## Facts

- Saul Schneider retained attorney Victor M. Finmann for legal services from at least April 2000 until Schneider’s death in October 2006.
- In April 2000, Schneider purchased a $1 million life-insurance policy and, over time, transferred ownership among entities he controlled and ultimately back to himself in 2005.
- After Schneider died, the policy proceeds were included in his gross taxable estate.
- The estate alleged Finmann either advised or negligently failed to advise against transferring the policy back to Schneider, increasing the estate’s tax liability and causing purely economic loss to the estate.

## Issues

1. Whether a decedent’s personal representative may maintain a legal malpractice claim against the decedent’s estate-planning attorney for negligent tax planning that increased estate tax liability, despite lack of privity between the attorney and the estate as a separate entity.
2. Whether New York’s strict privity rule for attorney malpractice claims bars such a claim when the alleged injury was realized only after the client’s death.

## Decision

- The New York Court of Appeals reversed the dismissal and reinstated the legal malpractice claim.
- The court held that a personal representative may sue the decedent’s estate-planning attorney for pecuniary losses to the estate caused by malpractice.
- The court limited its holding, maintaining strict privity as a bar to suits by beneficiaries and other nonclient third parties absent recognized exceptions (e.g., fraud or collusion).

## Legal Principles

- New York generally requires strict privity for attorney-malpractice liability to nonclients, absent fraud, collusion, malicious acts, or other special circumstances.
- In estate-planning malpractice, the personal representative may assert the decedent-client’s claim on behalf of the estate when the alleged negligence caused economic injury to the estate that commonly materializes only at death.
- The personal representative is treated as standing in the shoes of the decedent for this purpose, avoiding a remedial gap where negligent estate planning would otherwise be effectively immune from suit.
- The relaxation of privity is confined to claims by the personal representative for injury to the estate; it does not extend to individual beneficiaries’ malpractice claims absent traditional privity exceptions.

## Conclusion

The court permitted an estate, through its personal representative, to pursue malpractice claims against the decedent’s estate-planning attorney for post-death pecuniary harm to the estate, while preserving strict privity limits against suits by beneficiaries and other third parties.


Estate of Schneider v. Finmann, 933 N.E.2d 718 (N.Y. 2010)