New Laws Urged on Drafting Wills : Legislation: Local lawmakers hope to rally senior citizens in support of bills prohibiting lawyers from making themselves beneficiaries of their clients’ estates.

Two Orange County lawmakers on Thursday called upon senior citizens statewide to mount a grass-roots campaign in support of legislation that would prevent lawyers from making themselves beneficiaries of their clients’ estates.

The call was issued by Assemblyman Bill Morrow (R-Oceanside) and state Sen. Marian Bergeson (R-Newport Beach) at a press conference in the Leisure World retirement community, not far from the offices of Laguna Hills lawyer James D. Gunderson, 68, who arranged to receive millions of dollars in cash, stock and real estate from his elderly and sometimes senile clients.

At the press conference, and later in an interview broadcast over Leisure World’s cable television system, Morrow said the jointly proposed legislation would correct “many deficiencies in the law regulating the way lawyers draft wills.”

The legislation introduced by Morrow and Bergeson, as well as another bill offered by Assemblyman Tom Umberg (D-Garden Grove) outlawing another legal device that Gunderson used to discourage legal challenges to the wills he drafted, came in response to articles appearing in The Times in recent months.

The articles revealed that Gunderson, who has boasted of representing 7,000 Leisure World retirees, had prepared numerous wills and trusts making himself a major beneficiary of his clients’ estates, despite a 1962 California Supreme Court ruling that anything more than a “modest gift” to an attorney preparing a client’s will raises questions of impropriety.

Bergeson was not able to attend Thursday’s press conference personally, but she sent a representative with a statement that “strongly urges residents to look over (their) wills.”

The legislation she and Morrow are sponsoring would invalidate any bequests to lawyers who arrange for preparation of wills bequeathing them gifts. It would also make it illegal for guardians of estates to deposit client funds in a financial institution in which the guardian has a substantial interest, prohibit the payment of any additional compensation in the form of attorney fees to conservators and outlaw the payment of legal fees to law partners or family members of guardian-conservators.

Gunderson was found to have engaged in each of these practices, some of which are prohibited by well-established case law and lawyers’ rules of professional conduct. Violation of the rules subject a lawyer to discipline and possible disbarment but not to any criminal penalties.

Morrow, who noted that the rules of professional conduct in 38 other states specifically prohibit lawyers from preparing wills that make them beneficiaries, said: “California has been left behind; it’s time to catch up.”

Morrow, himself a lawyer, said he believes that lawyers should never benefit from their clients’ estates because they are paid for their services.

“That is why I believe there should be an absolute prohibition without any regard to any dollar amount,” Morrow said. “Lawyers should hold themselves to the highest standards.”

When he announced the legislation last week, Morrow told The Times that probate lawyers would embrace his legislation because “they got a black eye with this Gunderson mess.”

On Thursday, Morrow released a letter that Gunderson had written to him earlier this week. In the letter, Gunderson denied that he had violated any ethical or legal standards and asked Morrow to refrain from “referring to me except in a careful and reasoned manner which will not diminish or harm my reputation.”

Gunderson objected to Morrow’s public comments about what he called the “Gunderson mess” and the “Gunderson episode.”

Morrow also made public a letter that he shot back to Gunderson saying: “Like it or not, you have found yourself in the center of a situation that has caught the public eye.”

Morrow wrote that he was appropriately concerned and taking a position on the matters raised in The Times’ articles because of the possibility that “up to 7,000 of your clients, most of (them) constituents of mine, may one day find themselves in a similar predicament. I find that extremely alarming.”

The lawmakers’ call for a grass-roots campaign brought an immediate response from the American Assn. of Retired Persons, a lobbying group that represents more than 3 million senior citizens in California alone.

Betty London, a member of AARP’s state legislative committee, said the association is pleased that state lawmakers are working to solve the problem.

“We’re behind them 100%,” London said.