trust without disclosing the conflict.

Question 45

A young estate planning attorney receives a referral from a well-established, senior attorney. The senior attorney requests a portion of the fees earned from the referral. What is the ethical issue presented here?

Accepted Answer

This arrangement could constitute a prohibited referral fee under ethical rules, potentially violating the client's right to independent counsel.

Answer

The arrangement is acceptable as long as it's disclosed to the client.

Question 46

An estate planning attorney is asked by a client to draft a will that leaves a significant portion of their estate to a particular charity. The attorney knows the charity has a history of financial mismanagement. What is the attorney's ethical responsibility?

Accepted Answer

Advise the client of the charity's history and potential risks associated with the bequest, allowing the client to make an informed decision.

Answer

Discourage the client from making the bequest.

Question 47

An estate planning attorney learns that a client is considering using a revocable living trust to avoid probate. The attorney knows that the client's circumstances make probate a more advantageous option in this case. What ethical obligation does the attorney have?

Accepted Answer

Explain the benefits and drawbacks of both options, ensuring the client understands the potential consequences of each.

Answer

Advise the client to use probate instead of a revocable living trust.

Question 48

A client asks an estate planning attorney to draft a will that leaves their entire estate to their pet dog. The attorney knows that this is legally impossible. What is the ethical course of action for the attorney?

Accepted Answer

Explain to the client that their wishes are legally impossible and suggest alternative solutions, such as establishing a trust for the pet's care.

Answer

Draft the will as requested, hoping it will be challenged later.

Question 49

An estate planning attorney has a close personal relationship with a potential beneficiary in a client's estate plan. What ethical obligation does the attorney have in this situation?

Accepted Answer

Disclose the relationship to the client and obtain informed consent before proceeding with the representation.

Answer

Maintain confidentiality and proceed with the representation without disclosing the relationship.

Question 50

An estate planning attorney discovers that their client has been engaging in tax fraud. What is the attorney's ethical obligation?

Accepted Answer

Advise the client to seek legal counsel regarding the tax fraud and consider informing the relevant authorities, depending on the severity and nature of the fraud.

Answer

Maintain confidentiality and avoid involvement in the matter.

Question 51

A client asks an estate planning attorney to draft a will that leaves a significant portion of their estate to a specific political organization. The attorney strongly disagrees with the organization's political stance. What is the attorney's ethical obligation?

Accepted Answer

Respect the client's wishes and draft the will as instructed, while remaining objective and professional.

Answer

Refuse to represent the client due to their personal beliefs.

Question 52

An estate planning attorney is contacted by a potential client who is considering hiring them for a complex estate plan involving multiple trusts and beneficiaries. The attorney has limited experience with this type of complex planning. What is the attorney's ethical responsibility?

Accepted Answer

Inform the potential client of their limited experience and recommend seeking an attorney with more expertise in complex estate planning.

Answer

Accept the client and undertake the task, hoping to learn on the job.