The Fiduciary Exception to the Attorney-Client Privilege in Delaware and Beyond
A trust’s fiduciaries ordinarily have a duty to provide trust-related information to a beneficiary upon reasonable request. Sometimes, however, a beneficiary will request information that the fiduciary desires to shield because the information relates to communication between the fiduciary and an attorney regarding the fiduciary’s administration of the trust. The fiduciary’s obligation to produce the requested information is often determined by whether the relevant state’s law recognizes the so-called “fiduciary exception” to the attorney-client privilege. This article will describe the fiduciary exception to the attorney-client privilege, summarize how the exception has developed in Delaware, a prominent trust jurisdiction and the state in which the leading case on the fiduciary exception derived, and provide examples of approaches adopted by states that do not recognize the fiduciary exception.
Background
The attorney-client privilege is a well-established legal principal that serves to protect confidential communications between an attorney and his or her client from disclosure.1 The fundamental purpose of the attorney-client privilege is to encourage honest and open communications between an attorney and his or her client so that the attorney can provide complete, well-reasoned advice without concern that the client’s confidences will be disclosed.2 The attorney-client privilege is recognized in all 50 states and at the federal level. While the precise formulation varies by jurisdiction, the privilege generally provides that a client can refuse to disclose, and prevent any other person from disclosing, confidential communications made for the purpose of facilitating the rendition of professional legal services to the client provided that those communications are solely between the client, the lawyer, or certain authorized representatives.3
Some communications that would otherwise fall within the scope of the attorney-client privilege will not be protected if one of many well-recognized exceptions apply.4 Several of the better known exceptions to the attorney-client privilege are the crime-fraud exception, which applies to communications made in furtherance of future illegal activity,5 and the testamentary exception, which may apply when issues arise between persons who claim rights to property through the same decedent.6 This article focuses on the fiduciary exception, which, as discussed below, may allow beneficiaries of a trust to gain access to some or all of a fiduciary’s communications with counsel.7
The Fiduciary Exception in Delaware
The fiduciary exception is a common law exception most prominently addressed by the Delaware Court of Chancery in Riggs Nat’l Bank of Washington, D.C. v. Zimmer.8 In Riggs, the trustees hired counsel to prepare a memorandum addressing legal issues and providing an opinion in connection with a petition for instructions and in anticipation of potential tax litigation involving the trust. When the beneficiaries later filed a claim against the trustee for breach of trust in connection with tax-related matters, the beneficiaries sought the memorandum in discovery.
To determine whether the memorandum was protected from production by the attorney-client privilege, the court conducted a two-step analysis.
First, the court considered whether the trustees had retained counsel (a) to represent the trust and to provide advice that would advance the interests of the trust and its beneficiaries, or (b) to protect the trustees’ own interests in anticipation of litigation in which the trustees would be defendants.9 To answer this question, the court examined “the purpose for which [the memorandum] was prepared, and the party or parties for whose benefit it was procured, in relation to what litigation was then pending or threatened.”10 The court concluded that the memorandum was prepared for the benefit of the beneficiaries of the trust, as opposed to the trustees’ own defense in any litigation against the trustees. That court’s analysis focused on the fact that the memorandum had been commissioned in connection with potential tax litigation between the trust and the state rather than claims against the trustee, but also noted that the attorney’s fees for the advice had been paid from the property of the trust, which the court found to be “a strong indication of precisely who the real clients were” and a “significant factor” favoring the beneficiaries’ access to the memorandum.11
Second, the court considered whether the beneficiaries should be permitted to inspect documents prepared by an attorney on their behalf at the request of the trustees or whether the privileges asserted were of “such compelling importance” as to allow the documents to be withheld. The court found that the documents should not be shielded from the beneficiaries, in part because the court believed that it was crucial for beneficiaries to be knowledgeable about the trust’s administration so that the beneficiaries could hold the trustees accountable with respect to the trustees’ exercise of their fiduciary duties. The court noted that this result was consistent with leading treatises and long-standing precedent under English common law, from which Delaware’s trust law principles derived.12
In 2007, Delaware enacted Section 3333 of Title 12 of the Delaware Code, which codified a fiduciary’s right to retain counsel in connection with any claim that has been or might be asserted against the fiduciary. It also provided that the payment of counsel fees and related expenses from the fiduciary fund would not cause the fiduciary to waive, or to be deemed to have waived, any right or privilege including, without limitation, the attorney-client privilege. Section 3333 has been modified several times since its enactment, most significantly in 2015, and now provides as follows:
(a) In the case of a fiduciary that retains counsel in connection with any matter whether or not related to any claim that has been or might be asserted against the fiduciary and pays such counsel’s fees and related expenses entirely from such fiduciary’s own funds, any communications with such counsel shall be deemed to be within the attorney-client privilege.
(b) Except as otherwise provided in the governing instrument, a fiduciary may retain counsel in connection with any matter that is or that might reasonably be believed to be one that will become the subject of or related to a claim against the fiduciary, and the payment of counsel fees and related expenses from the fund with respect to which the fiduciary acts as such shall not cause the fiduciary to waive or to be deemed to have waived any right or privilege including, without limitation, the attorney-client privilege even if the communications with counsel had the effect of guiding the fiduciary in the performance of fiduciary duties. However, in the event that the fiduciary is determined by a court to have breached a fiduciary duty related to such matter, the court may, in its discretion, deny such fiduciary the right to have all or some part of the fiduciary’s counsel fees paid from such fund and may require the fiduciary to reimburse any such fees and expenses that have been previously paid.
As a result of the 2015 amendments, Section 3333 was expanded to expressly provide (i) that communications between a fiduciary and counsel who was both retained by the fiduciary and paid out of the fiduciary’s funds shall be deemed to be within the attorney-client privilege and (ii) that the payment of attorney’s fees from the trust fund does not cause the fiduciary to waive the attorney-client privilege even with respect to communications that have the effect of guiding the fiduciary in the performance of its fiduciary duties.13 The 2015 modifications could reasonably be read to create a bright line rule providing that, if the source of payments for counsel was the trustee’s own funds, any confidential communication with such counsel is deemed privileged.
In 2019, the Delaware Court of Chancery had an opportunity to reconsider Riggs in light of Section 3333. In J.P. Morgan Trust Company of Delaware v. Fisher,14 the trustee consulted with counsel regarding several proposed alternatives related to a financial transaction that would significantly affect a valuable trust asset. After deciding upon a course of action, the trustee filed a petition seeking a declaration that the trustee had acted properly in all respects. In discovery, the beneficiaries sought the production of documents from the trustee relating to the transaction. The trustee produced some of the requested documents but withheld others because of the attorney-client privilege.
In deciding the motion, the court applied the Riggs two-step analysis. First, the court concluded that the trustee was obtaining advice in its role as trustee about matters pertaining to the trust and not for its own defense. Next, the court concluded that the production of the requested information was necessary to enable the beneficiaries to evaluate the trustee’s actions in the exercise of its fiduciary duties. Thus, the court concluded that production was required under the Riggs analysis.15
Turning to the impact of Section 3333, the court concluded that the statute did not supersede Riggs or render it inapplicable. Instead, the modifications clarified that the source of payment for counsel’s fees for the advice has been “de-emphasized” and is “not dispositive” of the trustee’s ability to maintain privilege, and further clarified that a claim against the trustee need not be filed or explicitly threatened for the trustee to maintain privilege as long as it was one “that might reasonably be believed to be one that will become the subject of a claim.”16
Notably, the court specifically addressed and rejected the trustee’s argument that, by modifying Section 3333, the General Assembly adopted a bright line rule that payment of counsel’s fees from the trustee’s own funds causes any confidential communications with such counsel to be covered by the attorney-client privilege. Instead, the court found that Section 3333(a) merely codifies a fiduciary’s common law right to retain counsel and invoke the privilege without creating a statutory barrier to the application of an exception to defeat a claim of privilege in such circumstances. Accepting the trustee’s argument would have overruled Riggs—the progenitor of “an established line of Delaware authority” and the “leading American case on the fiduciary exception”—and supplanted the myriad other exceptions to the attorney-client privilege that may otherwise be applicable.17 The court concluded that result was not a reasonable reading of the language or legislative history of Section 3333.18
In sum, the court in Fisher affirmed the continued viability of Riggs and interpreted the 2015 amendments to Section 3333 to (i) clarify that communications between a trustee and counsel may be protected by the attorney-client privilege notwithstanding whether counsel’s fees are paid from the trustee’s own funds or the trust fund, but (ii) not alter or address Delaware law providing that the application of exceptions to the attorney-client privilege, such as the fiduciary exception, may defeat an assertion of privilege in either such circumstance.
The Fiduciary Exception in Other Jurisdictions
With origins in mid-nineteenth century English trust cases, the fiduciary exception is seen as an established part of the common law by many courts.19 But the exception has not been universally accepted. The following are some examples of how courts outside of Delaware have addressed the fiduciary exception to the attorney-client privilege.20
The Riggs approach is generally recognized as representing the majority rule21 and has been applied by most courts considering the issue.22 Courts that recognize the fiduciary exception often focus on the importance of a fiduciary’s duties to the beneficiaries, which they believe outweighs the importance of maintaining the attorney-client privilege, particularly because the beneficiaries are the individuals who stand to benefit from the legal advice—i.e., the beneficiaries are seen as the attorney’s “real clients.”23
At least one court—The Supreme Court of Arkansas—has declined to expressly adopt the fiduciary exception but effectively reached the same result in a different way. In Estate of Torian v. Smith,24 the Supreme Court of Arkansas ruled that beneficiaries and trustees are deemed to be joint clients, meaning that neither the beneficiary nor the trustee could assert the attorney-client privilege against the other. The Supreme Court of Washington has not ruled directly on the fiduciary exception, but in a dispute over attorneys’ fees in a probate matter, held that “the fiduciary duties of [an] attorney run not only to the personal representatives [of an estate] but also to the heirs.”25 Thus, if faced with whether to adopt the fiduciary exception, courts in Washington may follow the same path as courts in Arkansas.
In some states, however, courts have outright rejected the fiduciary exception. Courts doing so generally rely upon one of two lines of reasoning: (1) the court is loath to inhibit free and open communication between “owners” of trusts and their attorneys, or (2) the court does not believe they have the power to expand on statutory exceptions to attorney-client privilege.
With respect to the first line of reasoning, a handful of courts have emphasized the damage the fiduciary exception could have on attorney-client relationships. Citing that the purpose of the attorney-client privilege is to “encourage full and frank communication between attorneys and their clients,”26 courts are sometimes hesitant to create or apply exceptions. For example, the Supreme Court of Texas has held that communications between the trustee and counsel concerning the administration of the Trust were privileged notwithstanding the trustee’s duty of full disclosure to the beneficiaries.27 Specifically rejecting the fiduciary exception as applied in Riggs, the Supreme Court of Texas explained that, under Texas law, the “real client” was the trustee, not the beneficiary, and that “[w]ithout the privilege, trustees might be inclined to forsake legal advice, thus adversely affecting the trust, as disappointed beneficiaries could later pore over the attorney-client communications in second-guessing the trustee’s actions. Alternatively, trustees might feel compelled to blindly follow counsel’s advice, ignoring their own judgment and experience.”28 The Supreme Court of California has held similarly, explaining that, under California law, the “real client” was the trustee.29 And, in a separate context, the Supreme Judicial Court of Massachusetts has held that there is no direct attorney-client relationship between the trustee’s attorney and the beneficiaries, which could form the basis to reject the fiduciary exception in the future.30 These courts effectively reject the theory that the beneficiary is the “real client.”
With respect to the second line of reasoning, several courts have focused on legislative intent and the court’s lack of authority to expand on statutory exceptions to the attorney-client privilege. For example, the Supreme Court of California held that “the privileges set out in the Evidence Code are legislative creations; the courts of this state have no power to expand them or to recognize implied exceptions.”31 The Oregon Supreme Court reached the same conclusion, finding that Oregon Evidence Code Rule 503 “was intended as a complete enumeration of the exceptions to the attorney-client privilege. Insofar as that list does not include a ‘fiduciary exception,’ that exception does not exist in Oregon….”32 The Supreme Court of Texas has also noted that the fiduciary exception is not identified in Texas Rule of Evidence 503 and that, “if the special role of a fiduciary does justify such an exception, it should be instituted as an amendment to Rule 403 through the rule making process.”33 Relying on the reasoning of the Supreme Courts of California Oregon, and Texas, the Supreme Court of Nevada recently refused to apply the fiduciary exception, stating that “because the Legislature adopted five specifically defined exceptions to the attorney-client privilege in NRS 49.115, we decline to create a sixth by judicial fiat.”34 These courts effectively deferred to the legislature and relied on the legislature’s inaction as a basis for ruling that the fiduciary exception did not apply.
Last, in some states, the legislature has affirmatively acted to reject or limit the fiduciary exception. For example, after the South Carolina Court of Appeals recognized the fiduciary exception in 2005,35 the South Carolina legislature overturned the decision by statute enacted in 2008 that expressly provided that communications between a lawyer and a fiduciary are subject to the attorney-client privilege unless waived by the fiduciary, even if fiduciary funds were used to compensate the lawyer.36 In Hawaii, a Probate Court Rule enacted in 1995 provides that, when an attorney represents a fiduciary (including a trustee): (a) the attorney-client privilege applies to and protects the communications between the attorney; and (b) the attorney has no attorney-client relationship with the beneficiaries of the trust.37
But legislative action does not always have the same effect. As discussed above, to the extent Section 3333 of Title 12 of the Delaware Code could have been viewed as superseding Riggs, the Court of Chancery rejected that reading and affirmed the continued viability of Riggs and the fiduciary exception.38 After the Florida District Court of Appeal recognized the fiduciary exception in 2004,39 the Florida legislature enacted a statute in 2011 that amended the Florida Evidence Code to expressly provide that communications between an attorney and a trust fiduciary are “privileged” and that, in applying the statute, “only the person or entity acting as a fiduciary is considered a client of the lawyer.”40 But the Florida Supreme Court declined to adopt the amendment to the evidence code to the extent it was procedural.41
Conclusion
The existence of the fiduciary exception to the attorney-client privilege can be outcome determinative in a dispute regarding whether a beneficiary is entitled to certain trust information. It is important for trust fiduciaries, beneficiaries, and their counsel to understand the applicable rule when engaging in potentially sensitive communications. In jurisdictions that apply the fiduciary exception, the recipient of and the nature of the advice is key: legal advice about how a trustee should carry out its duties to the trust and its beneficiaries likely must be produced to the beneficiaries, while legal advice obtained for a trustee’s own defense against anticipated, threatened, or asserted claims likely can be withheld. Trustees who desire to obtain legal advice must understand the distinction, take steps at the time the advice is rendered and the time the privilege is asserted to protect their communications with counsel from disclosure, and be aware of various jurisdictions’ treatment of the fiduciary exception.
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J. Zachary Haupt and Matthew R. Clark, “The Fiduciary Exception to the Attorney-Client Privilege in Delaware and Beyond,” NAEPC Journal of Estate & Tax Planning (May 2025)
Reprinted with permission from the NAEPC Journal of Estate & Tax Planning, the official publication of the National Association of Estate Planners & Councils. Copyright © Morris, Nichols, Arsht & Tunnell LLP. These materials have been prepared solely for informational and educational purposes, do not create an attorney-client relationship with the author(s) or Morris, Nichols, Arsht & Tunnell LLP, and should not be used as a substitute for legal counseling in specific situations. These materials reflect only the personal views of the author(s) and are not necessarily the views of Morris, Nichols, Arsht & Tunnell LLP or its clients.
Endnotes
1 Upjohn Co. v. United States, 449 U.S. 383, 389 (1981); Hunt v. Blackburn, 128 U.S. 464, 470 (1888); accord United States v. Jicarilla Apache Nation, 564 U.S. 162, 165 (2011) (“The attorney-client privilege ranks among the oldest and most established evidentiary privileges known to our law.”).
2 Upjohn, 449 U.S. at 389.
3 See, e.g., Uniform Rule of Evidence 502(b). The Uniform Rules of Evidence have been adopted in 8 states and Rule 502(b) reflects the generally accepted formulation of the attorney-client privilege. 1 McCormick on Evidence § 87 (9th ed. 2025); see also Restatement (Third) of the Law Governing lawyers § 68 (2000).
4 See, e.g., Uniform Rule of Evidence 502(d), which sets forth a non-exhaustive list of six exceptions. Other common law exceptions, like the fiduciary exception, are also recognized in some states. Compare J.P. Morgan Trust Company of Delaware v. Fisher, 2019 WL 6605863, at *4 (Del. Ch. Dec. 5, 2019) (explaining that the list of exceptions in Delaware Rule of Evidence 502(d) is “non-exclusive” and recognizing that “[o]ther exceptions are recognized by common law”), with Canarelli v. Eighth Judicial District Court, 464 P.3d 114, 121 (Nev. 2020) (declining to recognize common law exceptions not specifically identified in the Nevada statutes defining attorney-client privilege).
5 United States v. Zolin, 491 U.S. 554, 562-63 (1989).
6 Swidler & Berlin v. United States, 524 U.S. 399, 402-05 (1998).
7 An analogous exception may, in some cases, allow stockholders of a corporation to gain access to communications between a corporation’s directors and officers and its attorneys. See Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), cert. denied 401 U.S. 974 (1971). Though based on similar policy considerations, the two exceptions apply in different contexts and have distinct requirements—notably, stockholders must typically demonstrate a compelling need. The Garner exception is beyond the scope of this article.
8 355 A.2d 709 (Del. Ch. 1976); see United States v. Jicarilla Apache Nation, 564 U.S. 162, 171 (2011) (Riggs is “[t]he leading American case on the fiduciary exception.”); accord 1 McCormick on Evidence § 87.1 n.29 (9th ed. 2025) (referring to Riggs as “[t]he seminal case” on the fiduciary exception).
9 Riggs, 355 A.2d at 711-12.
10 Id. at 711.
11 Id. at 711-12.
12 Id. at 712.
13 80 Del. Laws ch. 153 (2015) (amending 12 Del. C. § 3333).
14 2019 WL 6605863 (Del. Ch. Dec. 5, 2019) (Laster, V.C.). The matter was resolved by a final judgment and order entered on September 16, 2021. No appeal was filed.
15 Id. at *6-7.
16 Id. at *8-9.
17 Id. at *9-10.
18 Id.
19 See, e.g., Wachtel v. Health Net Inc., 482 F.3d 225, 230-32 (3d Cir. 2007) (tracing history of fiduciary exception).
20 Our discussion of other jurisdictions is not intended to provide a complete and accurate statement of the current law in such jurisdictions but rather to provide examples of how some courts outside of Delaware have historically addressed the fiduciary exception.
21 See Wells Fargo Bank v. Superior Court, 990 P.2d 591, 595 (Cal. 2000); In re Kipnis Section 3.4 Trust, 329 P.3d 1055, 1059-62 (Ariz. Ct. App. 2014).
22 E.g., United States v. Jicarilla Apache Nation, 564 U.S. 162, 171-73 (2011); Wachtel v. Health Net Inc., 482 F.3d 225, 232 (3d Cir. 2007); United States v. Mett, 178 F.3d 1058, 1062-64 (9th Cir. 1999); Solis v. Principal Fin. Grp., Inc., 2011 WL 13290335, at *3 (Sept. 6, 2011); Washington-Baltimore Newspaper Guild, Local 35 v. Washington Star Co., 643 F. Supp. 906, 908-09 (D.D.C. 1982); In re Estate of McAleer, 248 A.3d 416, 435-36 (Pa. 2021); Dueck v. Clifton Club Co., 95 N.E.3d 1032, 1063 (Ohio Ct. App. 2017); In re Kipnis Section 3.4 Trust, 329 P.3d 1055, 1061 (Ariz. Ct. App. 2014); Hoopes v. Carota, 531 N.Y.S.2d 407 (N.Y. App. Div. 1988), aff’d, 543 N.E.2d 73 (N.Y. 1989).
23 See, e.g., United States v. Jicarilla Apache Nation, 564 U.S. 162, 172-73, 178 (2011).
24 Estate of Torian v. Smith, 564 S.W.2d 521, 526 (Ark. 1978).
25 In re Estate of Larson, 694 P.2d 1051, 1054 (Wash. 1985).
26 Upjohn Co. v. United States, 449 U.S. 383, 389 (1981).
27 Huie v. DeShazo, 922 S.W.2d 920, 923 (Tex. 1996).
28 Id. at 924, 925.
29 Wells Fargo Bank v. Superior Court, 990 P.2d 591, 595-96 (Cal. 2000).
30 Spinner v. Nutt, 631 N.E.2d 542, 552 (Mass. 1994).
31 Wells Fargo Bank v. Superior Court, 990 P.2d 591, 594-96 (Cal. 2000).
32 Crimson Trace Corp. v. Dais Wright Tremaine LLP, 326 P.3d 1181, 1195 (Or. 2014).
33 Huie v. DeShazo, 922 S.W.2d 920, 924-25 (Tex. 1996). No amendment to Texas Rule of Evidence 503 has been made as of the time of writing. Tex. R. Evid. 503(d).
34 Canarelli v. Eighth Judicial District Court, 464 P.3d 114, 121 (Nev. 2020).
35 Floyd v. Floyd, 615 S.E.2d 465, 482 (S.C. Ct. App. 2005).
36 2008 S.C. Acts 211 § 1 (enacted as S.C. Code Ann. § 62-1-110).
37 Haw. R. Probate 42(a) (“An attorney employed by a fiduciary for an estate, guardianship, or trust represents the fiduciary as client as defined in Rule 503(a) of the Hawaii Rules of Evidence and shall have all the rights, privileges, and obligations of the attorney-client relationship with the fiduciary insofar as the fiduciary is acting in a fiduciary role for the benefit of one or more beneficiaries or a ward.”); Haw. R. Probate 42(b) (“An attorney for an estate, guardianship, or trust does not have an attorney-client relationship with the beneficiaries of the estate or trust or the ward of the guardianship, but shall owe a duty to notify such beneficiaries or ward of activities of the fiduciary actually known by the attorney to be illegal that threaten the security of the assets under administration or the interests of the beneficiaries.”).
38 J.P. Morgan Trust Company of Delaware v. Fisher, 2019 WL 6605863, at *8-10 (Del. Ch. Dec. 5, 2019).
39 Jacob v Barton, 877 So.2d 935, 937 (Fla. Dist. Ct. App. 2004).
40 2011 Fla. Sess. Law Serv. Ch. 2011- 183 § 1 (enacted as Fla. Stat. § 90.5021).
41 In re Amendments to Florida Evidence Code, 144 So.3d 536, 536-37 (Fla. 2014).