CALDERWOOD & HARKNESS LLP 375 Park Avenue, 42nd Floor New York, New York 10152
INTERNAL MEMORANDUM PRIVILEGED AND CONFIDENTIAL / ATTORNEY WORK PRODUCT
This memorandum is a privileged and confidential internal communication of Calderwood & Harkness LLP prepared in connection with the firm's conflict of interest clearance procedures. It is not intended for distribution outside the firm.
DATE: February 10, 2023
TO: Victoria Chambers, Responsible Partner
FROM: Monica Reyes, Lead Associate
RE: Conflict of Interest Check — Generational Estate Plan for Jonathan R. Caldwell
MATTER NO.: 1034-00004
BILLING CODE: 78412-JRC
APPROVED BY:
Victoria Chambers: ______ Date: ____
DISTRIBUTION: Victoria Chambers (Responsible Partner); Howard Quinn (Billing Partner); file copy
I. PURPOSE AND SCOPE OF MEMORANDUM
The purpose of this memorandum is to document the results of the conflict of interest check conducted in connection with the proposed engagement of Jonathan R. Caldwell for comprehensive generational estate planning services. This memorandum sets forth the parties searched, the methodology employed, the results of the conflict search, and the conclusions and recommendations of the undersigned regarding the firm's ability to proceed with the proposed representation.
This matter was opened on February 6, 2023, following an initial client meeting between Mr. Caldwell and Victoria Chambers at the firm's offices. This memorandum has been prepared in advance of the execution of the formal engagement letter, which is currently scheduled for February 15, 2023. No substantive legal work has been performed on the matter beyond the initial client meeting and this conflicts clearance process.
The conflict check was performed in accordance with Calderwood & Harkness LLP's internal conflicts clearance procedures, as set forth in the firm's Conflicts of Interest Policy Manual (revised January 2022), and in compliance with the applicable provisions of the New York Rules of Professional Conduct, including Rule 1.7 (Conflict of Interest: Current Clients), Rule 1.8 (Current Clients: Specific Conflict of Interest Rules), Rule 1.9 (Duties to Former Clients), Rule 1.10 (Imputation of Conflicts of Interest), and Rule 1.18 (Duties to Prospective Clients).
All relevant parties — including the client, the client's immediate and extended family members, client-affiliated entities, proposed trusts and foundation entities, proposed co-counsel, independent counsel to the client's spouse, Delaware counsel to the institutional trustee, the proposed institutional trustee, accountants, financial advisors, independent appraisers, insurance brokers, insurance carriers, and other interested persons — were identified and run through the firm's central conflicts database. The results are reported in full below.
II. MATTER DESCRIPTION
Calderwood & Harkness LLP has been asked to design and implement a comprehensive generational estate plan for Jonathan R. Caldwell, a sixty-seven-year-old resident of New York, New York, with an estimated gross estate of approximately three hundred million dollars ($300,000,000). Mr. Caldwell's estate is principally comprised of liquid investment securities, limited partnership interests and carried-interest positions in private investment funds managed by his former firm (Caldwell Ridgeline Capital LLC), a diversified real estate portfolio held through a holding company (Stonecrest Realty Holdings LLC), personal residences, art and collectibles, and life insurance proceeds.
The proposed engagement will encompass the design, drafting, and implementation of the following structures and instruments:
1. Three Grantor Retained Annuity Trusts (GRATs):
(a) Caldwell 2023 Securities GRAT ("GRAT A") — to be funded with publicly traded securities and other liquid investment assets;
(b) Caldwell 2023 Realty GRAT ("GRAT B") — to be funded with membership interests in Stonecrest Realty Holdings LLC;
(c) Caldwell 2023 Carried Interest GRAT ("GRAT C") — to be funded with carried-interest positions in Caldwell Ridgeline Fund VI LP.
2. Caldwell Family Dynasty Trust — an irrevocable, multi-generational trust with Delaware situs, designed to hold remainder assets passing from the GRATs and additional transferred assets for the benefit of Mr. Caldwell's descendants in perpetuity under Delaware's rule against perpetuities.
3. The Caldwell Family Foundation — a private foundation to be organized as a New York not-for-profit corporation and to apply for tax-exempt status under Internal Revenue Code § 501(c)(3). Eleanor V. Caldwell will serve as co-founder, and the foundation's initial board of directors will include family members and an independent director.
4. Caldwell Family Insurance Trust (ILIT) — an irrevocable life insurance trust with Delaware situs, to be the owner and beneficiary of a $15,000,000 second-to-die universal life insurance policy issued by Beacon Life Assurance Company on the joint lives of Jonathan and Eleanor Caldwell.
5. Amendment and Restatement of the Caldwell Revocable Trust — originally established on October 3, 2010. The existing trust instrument will be amended and restated in its entirety to reflect updated dispositive provisions, updated fiduciary appointments, and coordination with the new estate planning structures.
6. New Pour-Over Will — a new last will and testament for Jonathan R. Caldwell, providing for the disposition of probate assets to the Caldwell Revocable Trust (as amended and restated).
7. Powers of Attorney — new durable general power of attorney and statutory gifts rider under New York General Obligations Law.
8. Health Care Directives — new health care proxy and living will under New York Public Health Law.
The engagement team assigned to this matter is as follows:
III. PARTIES SEARCHED
The following parties were identified as relevant to the proposed engagement and were searched through the firm's central conflicts database. Each party is listed with all identifying information available as of the date of this memorandum.
A. Client and Immediate Family
1. Jonathan R. Caldwell — Client / Grantor
Date of Birth: March 14, 1956 Residence: 418 East 72nd Street, Apt. 14A, New York, NY 10021 SSN (last four digits): 4781 Occupation: Founder and former Managing Partner, Caldwell Ridgeline Capital LLC Role in Matter: Client; grantor of all proposed trust structures; co-founder of proposed private foundation; testator of proposed pour-over will; principal of proposed powers of attorney and health care directives.
2. Eleanor V. Caldwell (née Whitmore) — Spouse
Date of Birth: September 22, 1958 Residence: 418 East 72nd Street, Apt. 14A, New York, NY 10021 SSN (last four digits): 6203 Occupation: Former partner, Whitmore-Langdon Gallery (retired) Role in Matter: Co-grantor of the proposed private foundation; named beneficiary of certain trust structures; co-insured under the proposed second-to-die life insurance policy. Eleanor V. Caldwell is not a client of Calderwood & Harkness LLP in this engagement; she has been advised to retain independent counsel and has engaged Pemberton, Locke & Strauss LLP for that purpose. Maiden Name Searched: Whitmore
3. Thomas R. Caldwell — Son
Date of Birth: June 7, 1985 (Age 38) Residence: 55 Perry Street, Unit 3, New York, NY 10014 Occupation: Vice President of Acquisitions, Meridian Crest Partners LLC Role in Matter: Named beneficiary of various trust structures; designated successor trustee of certain trusts; designated director of the proposed Caldwell Family Foundation.
4. Katherine C. Hartfield (née Caldwell) — Daughter
Date of Birth: November 19, 1987 (Age 35) Residence: 210 Briarcliff Lane, Greenwich, CT 06830 Occupation: Freelance interior designer Role in Matter: Named beneficiary of various trust structures; designated director of the proposed Caldwell Family Foundation. Maiden Name Searched: Caldwell
5. Olivia G. Caldwell — Daughter
Date of Birth: April 2, 1993 (Age 30) Residence: 1240 North Dearborn Street, Apt. 807, Chicago, IL 60610 Occupation: Associate, Linden & Fairchild LLP (Chicago, Illinois); practicing environmental law Role in Matter: Named beneficiary of various trust structures; designated director of the proposed Caldwell Family Foundation.
6. Dr. Sarah P. Caldwell (née Brennan) — Daughter-in-law (spouse of Thomas R. Caldwell)
Occupation: Physician Role in Matter: Spouse of beneficiary; potential contingent beneficiary. Searched as related party. Maiden Name Searched: Brennan
7. Dr. Andrew W. Hartfield — Son-in-law (spouse of Katherine C. Hartfield)
Occupation: Orthopedic surgeon, Preswick Medical Center Role in Matter: Spouse of beneficiary; potential contingent beneficiary. Searched as related party.
8. Minor Grandchildren (searched by family name)
(a) James W. Hartfield — Age 8 (child of Katherine and Andrew Hartfield)
(b) Charlotte M. Hartfield — Age 5 (child of Katherine and Andrew Hartfield)
(c) Lucas T. Caldwell — Age 3 (child of Thomas and Sarah Caldwell)
(d) Nora E. Caldwell — Age 1 (child of Thomas and Sarah Caldwell)
Role in Matter: Named beneficiaries of dynasty trust and other trust structures; contingent beneficiaries of various instruments.
B. Client-Affiliated Entities
9. Caldwell Ridgeline Capital LLC
Entity Type: Delaware limited liability company
Address: 280 Park Avenue, 35th Floor, New York, NY 10017
Description: Mr. Caldwell's former asset management firm, managing approximately $2.1 billion in assets under management. Mr. Caldwell retired from active management but retains economic interests in the firm's legacy funds. Key Contact: Gregory S. Fenton, Chief Financial Officer Role in Matter: Mr. Caldwell holds limited partner interests and carried-interest positions in Funds IV, V, and VI; transfer and valuation of such interests are central to the estate plan.
10. Caldwell Ridgeline Fund IV LP
Entity Type: Delaware limited partnership Vintage: 2015 Description: Mr. Caldwell holds a limited partner interest valued at approximately $12,000,000. Role in Matter: LP interest is an estate asset to be addressed in the plan.
11. Caldwell Ridgeline Fund V LP
Entity Type: Delaware limited partnership Vintage: 2018 Description: Mr. Caldwell holds a limited partner interest valued at approximately $14,000,000. Role in Matter: LP interest is an estate asset to be addressed in the plan.
12. Caldwell Ridgeline Fund VI LP
Entity Type: Delaware limited partnership Vintage: 2021 Description: Mr. Caldwell holds a carried-interest position valued at approximately $12,000,000. Role in Matter: Carried-interest position is proposed to be transferred to GRAT C.
13. Stonecrest Realty Holdings LLC
Entity Type: New York limited liability company
Address: 330 Madison Avenue, Suite 2401, New York, NY 10017
Description: Mr. Caldwell's real estate holding company, which owns eleven commercial and residential properties located in New York, New Jersey, and Connecticut, with a total estimated fair market value of approximately $134,000,000. Key Contact: Robert M. Sinclair, Chief Operating Officer Role in Matter: Membership interests in Stonecrest are proposed to be transferred to GRAT B; independent appraisal of such interests will be required.
14. Meridian Crest Partners LLC
Entity Type: Delaware limited liability company (New York-based) Description: Mid-market real estate private equity firm. Employer of Thomas R. Caldwell. Role in Matter: Searched as a related entity due to the employment relationship of Thomas R. Caldwell. Calderwood & Harkness does not represent Meridian Crest Partners LLC in any capacity.
C. Proposed Trusts and Foundation (New Entities to be Created)
15. Caldwell 2023 Securities GRAT (GRAT A) — Proposed irrevocable trust to be governed by New York law.
16. Caldwell 2023 Realty GRAT (GRAT B) — Proposed irrevocable trust to be governed by New York law.
17. Caldwell 2023 Carried Interest GRAT (GRAT C) — Proposed irrevocable trust to be governed by New York law.
18. Caldwell Family Dynasty Trust — Proposed irrevocable trust with Delaware situs, to be governed by Delaware law.
19. Caldwell Family Insurance Trust (ILIT) — Proposed irrevocable trust with Delaware situs, to be governed by Delaware law.
20. The Caldwell Family Foundation — Proposed New York not-for-profit corporation; to apply for recognition of tax-exempt status under Internal Revenue Code § 501(c)(3).
21. Caldwell Revocable Trust — Existing revocable trust originally established on October 3, 2010, by Jonathan R. Caldwell as grantor. The trust instrument is to be amended and restated in its entirety as part of this engagement.
D. Institutional Trustee
22. Northgate Trust Company of Delaware
Entity Type: Delaware trust company
Address: 1201 North Market Street, Suite 1600, Wilmington, DE 19801
Description: Proposed institutional co-trustee of the Caldwell Family Dynasty Trust and proposed administrative trustee of the Caldwell Family Insurance Trust (ILIT). Key Contact: Philip A. Rossiter, Senior Vice President, Trust Administration Role in Matter: Institutional fiduciary; aligned party.
E. Independent / Co-Counsel and Advisors
23. Pemberton, Locke & Strauss LLP
Entity Type: New York limited liability partnership (law firm)
Address: 405 Lexington Avenue, 26th Floor, New York, NY 10174
Description: Retained as independent counsel to Eleanor V. Caldwell in connection with the estate plan. Key Contact: Rachel F. Dunlap, Esq., Partner, Private Client Role in Matter: Independent counsel to the client's spouse; engaged at Calderwood & Harkness's recommendation to ensure that Eleanor V. Caldwell has the benefit of separate and independent legal advice regarding the estate planning structures in which she has an interest.
24. Ridgewell & Thorn LLP
Entity Type: Delaware limited liability partnership (law firm)
Address: 1000 North King Street, Suite 300, Wilmington, DE 19801
Description: Delaware counsel to Northgate Trust Company of Delaware. Key Contact: Margaret A. Colvin, Esq., Partner, Fiduciary Practice Role in Matter: Local Delaware counsel to the institutional trustee; aligned party.
25. Linden & Fairchild LLP
Entity Type: Illinois limited liability partnership (law firm)
Address: Chicago, Illinois
Description: National law firm with offices in Chicago and elsewhere. Employer of Olivia G. Caldwell, who practices in the firm's environmental law department. Role in Matter: Not engaged in this matter in any capacity. Searched as a related entity solely due to the employment relationship of Olivia G. Caldwell.
F. Accountants and Financial Advisors
26. Strathmore Corporation & Greaves LLP
Entity Type: New York limited liability partnership (accounting and tax advisory firm)
Address: 600 Third Avenue, 28th Floor, New York, NY 10016
Description: Mr. Caldwell's personal accountants and tax advisors, responsible for the preparation of his individual and entity-level tax returns and providing ongoing tax planning advice. Key Contact: Martin J. Prescott, CPA, Senior Partner, Private Client Group Role in Matter: Tax advisor; aligned party. Strathmore Corporation & Greaves will coordinate with Calderwood & Harkness on tax aspects of the estate plan, including gift tax return preparation and valuation reporting.
27. Havensbrook Wealth Advisors LLC
Entity Type: Delaware limited liability company (New York-based)
Address: 900 Third Avenue, 18th Floor, New York, NY 10022
Description: Mr. Caldwell's financial advisor and investment manager, providing investment management, financial planning, and family office services. Key Contact: Diana R. Linden, CFP®, Managing Director, Family Office Services Role in Matter: Financial advisor; aligned party. Havensbrook will assist in the identification and valuation of assets to be transferred to trust structures and will serve as investment advisor to certain trusts following establishment.
G. Independent Appraiser
28. Ashford Valuation Group LLC
Entity Type: New York limited liability company
Address: 1120 Avenue of the Americas, Suite 3500, New York, NY 10036
Description: Independent qualified appraisal firm retained to provide fair market value appraisals of illiquid and hard-to-value assets, including Caldwell Ridgeline LP and carried-interest positions, Stonecrest Realty Holdings LLC membership interests, and art and collectibles. Key Contact: Dr. Leonard K. Whitfield, ASA, Managing Partner Role in Matter: Independent appraiser; necessary for compliance with IRC § 2512 and Treasury Regulations § 25.2512-1 and for adequate disclosure on gift tax returns.
H. Insurance Broker and Carrier
29. Glenmore Insurance Brokerage LLC
Entity Type: New York limited liability company
Address: 44 Wall Street, Suite 1200, New York, NY 10005
Description: Insurance brokerage firm engaged to procure the life insurance policy to be held by the ILIT. Key Contact: Nathan C. Freed, Senior Vice President, Private Client Division Role in Matter: Insurance broker; procuring the $15,000,000 second-to-die universal life insurance policy on the joint lives of Jonathan and Eleanor Caldwell.
30. Beacon Life Assurance Company
Entity Type: Connecticut domiciled life insurance company
Address: 100 Constitution Plaza, Hartford, CT 06103
Description: Proposed issuer of the $15,000,000 second-to-die universal life insurance policy. Role in Matter: Insurance carrier; product provider.
I. Foundation Independent Director
31. Dr. Margaret P. Elsworth
Title: Professor Emerita, Columbia University; philanthropic advisor
Role in Matter: Proposed independent director of The Caldwell Family Foundation. Dr. Elsworth is a personal acquaintance of the Caldwell family who has served in advisory capacities to several private foundations in the New York philanthropic community.
IV. CONFLICT SEARCH METHODOLOGY
The conflict of interest search was conducted using Calderwood & Harkness LLP's central conflicts database (the "Conflicts System"), which is maintained by the firm's Conflicts Department and serves as the firm's comprehensive repository of all current and former client information, adverse party information, related party information, and engagement data across all practice groups and offices.
The following search protocols were employed:
Database Searches. Each of the thirty-one parties identified in Section III above was entered into the Conflicts System using all available identifying information. Searches were conducted on the following data fields:
(a) Full legal names of all individuals, including first name, middle initial or middle name, and last name;
(b) Maiden names, where applicable, including Eleanor V. Caldwell (née Whitmore), Katherine C. Hartfield (née Caldwell), Dr. Sarah P. Caldwell (née Brennan);
(c) Full legal names of all entities, including abbreviations, trade names, d/b/a designations, and alternate name formulations (e.g., "Caldwell Ridgeline," "CRC," "Stonecrest Realty," "Northgate Trust," "Havensbrook," etc.);
(d) Addresses associated with each party;
(e) Known affiliates, subsidiaries, parent entities, and related persons; and
(f) Social Security Numbers (last four digits), where available, for individual parties.
Scope of Search. The searches covered all active and closed matters across all Calderwood & Harkness LLP practice groups and all firm offices, including matters that have been closed or archived within the firm's records retention period. The Conflicts System contains records of all engagements undertaken by the firm since the implementation of its electronic conflicts database in 2003, as well as historical records for selected engagements predating that implementation.
Cross-Referencing. In addition to direct name searches, the Conflicts Department performed cross-referencing of all identified parties against one another, including searches for any matter in which two or more of the searched parties appeared in adverse or potentially adverse positions.
Date of Search. The conflict search was conducted over the period of February 9 through February 10, 2023.
Persons Conducting the Search. The search was conducted by the undersigned, Monica Reyes, Lead Associate, with the assistance of the Calderwood & Harkness LLP Conflicts Department. The results were reviewed by the undersigned on February 10, 2023, and are reported in Section V below.
V. RESULTS OF CONFLICT SEARCH
A. No Direct Conflicts Identified
Based on the searches described in Section IV above, no current or former client representations were identified that would create a direct conflict of interest under New York Rules of Professional Conduct Rule 1.7 (Conflict of Interest: Current Clients) or Rule 1.9 (Duties to Former Clients) with respect to any of the parties listed in Section III of this memorandum.
Specifically:
(a) No current or prior adversarial representation was identified in which Calderwood & Harkness LLP represented or is representing any party in a matter adverse to Jonathan R. Caldwell, Eleanor V. Caldwell, any member of the Caldwell family, or any Caldwell-affiliated entity.
(b) No current or prior representation was identified in which Calderwood & Harkness LLP represented or is representing any party whose interests are materially adverse to the interests of any party listed in Section III in connection with the proposed engagement.
(c) No current representation was identified that would give rise to a significant risk that the representation of Mr. Caldwell would be materially limited by the firm's responsibilities to another client, a former client, or a third person, or by a personal interest of a lawyer in the firm, within the meaning of Rule 1.7(a)(2).
B. Related Matter Searches — Prior Engagements Involving Searched Parties
The following is a summary of the search results for each party or category of parties, including identification of any prior engagements of the firm that involved any searched party, whether or not such prior engagement gives rise to a conflict of interest.
Jonathan R. Caldwell. No prior engagements were identified. Mr. Caldwell is a new client of the firm. The initial client meeting was held on February 6, 2023, and this is the firm's first engagement for Mr. Caldwell in any capacity.
Eleanor V. Caldwell (née Whitmore). No prior engagements were identified, either under her married name or her maiden name.
Thomas R. Caldwell, Katherine C. Hartfield (née Caldwell), Olivia G. Caldwell. No prior engagements were identified for any of the Caldwell children.
Dr. Sarah P. Caldwell (née Brennan), Dr. Andrew W. Hartfield. No prior engagements were identified for either of the client's children-in-law.
Minor Grandchildren (James W. Hartfield, Charlotte M. Hartfield, Lucas T. Caldwell, Nora E. Caldwell). No prior engagements were identified.
Caldwell Ridgeline Capital LLC and Affiliated Funds (Funds IV, V, and VI). No prior representation of, or representation adverse to, Caldwell Ridgeline Capital LLC or any of its affiliated fund vehicles was identified. The firm has not previously served as counsel to any Caldwell Ridgeline entity, nor has the firm represented any party in a matter adverse to any Caldwell Ridgeline entity.
Stonecrest Realty Holdings LLC. No prior representation of, or representation adverse to, Stonecrest Realty Holdings LLC was identified.
Northgate Trust Company of Delaware. The search identified two prior engagements in which Northgate Trust Company of Delaware appeared in the firm's records:
(a) Matter No. 1034-00004 (Closed): Calderwood & Harkness LLP represented an individual client (unrelated to the Caldwell family) in connection with the establishment of a Delaware dynasty trust in which Northgate served as institutional trustee. The engagement was completed and the matter was closed in April 2020. Northgate was not an adverse party; it served as the institutional trustee of the trust established for the firm's client.
(b) Matter No. 1034-00004 (Closed): Calderwood & Harkness LLP represented a different individual client (also unrelated to the Caldwell family) in connection with a trust modification proceeding in which Northgate served as the incumbent institutional trustee. Northgate was not an adverse party in that proceeding; the modification was consensual and Northgate consented to the proposed changes. The matter was closed in September 2021.
Conclusion re: Northgate. Neither of the identified prior engagements gives rise to a conflict of interest in connection with the proposed Caldwell engagement. In both instances, Northgate served as an institutional trustee — an aligned, non-adverse party — in matters wholly unrelated to the Caldwell family or any Caldwell-affiliated entity. No confidential information obtained in either prior engagement is relevant to the present matter. No conflict exists under Rule 1.7 or Rule 1.9.
Pemberton, Locke & Strauss LLP. No current or prior adverse representation was identified. The firm has not represented any party in any matter adverse to Pemberton, Locke & Strauss LLP, nor has Pemberton, Locke & Strauss LLP appeared as opposing counsel in any matter handled by Calderwood & Harkness LLP. Pemberton, Locke & Strauss LLP is serving as independent counsel to Eleanor V. Caldwell at Calderwood & Harkness's recommendation, and this arrangement does not present a conflict.
Ridgewell & Thorn LLP. No conflicts were identified. Ridgewell & Thorn LLP serves as Delaware counsel to Northgate Trust Company of Delaware, an aligned party. The firm has had no prior adversarial dealings with Ridgewell & Thorn LLP.
Strathmore Corporation & Greaves LLP. No conflicts were identified. Strathmore Corporation & Greaves LLP serves as Mr. Caldwell's personal accountants and tax advisors. They are an aligned party in the context of this engagement. The firm has not represented any party in any matter adverse to Strathmore Corporation & Greaves LLP.
Havensbrook Wealth Advisors LLC. No conflicts were identified. Havensbrook Wealth Advisors LLC serves as Mr. Caldwell's financial advisor and investment manager. They are an aligned party in the context of this engagement. The firm has not represented any party in any matter adverse to Havensbrook.
Ashford Valuation Group LLC. No conflicts were identified. Ashford Valuation Group LLC is retained as an independent qualified appraiser for this engagement. The firm has no current or prior relationship with Ashford that would give rise to a conflict.
Glenmore Insurance Brokerage LLC. No conflicts were identified. Glenmore Insurance Brokerage LLC serves as the insurance broker procuring the ILIT policy. The firm has no current or prior relationship with Glenmore that would give rise to a conflict.
Beacon Life Assurance Company. No conflicts were identified. Beacon Life Assurance Company is the proposed issuer of the life insurance policy to be held by the ILIT. The firm has not represented any party in any matter adverse to Beacon Life, nor has the firm represented Beacon Life in any capacity.
Meridian Crest Partners LLC. No conflicts were identified. Meridian Crest Partners LLC is the employer of Thomas R. Caldwell. The firm has no current or prior engagement involving Meridian Crest in any capacity.
Linden & Fairchild LLP. No conflicts were identified. Linden & Fairchild LLP is the employer of Olivia G. Caldwell. The firm has no current or prior adverse relationship with Linden & Fairchild. Linden & Fairchild is not engaged in any capacity in connection with this matter.
Dr. Margaret P. Elsworth. No conflicts were identified. Dr. Elsworth is a proposed independent director of The Caldwell Family Foundation. The firm has no current or prior relationship with Dr. Elsworth that would give rise to a conflict.
C. Potential Issue: Multiple Representation Within Family
Although no direct conflict of interest has been identified, the nature of comprehensive generational estate planning requires careful attention to the scope of the attorney-client relationship, particularly where multiple family members have interests in the structures being created. The following analysis addresses this issue.
Identification of the Client. Calderwood & Harkness LLP has been engaged to represent Jonathan R. Caldwell as the primary and sole client in this matter. The firm's obligations of loyalty, confidentiality, and zealous advocacy run to Mr. Caldwell alone. While the estate plan is designed to benefit Mr. Caldwell's spouse, children, and grandchildren, those individuals are beneficiaries of the plan — not clients of the firm.
Independent Counsel for Eleanor V. Caldwell. Eleanor V. Caldwell occupies a unique position in the estate plan. She is Mr. Caldwell's spouse, a co-grantor of the proposed private foundation, a named beneficiary of certain trust structures, and a co-insured under the proposed second-to-die life insurance policy. In certain respects, her interests in the design and implementation of the estate plan may diverge from those of Mr. Caldwell — for example, with respect to the level of spousal access to trust assets, the exercise of spousal rights of election under New York Estates, Powers and Trusts Law § 5-1.1-A, and the allocation of foundation governance powers. To avoid any actual or potential conflict arising from the simultaneous representation of both spouses, Calderwood & Harkness LLP recommended that Mrs. Caldwell retain separate and independent legal counsel. Mrs. Caldwell has engaged Pemberton, Locke & Strauss LLP (Rachel F. Dunlap, Partner) for that purpose. This arrangement ensures that Mrs. Caldwell has access to independent legal advice regarding her rights and interests under the proposed estate planning structures without creating a multiple-representation conflict for Calderwood & Harkness LLP.
Beneficiary Family Members. Calderwood & Harkness LLP does not represent Thomas R. Caldwell, Katherine C. Hartfield, or Olivia G. Caldwell individually. These individuals are adult beneficiaries of the proposed estate plan, and their interests are derivative of and subordinate to the estate planning objectives of the client. They will be informed, in writing, that Calderwood & Harkness LLP represents their father and does not represent them individually, and that they are free to consult their own counsel regarding any aspect of the plan that affects their interests.
Engagement Letter Provisions. The engagement letter to be executed on February 15, 2023, will specifically identify Jonathan R. Caldwell as the sole client of Calderwood & Harkness LLP in this matter and will include an express disclaimer of any attorney-client relationship between the firm and any other member of the Caldwell family, including Eleanor V. Caldwell, Thomas R. Caldwell, Katherine C. Hartfield, and Olivia G. Caldwell.
D. Potential Issue: Victoria Chambers as Trust Protector
A second issue warranting analysis is the proposed designation of Victoria Chambers, the Responsible Partner on this engagement, as trust protector of the Caldwell Family Dynasty Trust.
Description of the Role. Under the terms of the proposed trust instrument, the trust protector is designated in a non-fiduciary capacity and is vested with limited administrative powers, including the power to:
(a) modify administrative provisions of the trust instrument to adapt to changes in law or changed circumstances;
(b) change the situs of the trust from one jurisdiction to another;
(c) remove and appoint successor institutional trustees and co-trustees; and
(d) approve amendments to the trust's investment policy statement.
The trust protector does not hold any distributive powers, does not have the authority to add or remove beneficiaries, and does not exercise any discretion over the timing, amount, or manner of distributions. The role is expressly designated as non-fiduciary under the terms of the trust instrument and under Delaware law, which permits the creation of non-fiduciary trust protector positions. See 12 Del. C. § 3313(b).
Conflict Analysis. The dual role of Victoria Chambers as engagement counsel and trust protector raises a question under Rule 1.7(a)(2), which prohibits a representation where there is a significant risk that the lawyer's professional judgment on behalf of the client will be materially limited by the lawyer's own interests or responsibilities to a third party. After careful analysis, the undersigned concludes that the trust protector designation does not create a conflict of interest for the following reasons:
(a) The trust protector role is non-fiduciary and limited to administrative functions. Ms. Chambers will not owe fiduciary duties to the trust beneficiaries in her capacity as trust protector, and the exercise of trust protector powers does not require her to act as an advocate for or against any party.
(b) The trust protector powers do not involve any distributive discretion or any authority that could place Ms. Chambers's interests or obligations in conflict with those of the client.
(c) The designation of the Responsible Partner as trust protector is a common and widely accepted practice in the estate planning field, designed to ensure continuity of knowledgeable oversight over the trust's administrative provisions.
(d) The trust protector role will not commence until the dynasty trust is irrevocable and the estate planning engagement has been completed to the extent that ongoing counsel and trust protector functions can be clearly distinguished.
Disclosure and Informed Consent. Notwithstanding the foregoing conclusion that no conflict exists, the proposed arrangement will be fully disclosed to Jonathan R. Caldwell in the engagement letter. Mr. Caldwell's informed consent to the dual role will be obtained in writing, consistent with the disclosure requirements of Rule 1.7(b). The engagement letter will describe the nature of the trust protector role, the scope of the powers to be conferred, the non-fiduciary character of the position, and the basis for the firm's conclusion that the dual role does not present a conflict. Mr. Caldwell will be advised that he is free to designate an alternative trust protector if he prefers.
VI. ENGAGEMENT TEAM CONFLICT REVIEW
In addition to the party-level conflict search described in Sections IV and V above, each member of the Calderwood & Harkness LLP engagement team was individually reviewed for potential conflicts of interest, including personal or financial interests in any party or entity listed in Section III, familial relationships with any searched party, and any other circumstance that could give rise to a conflict or the appearance of a conflict.
The results of the engagement team conflict review are as follows:
Victoria Chambers — Responsible Partner. No personal or financial interest in any party or entity listed in Section III was identified. Ms. Chambers has no familial, business, or social relationship with any searched party, other than the professional relationship with Mr. Caldwell arising from this engagement. The proposed trust protector designation is addressed in Section V.D above.
Howard Quinn — Billing Partner. No conflicts identified. Mr. Quinn has no personal or financial interest in any party or entity listed in Section III, and no familial, business, or social relationship with any searched party.
Monica Reyes — Lead Associate. No conflicts identified. The undersigned has no personal or financial interest in any party or entity listed in Section III, and no familial, business, or social relationship with any searched party.
Elliot Nguyen — Working Associate. No conflicts identified. Mr. Nguyen has no personal or financial interest in any party or entity listed in Section III, and no familial, business, or social relationship with any searched party.
Sylvia Hartwell — Specialist Partner, Tax. No conflicts identified. Ms. Hartwell has no personal or financial interest in any party or entity listed in Section III, and no familial, business, or social relationship with any searched party. It is noted that Ms. Hartwell's surname ("Hartwell") bears a phonetic similarity to the married name of the client's daughter, Katherine C. Hartfield ("Hartfield"). The undersigned confirmed with Ms. Hartwell that no familial relationship exists between Sylvia Hartwell and Katherine C. Hartfield, Dr. Andrew W. Hartfield, or any member of the Hartfield family. The surnames are distinct ("Hartwell" versus "Hartfield"), and the similarity is coincidental.
VII. CONCLUSION AND CLEARANCE
Based on the comprehensive conflict of interest check described in this memorandum, including the search of the firm's central conflicts database, the review of prior engagements involving searched parties, the analysis of potential multiple-representation issues, the analysis of the proposed trust protector designation, and the individual conflict review of each engagement team member, the undersigned concludes as follows:
No conflicts of interest have been identified that would preclude Calderwood & Harkness LLP from undertaking the proposed engagement for Jonathan R. Caldwell in connection with the design and implementation of a comprehensive generational estate plan (Matter No. 1034-00004).