On Nov. 18, 2009, the Appellate Court of Illinois, 3rd District published its
opinion in Dunn v. Patterson, 2009 Ill. App. LEXIS 1112 (3d Dist. 2009).
This case is significant because it examines the unusual intersection of
principles of trust law concerning the modification of a trust and an attorney’s
professional duties to his or her clients. It also highlights an expanded use of
trust protector provisions that may become more popular with an aging
generation, and may require more diligence and disclosure on the part of the
I. Dunn v. Patterson
Lawrence Patterson was an estate planning attorney for Charles and Charlotte
Dunn. In June 2006, Patterson prepared, and the Dunns signed: (1) a joint
revocable trust; (2) a living will for each spouse; and (3) a durable power of
attorney for each spouse. The estate planning documents contained “Modification
Provisions” that required Patterson’s written consent or a court order to amend
or revoke the documents. Patterson routinely inserted the Modification
Provisions into his estate planning documents in an effort to prevent elder
Several months after the documents’ execution, another attorney, Timothy
McJoynt, mailed Patterson a letter to inform him that the Dunns had retained
McJoynt to modify the estate planning documents Patterson previously prepared.
McJoynt sought Patterson’s consent to remove the Modification Provisions and to
make other changes. In Patterson’s reply, he explained that he would not consent
to the proposed changes until he had an opportunity to meet with the Dunns and
determine whether the changes were consistent with the estate plan and otherwise
in the Dunns’ best interests.
The Dunns did not meet with Patterson. Instead they filed suit against him,
seeking a declaratory judgment that they had an absolute right to revoke and
amend their estate plan and that Patterson was obligated under Illinois’ Rules
of Professional Conduct to follow their directions. The circuit court entered
judgment on the pleadings in favor of the Dunns, finding that the Modification
Provisions were void as against public policy under the Illinois Rules of
Professional Conduct, which required Patterson to abide by the Dunns’
directions. The circuit court also imposed sanctions against Patterson in the
amount of the Dunns’ legal fees.
On appeal, Patterson argued that the Modification Provisions were not
contrary to public policy and that the trial court abused its discretion in
sanctioning him. Patterson asserted that third-party consent provisions, such as
the Modification Provisions, are valid under Illinois law. Patterson cited to
comment j of section 63(3) of the Restatement (Third) of Trusts which provides,
[i]f the settlor reserves a power to revoke or modify the trust with the consent
of [another], such as the trustee, [a beneficiary], or a third party, the power
normally cannot be exercised without that consent.
The Dunns urged that although such limitations on trust modifications are
generally appropriate, such limitations should not be permissible when the
required consent is that of the drafting attorney, as attorneys are held to
higher standards than lay people under the Rules of Professional Conduct.
Accordingly, the Dunns argued that public policy, as embodied by the Rules of
Professional Conduct, requires attorneys to follow the direction of their
clients, so long as the direction is neither unethical nor illegal.
The appellate court found that third-party consents are a legally recognized
manner of protecting individuals from changing their estate plan documents due
to mental incompetency or undue influence. The court agreed with Patterson’s
contention that designations such as those found in the Modification Provisions
were consistent with the fiduciary duties an attorney owes to the attorney’s
clients. The court found that a drafting attorney could act in a fiduciary
capacity to give the attorney’s consent to modifying estate plan documents where
the attorney does not have a financial stake in an estate. Moreover, the court
found that the Dunns’ ability to discharge Patterson as their attorney was not
impacted by Patterson’s continuing duties under their estate plan with respect
to the Modification Provisions.
The court also found it reasonable that Patterson should, at a minimum, wish
to meet with the Dunns before consenting to changes in their estate plan. This
meeting was necessary to give Patterson the opportunity to assess whether the
Dunns were competent or otherwise acting without undue influence. The court
noted that if Patterson had consented to the requested changes without first
meeting the Dunns, and then the Dunns’ were subsequently deceived into
separating from their assets, that Patterson would then likely be sued for
consenting to the modifications.
Accordingly, the court reversed the judgment holding the Modification
Provisions void as against public policy. Additionally, the court reversed the
award of sanctions against Patterson, finding that his conduct in the case was
not only reasonable, but that it was “admirable and consistent with the highest
ideals of the bar.”
II. Trust Modification in Illinois and Other Jurisdictions
The holding in Dunn with respect to the Modification Provisions is
consistent with a long line of Illinois cases that provide the basic rule that
where the method of exercising a power to modify a trust is described in a trust
instrument, the modification can only be made in the described manner. Parish
v. Parish, 29 Ill. 2d 141, 149 (1963).
This rule has been applied to invalidate a purported trust amendment by the
surviving co-settlor where the trust instrument required both settlors to amend
the trust (Williams v. Springfield Marine Bank, 131 Ill. App. 3d 417 (4th
Dist. 1985)), and in circumstances where the method of execution and delivery of
a purported trust amendment was not completed as specified in the trust document
(Northwestern Univ. v. McLoraine, 108 Ill. App. 3d 310 (1st Dist. 1982)).
Dunn is unique in that the court references the Restatement (Third) of Trusts
(as suggested by Patterson) while older Illinois cases generally rely on section
331 of the Restatement (Second) of Trusts, which provides at comment e: “If the
settlor reserves a power to modify the trust only with the consent of one or
more of the beneficiaries, or of the trustee, or of a third person, he cannot
modify the trust without such consent.” Dallinger v. Abel, 199 Ill. App. 3d
1057, 1060 (3d Dist. 1990).
Other jurisdictions, such as California and New York, also recognize the
validity of restrictions on trust modification and revocation, and specifically
those requiring third-party consent or a specific method of amendment in order
to protect trust settlors from the undue influence of those that seek to benefit
from a trust’s assets. See Conservatorship of Irvine, 40 Cal. App. 4th
1334, 1344-45 (Cal. App. 4th Dist. 1995) (citing among other authorities, the
Restatement (Second) of Trusts); and In re Mordecai, 24 Misc. 2d 668,
670-71 (N.Y. Sup. Ct. 1960) (citing New York common law and the Restatement
(First) of Trusts). Like many other states, California and New York have also
adopted specific statutes concerning the proper methods of trust amendment and
revocation. See Cal. Prob. Code § 15401 and NY CLS EPTL § 7-1.17.
The Dunn case follows a long line of Illinois cases upholding the
validity of restrictions on trust modification that require third-party
consents. In this regard, Dunn is consistent with the approach adopted by the
Restatements of Trust and the common law of Illinois and other jurisdictions.
However, Dunn’s significance lies at the intersection of established
principles of trust law and the fiduciary duties an attorney owes to the
attorney’s clients. The Dunn Modification Provisions were valid because
the clients and their attorney created a method to protect the clients’ best
interests in the event the clients’ capacities were later diminished and the
attorney did not otherwise stand to benefit from the clients’ estates.
Although Patterson was successful in the action brought against him by the
Dunns, his success was not without considerable cost. Moreover, any individual
or corporation should be especially mindful of the inherent risks of taking on
responsibilities beyond the normal responsibilities of a trustee, whether in a
full or limited capacity, even when the law as to the underlying trust law
principle appears clear.
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