Wills, Trusts and Estates- Professional Liability Fact Sheet

Description of practice area

The practice area includes legal services dealing with all aspects of the analysis and planning for the conservation and disposition of wills, trusts, and estates. Claims arising from both federal and state estate and gift taxes are included here. Also included within this are of practice are the preparation of legal instruments in order to effectuate estate plans, administer estates (including tax-related matters, both federal and state), professional services involving trust planning, guardianships, custodianships, and conservatorships.

 

Frequency of Wills, Trusts and Estates Claims

Claims frequency for the wills, trusts and estates practice area at CNA surged during the economic downturn of 2008, peaking in 2010. Today, claims frequency for wills, trusts and estates remains markedly higher than prior to the recession and constitutes the #1 area for claims frequency.

 

Claim counts arising from Wills, Trusts and Estates have risen from an average of about 120 claims per year in 2008 to about 210 claims per year in 2014.

 

Quick Stats

  • Average of 500 claims reported per year
  • Average of 220 claims paid per year
  • Average cost per claim: $100,000
  • Average yearly cost of all wills, trusts and estates claims: $23 million
  • #1 claims area by count

Source: CNA Claims Data 2006-2014

 

Top causes of Wills, Trusts and Estates Claims

The most frequently alleged cause of wills, trusts and estates claims is improper document drafting or recording. The second most common cause is improper handling or disbursement of funds.

 

Erosion of the privity defense

(As of September 2016)

The erosion of the privity requirement has led to an increase in malpractice claims. The majority of states generally require privity, but have carved out one or more exceptions to this rule. The most common exception enables a third party to bring a claim where the third party can prove that it was the intended beneficiary of the transaction. Another narrower version of the exception first requires a showing that the client’s intent has been frustrated by the attorney’s conduct. A handful of states permit claims brought on behalf of the estate by a personal representative of the client.

 

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