Morrison Mahoney Partner Bob Gunning recently obtained a no cause on behalf of his clients, an attorney and the law firm following binding arbitration with a retired Superior Court Judge.
The case went on for seven years due to COVID, illness and the death of the attorney in 2022. The legal malpractice complaint was filed in 2018 and arose out of a will and estate planning/trusts that were created in June 2012, in which the estate was liable for a sum of federal generation skipping (GST) taxes.
Although the decedent was advised in writing about the GST tax of 35% if there was no federal GST exemption, the estate alleged that the attorney failed to advise the decedent of the “six figure” GST tax liability. The decedent had used his GST exemption to create a Dynasty Trust, but after he signed the will, he later named his six grandchildren as his IRA beneficiaries.
In 2017, the estate retained new counsel who recommended that the IRA beneficiaries/grandchildren pay the GST taxes and that both the estate and the beneficiaries file legal malpractice claims against the clients. Discovery confirmed that the estate did not pay the GST taxes and summary judgment was granted in January 2024, since the estate sustained no actual damages. In January 2025, the beneficiaries’ third-party legal malpractice claim went to binding arbitration with written summations after the two day trial. The Judge found that the beneficiaries could neither establish an attorney-client relationship since there was no reliance, nor that the attorney proximately caused an injury to the beneficiaries.
