Shielding Aged From the Unscrupulous : Judge Sends the Right Message in Stripping Two Attorneys of Control of Estates

Superior Court Judge Tully H. Seymour has been sending the right message in recent weeks about lawyers who take advantage of the elderly financially. Three times he moved to strip control of estates in instances where he found abuse of trusts.

The most recent case involved Laguna Beach lawyer Donald Bruce Black, who the judge said had used a client’s trust as “a lending vehicle for his own needs.” According to Seymour, the lawyer could not properly account for millions he had spent from an elderly woman’s trust fund over the past three decades. Black has denied any wrongdoing.

Earlier, Seymour removed Laguna Hills laywer James D. Gunderson as trustee from two estates, one where Gunderson allegedly arranged to inherit $3.5 million under questionable circumstances, and another where authorities reported they could not account for assets valued at $800,000.

Seymour’s focus on the abuse of “living trusts” should serve as a catalyst for reform. He suggests, sensibly, that there ought to be a prohibition on attorneys drawing up trusts that put them in a fiduciary role. He argues for the trust to be set up by an independent attorney who cannot assume power over the assets.

Unscrupulous lawyers are able to persuade senior citizens that a living trust arrangement, as presently constituted, is a way to avoid federal inheritance taxes and probate court fees. But without some independent curbs on this abuse, it is the lawyers themselves who will ultimately lose out.

State Bar officials shrewdly recognize the danger of having any bad apples in their barrel; they have asked a committee to consider provisions to discipline attorneys for drafting wills and trusts that bestow large gifts of stock, money or property on them.

The Gunderson case should serve as a catalyst for reform, too. He says he’s represented more than 7,000 residents of Leisure World in Laguna Hills, but has been accused, in court documents filed by relatives and heirs of some of his clients, of having prepared numerous wills making himself the recipient of millions of dollars in cash, stock and real estate. He too has vigorously denied any wrongdoing.

Investigations by Seymour, the Orange County Sheriff’s Department, the State Bar of California and the Orange County Bar Assn. are a start. But California should join many other states in having stronger legislation protecting the elderly from unscrupulous lawyers.