Babcock Business Advisor
February 6, 2004 - Vol. 1 No. 007

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Forced Heirship Legislation

The Louisiana Legislature amended the definition of forced heirs. The amended definition of forced heirs includes “descendants who have, at the time of decedent's death, according to medical documentation, an inherited, incurable disease or condition that may render them incapable of caring for their persons or administering their estates in the future."

Courts may interpret this new definition broadly, thereby causing uncertainty for both estate planning and the probate of successions.

For more information on the new forced heirship legislation, please visit this site.

Attorney Client Relationship Changes

Last month, the Louisiana Supreme Court issued an order to repeal and re-enact Article XVI of the Articles of Incorporation of the Louisiana State Bar Association. Article XVI governs the rules on professional conduct for lawyers. Within Article XVI, Rule 1.6 governs confidential information, and Rule 1.13 governs the representation of organizations. New language in Rule 1.6 and 1.13 has increased a lawyer’s ability to disclose confidential information about your company under limited circumstances.

Rule 1.6 (b)(2) now permits a lawyer to reveal confidential information in order “to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services.”

In addition, Rule 1.6 (b)(3) permits a lawyer to reveal confidential information “to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services.”

The changes to Rule 1.6 are significant to the rule on confidentiality. Prior to the aforementioned language in (b)(2) and (b)(3), confidential information could not be revealed to prevent or rectify injury to the financial interests of another.

The revisions to Rule 1.13 call for a lawyer to report to higher authorities if he or she “knows” that a corporate officer or employee is engaged in a violation of law that is likely to result in “substantial injury” to the organization.

If the highest authority within the organization fails to protect the organization from substantial harm, the rule permits a lawyer to report to individuals outside of the organization. However, a lawyer may report outside of the organization “only if and to the extent the lawyer reasonably believes necessary to prevent substantial injury to the organization.”

Want more info about Babcock Law Firm? Visit www.babcockfirm.com

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