My advisor helped me leave my estate to my cat.

This is a true story, from a lady who was in my office witnessing a client signing her Will.

 

It is also an example of the unlicensed practice of law.

 

I am both an attorney and an insurance agent. I have two (2) licenses. One (1) was hard to get. One (1) wasn’t. Guess which one (1) fits each category.

 

There is a lot of argument in the insurance and financial world about helping clients draft their Wills, Trusts and Powers of Attorney while getting paid to do so. Why? Money.

 

Tennessee defines the practice of law as:

As used in this chapter, unless the context otherwise requires:

(1) “Law business” means the advising or counseling for valuable consideration of any person as to any secular law, the drawing or the procuring of or assisting in the drawing for valuable consideration of any paper, document or instrument affecting or relating to secular rights, the doing of any act for valuable consideration in a representative capacity, obtaining or tending to secure for any person any property or property rights whatsoever, or the soliciting of clients directly or indirectly to provide such services;

(2) “Person” means a natural person, individual, governmental agency, partnership, corporation, trust, estate, incorporated or unincorporated association, and any other legal or commercial entity however organized; and

(3) “Practice of law” means the appearance as an advocate in a representative capacity or the drawing of papers, pleadings or documents or the performance of any act in such capacity in connection with proceedings pending or prospective before any court, commissioner, referee or any body, board, committee or commission constituted by law or having authority to settle controversies, or the soliciting of clients directly or indirectly to provide such services.

            Tennessee Code Annotated §§ 23-3-101, my emphasis added.

 

What does the above mean?  If you are a financial professional who is getting paid to advise or draft a client's legal document(s), in Tennessee, that’s the unlicensed practice of law.

 

When the lady in the above story was in my office telling me how her advisor helped her draft her Will, leaving her entire estate to her pet cat, she described a prime example of a financial professional practicing law without a license.  

 

The area of Trust and Estates is growing more and more litigious. The financial professional’s actions were criminal as defined in Tennessee Code Annotated §§ 23-3-103. If sued, it is unlikely that the financial professional’s Errors and Omissions coverage would pay anything for the litigation, including a defense.

 

The impact on a financial professional’s career from the unlicensed practice of law would be devastating. Whether it resulted in a criminal conviction or a civil judgment, it would certainly impact the advisor’s licenses and contracts with insurance and investment companies.

 

The point of this story is that licenses matter. States require them for a reason. If you are a consumer, make sure your professional is licensed for the services they are providing you. If you are a professional, understand the risks and the consequences of operating outside of your license.