Assembly OKs Restrictions on Lawyer Gifts

State lawmakers approved legislation Friday that would restrict lawyers from making themselves beneficiaries of their clients’ estates, a practice that netted an Orange County lawyer millions of dollars from Leisure World retirees.

The Assembly voted 68 to 0 to give final approval to the bill, which now goes to Gov. Pete Wilson, who is expected to sign it.

Sponsored by Assemblymen Tom Umberg (D-Garden Grove) and Bill Morrow (R-Oceanside), the measure would invalidate, with some exceptions, bequests to attorneys who prepared or arranged for wills or trusts that gave them gifts.

The two lawmakers pushed for the legislation after articles in The Times revealed that Laguna Hills lawyer James D. Gunderson, 68, made himself a major beneficiary of many of his clients’ estates.

In one case, Gunderson arranged for a blind and bedridden 98-year-old Leisure World man to sign a will and a trust that together bequeathed the attorney $3.5 million and made the other beneficiaries liable for an estimated $2 million in inheritance taxes he normally would have incurred.

Gunderson, who has repeatedly denied any wrongdoing, received the inheritances despite a longstanding California Supreme Court ruling that anything more than a “modest” gift to an attorney from a client’s estate raises questions of impropriety.

The attorney’s law practice, which is just outside the gates of Leisure World in Laguna Hills, has been the subject of investigations by the Orange County Sheriff’s Department, the State Bar of California and the Orange County Bar Assn.

Umberg said he expected Wilson to sign the bill in the next two weeks. California would then join more than 30 states that prohibit lawyers from writing wills that give them part of an estate.

“This is a good step toward preventing some of the outrageous conduct over the last few years involving attorneys cheating their clients by writing wills to benefit themselves,” said Umberg, a former assistant U.S. attorney.