Wilson Signs Bill to Protect Estates of the Elderly : Legislation: State measure restricts lawyers from making themselves beneficiaries of clients’ holdings. It was prompted by the actions of an attorney who prepared wills for Leisure World residents.

Hoping to protect the elderly in the drafting of wills, Gov. Pete Wilson has signed into law a measure by an Orange County legislator that restricts lawyers from making themselves beneficiaries of their clients’ estates.

According to the preamble of the bill, which becomes law Jan. 1, the measure was prompted by the activities of an Orange County lawyer who prepared wills and trusts for his elderly Leisure World clients, some of whom bequeathed millions of dollars’ worth of stock, real estate and cash to the attorney.

“It is an outrage that there are attorneys in California who would take advantage of the people whose rights they are supposed to protect,” Wilson said. “This law gives the state sufficient ammunition against these legal vultures who are preying on the vulnerable members of our society.”

Signed by Wilson over the weekend, the new law was authored by Assemblyman Tom Umberg (D-Garden Grove). He was supported by two other Orange County lawmakers--Assemblyman Bill Morrow (R-Oceanside), whose South County district includes Leisure World in Laguna Hills, and state Sen. Marian Bergeson (R-Newport Beach).

The measure invalidates, with some exceptions, bequests to attorneys who prepared or arranged wills or trusts that gave them the gifts.

Umberg and the others introduced and began pushing the legislation after The Times revealed that Laguna Hills lawyer James D. Gunderson, 68, had inherited millions from the estates of his elderly Leisure World clients.

In one case, Gunderson arranged for a bedridden 98-year-old Leisure World man, said to be blind and failing in his mental faculties, to sign a will and a trust that together bequeathed the attorney stock worth $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 inheritances from his clients 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 High Court justices said in their landmark 1962 ruling that a $21,000 inheritance was a “substantial gift” and noted that the attorney in question had to forfeit his claim to the money.

Gunderson, who practices law from an office just outside the gates of Leisure World, has been the subject of investigations by the Orange County Sheriff’s Department, the State Bar of California and the Orange County Bar Assn.

With Wilson’s signing, California joins 38 other states in forbidding lawyers to write wills giving them part of an estate.

“I remain outraged and embarrassed that California has taken so long to do this,” said Umberg, a former assistant U.S. attorney, “but I’m delighted that we’ve finally taken action.”

Harvey Saferstein, outgoing president of the State Bar of California, said he was pleased that the governor had signed the bill and was confident it would mitigate problems brought to light by the well-publicized cases involving Gunderson.

“I think this proves to the public that we’re willing to take a stand and fix problems,” Saferstein said. “This was particularly important because it involved a portion of our population--the elderly--that is both the fastest growing and among the most vulnerable.”

Although the State Bar supported the legislative effort, Saferstein said, “a lot of lawyers felt the bill was unfair, that they were being penalized because of a few bad apples.”

As a practical consideration, the law will prohibit all attorneys from accepting any sort of gift from the estate of a client, even one of long standing who might wish to reward a beloved legal adviser whom they considered a friend, Saferstein said.

“This sweeps out the good and the bad,” he said. “But the better part of valor was to make a tough rule with no exceptions.”

Aside from the measure signed by Wilson, the State Bar has proposed adding to its rules of professional conduct a clause forbidding lawyers to prepare wills or trusts that bequeath them gifts. Saferstein said he expected the rules to be approved soon.

Orange County Superior Court Judge Tully H. Seymour, however, noted that California’s protections were lagging behind the rest of the country. “When it comes right down to it, we were behind almost everyone on this one, so I don’t think we should be congratulating ourselves,” said Seymour, former presiding judge of the county’s probate division.

Seymour also suggested that the new law, while an improvement, won’t guarantee that attorneys can’t take advantage of elderly clients. To escape its provisions, an unscrupulous lawyer would only have to find an outside attorney to write a will giving them large sums, he said.

“I don’t think any law makes people honest, it merely makes it more difficult for them to steal,” Seymour said. “This is like campaign reform. No matter what you do, they’ll always find a way around it.”

After a lengthy investigation, The Times reported last November how Gunderson prepared numerous wills that made him the recipient of millions in cash, stock and real estate from the estates of elderly and sometimes senile Leisure World clients.

In one case, Gunderson persuaded a judge to name him legal guardian of a Canadian woman described as suffering from senile dementia and thus incapable of managing her assets. Once in control of her affairs, Gunderson drafted a new will that gave him the lion’s share of her estate--AT&T; stock worth nearly $250,000 at the time of her death. Another heir reluctantly dropped a challenge to the will when Gunderson offered her $60,000 in exchange for abandoning the court action.