(Formerly Standard 05c)
PGTS Standard
4c. If the above attorney is engaged in the drafting of wills, trusts, or other estate planning documents for the donor(s), there is:
(1) An engagement letter setting forth the basic financial arrangement of who pays the fee, and
(2) A full disclosure statement and conflict of interest waiver are provided to and signed by the donor(s).
NOTE: The foregoing Standard 4 is not intended to preclude a situation where disclosure is made to the donor(s) that the attorney represents only the denominational organization, and the donor(s) decline(s) a recommendation to obtain independent legal counsel. [PGO, PGP, PGTS]
This article is the last in a series of three articles that have dealt with the nuances of North American Division (NAD) Planned Giving & Trust Services (PGTS) Standard #4 covering the Professional Ethics of Legal Counsel policy (see NAD WP BA 30). The previous two articles may be found on the FAQs on the NAD PGTS Standards page on the staff.willplan.org website.
Transparency
NAD PGTS Standard 4c.1, 2, details the specific documents attorneys must provide to organizations’ donors to be transparent with the donor. Everything we do in our NAD PGTS organizations should be donor-focused and donor-driven.
Standard 4c applies to attorneys who work directly for, or on behalf of, the organization and concurrently represent the donor(s). Independent legal counsel retained solely by the donor, paid by the donor, and representing only the donor are not bound to standard 4. It is up to the independently retained attorney to establish their own statements of retention and/or disclosure. Your organization is not part of the independent relationship between the donor(s) and their attorney.
Attorney Engagement Letter
Section 4c.1 clearly states if your organization’s attorney has opined that your jurisdiction permits dual representation, and your donor chooses to use an attorney who also represents your organization, thereby declining independent legal counsel, then the attorney must issue an engagement letter. This engagement letter explains how the attorney-client relationship works and who is responsible for payment of their services. The letter must be signed by the donor and kept in the donor file, with a copy given to the donor.
Disclosure of Conflicts
While section 4c.2 also requires this same attorney to disclose all potential conflicts that could arise from the donor’s choice of concurrent legal representation rather than independent representation, the donor must sign acceptance and acknowledgment of the disclosures that are made. An original of the signed disclosure will be kept in the donor file. It is a best practice that the donor is given a copy of the disclosure for their records and remembrance.
Note
The note at the end of Standard 4 pertains to all parts of the standard and is intended to clarify that the standard does not prevent, or make impossible, a situation in which the attorney represents only the organization. The attorney must give appropriate disclosures to the donor that clearly state the attorney represents only the organization, and the donor is advised to seek their own legal counsel. Of course, the donor would have the right to decline their right to find their own legal counsel if they so choose.
In summary, the donor should be very clearly informed of the donation process, who pays for the services, and what their choices are for attorney representation. Each document that describes these donor choices should be signed by the donor and placed in their file as evidence they have been given this important information.