I’m trying to work out whether attorneys are obliged to pursue debts due to the donor.
I can see how they are obliged to deal with debts of the donor (though obviously not with their own assets), since it would be in the donor’s best interest to deal with their debts potentially. But I’m not sure whether that logic extends to pursuing debts, which in the case in question could be particularly awkward.
Have anyone had any experience of this/thoughts?
Andrew Baxter.
Adams and Remers.
An attorney’s duties includes the safeguarding of the donor’s assets. Unless the attorney can demonstrate that the collection of a debt due to the donor is not in the donor’s best interests, I suggest they are obliged to pursue the debt.
If the cost of recovering the debt verses the amount of the debt are such that there will be no, or very little, benefit to the donor in seeking to recover the debt then it may be in the donor’s best interests to take no action.
The nature of the awkwardness referred to in the posting might help inform whether an attempt to recover the debt would be in the donor’s best interests. If it is felt not to be in the donor’s best interests to seek recovery, the attorney should make a detailed note setting out why they have come to that conclusion, mindful that the donor’s personal representatives and/or beneficiaries following their death might challenge the attorney’s decision.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thanks Paul, so the nature of the awkwardness is in this case is that the person from whom the debt would need to be recovered is now deceased. So just trying to gauge the obligations of the attorney in this situation to try to recover any debt.