Exam Number 30302

Tuesday evening Class

Question 1

The issue is whether the lawyers action in drafting the

will that provided a bequest to himself was proper and

ethical. Rule 1.8(c) of the model rules states that a lawyer

shall not solicit any substantial gift from a client, including a

testamentary gift, or prepare on behalf of a client an

instrument giving the lawyer or a person related to the

lawyer any substantial gift unless the lawyer or other

recipient of the gift is related to the client. The comments

on this rule state that the gift would not be prohibited but

could be voidable based on undue influence.

Here, Counsel prepared a will for Adam while he was on

his deathbed after an accident. The will stipulated that Cal,

Adams brother get $50,000, counsel got $100,000, and the

rest of the estate was left to Ben, Adams friend. The will was

then signed by Adam and was signed by witnesses. The will

was prepared properly. However, according to Model rule

1.8(c) a lawyer should not prepare an instrument for a client

that leaves a gift to the lawyer. Counsel prepared an

instrument that left him $100,000 from Adams estate. This

would constitute a substantial gift. The gift left to counsel

could be voidable. If counsel was assured that the client

wanted to leave him something in the will, he should urge

the client to have another lawyer prepare the document.

Another option would be to have another lawyer look over

the document and give Adam legal advice on it. After that,

Adam would have to give conformed consent in order to

ensure that the gift was ethical.

If Counsel was sure that Adam wanted to leave him the

$100,000 dollars, and the gift was ethical, he should either

have another lawyer prepare the document or at least have

another lawyer look over the document and have Adam give

informed consent.

Question 2

The issue is whether Attorney acted ethically and

properly when after preparing an LLC. for Nick, he lent

money to Nick for the restaurant that was part of the LLC.
Rule 1.8(a) prohibits business transactions or loans with a

client unless the terms of the transaction are fair and

reasonable, and understandable to the client. Furthermore,

the client must be given an opportunity to seek independent

counsel and must consent to the loan in writing.

In this case, Attorney formed a LLC for Nicks restaurant

in order to protect Nicks personal assets. Attorney did other

business for the LLC including obtaining a liquor license and

negotiating a lease. Nick asked Attorney for a loan of

$100,000. Rule 1.8(a) does not prohibit this loan as long as

the terms are fair and reasonable, the loan is agreed to in a

signed writing and the client has an opportunity to seek

counsel about the loan. The facts of the case do not tell us

about the terms of the loan, or if Nick had an opportunity to

seek legal counsel. However, the loan was agreed to in a

signed writing.

As long as the terms of the loan are fair, and Nick had

an opportunity to seek legal counsel about the loan,

Attorneys actions are ethical and proper.