How far can a testator go
in putting conditions on inheritances?
Most estate-planning attorneys come across clients who want to attach some sort of condition on gifts they make to descendants and other beneficiaries. And most estate-planning lawyers know that conditions creating restraints against marriage, religion and family relationships are often void as against public policy.
But maybe we shouldn’t be so sure. Apparently, not all of these intrusive conditions will get knocked down automatically.
Just look at In re Estate of Feinberg, 383 Ill. App. 3d 992 (1st Dist. June 30, 2008). This case is actually going before the Illinois Supreme Court.
Max Feinberg created a trust in which he declared that any descendant of his — that is, any descendant other than his children — “who marries outside the Jewish faith (unless the spouse of such descendant has converted or converts within one year of the marriage to the Jewish faith) and his or her descendants shall be deemed to be deceased for all purposes of this instrument as of the date of such marriage.”
The parties in Feinberg refer to this provision as "the Jewish clause."
An Illinois circuit court held that this Jewish clause was invalid and an appellate court affirmed, both finding it unenforceable as contrary to public policy.
But on a three-judge panel of Illinois' First District Appellate Court, one of the justices disagreed. Indeed, Justice Alan J. Greiman dissented passionately, stating: “Max and Erla had a dream. . . to preserve their 4,000 year old heritage.”
Nonsense, countered Presiding Justice Patrick J. Quinn of the Illinois Appellate Court in an opinion concurring with the majority. If Jewishness were Max’s intent, said Justice Quinn, he wouldn’t have excluded his children from the requirement. Also, the Jewish clause says nothing about barring one of the grandchildren from converting to another religion.
This is not a case about preserving Jewish heritage, declared Justice Quinn. This is a case, he said, of a second generation robbing their own children of their inheritance.
Max Feinberg and his wife, Erla (also deceased), were survived by five grandchildren. All the grandchildren married, but only one married a Jew.
Several cases erupted. They were consolidated and the question about the Jewish clause went to the appellate court.
One of the grandchildren who’d married a non-Jew, Michele Trull, sued the co-executors of the estates. Those executors happened to be her father (Michael Feinberg), her aunt (Leila Taylor) and Leila’s husband (Michele’s Uncle Marshall).
Michele claimed that the three had engaged in a conspiracy to evade estate taxes and had misappropriated millions of dollars from her grandparents’ estates.
Michael Feinberg with Leila and Marshall Taylor sought to have Michele’s case dismissed because the Jewish clause deemed Michele to be deceased and therefore without an interest in the estate.
Writing for the majority on the appellate panel, Justice Joy V. Cunningham noted that Illinois courts generally have upheld the principle that testamentary provisions are void as against pubic policy if they discourage marriage or encourage divorce.
Things have been different elsewhere (at least in the past), Justice Cunningham noted. Briefly surveying 30- and 50-year-old cases from other states — including Massachusetts, New York, and Ohio — the judge found that most courts did uphold conditions requiring marriage to persons of a certain faith or revoking gifts to beneficiaries who married persons not of a certain faith.
But, Justice Cunningham pointedly observed, the Restatement (Third) of Trusts is consistent with Illinois law. The Restatement provides that trust provisions that are contrary to public policy are void. More specifically, according to the Restatement, a condition is invalid if it encourages disruption of a family relationship, discourages formation or resumption of such a relationship, or seriously interferes with a beneficiary’s freedom to obtain a divorce or exercise his or her freedom to marry.
The court’s majority opinion ends by noting that the clear intent of the Jewish clause was to influence the marriage decisions of Max’s grandchildren based on a religious standard and thereby to discourage them from marrying outside the Jewish faith. As such, the clause seriously interferes with, and limits the right of individuals to marry whom they choose. It is therefore unenforceable.
Presiding Justice Quinn took no issue with the majority opinion. Rather, he used his concurrence to make it clear that Justice Greiman’s dissenting position “could just as well result in the courts being required to enforce the worst bigotry imaginable.” Based on Justice Greiman’s logic, said Justice Quinn, he would uphold the Jewish clause even if it punished the grandchildren for marrying someone who was “Jewish or black or a member of any other group Max did not like.”
Courts are not well suited to decide all the various questions that might arise in the enforcement of such conditions, said Justice Quinn. What would happen, he asked, if one of Max and Erla’s grandchildren initially married a non-Jewish person but subsequently married a Jewish person? Would the grandchild be “resurrected” upon the second marriage?
To support his dissent, Justice Greiman examined a multitude of cases from outside Illinois. But most were decided in the 1950s or earlier. According to Justice Greiman, these cases illustrate that the Illinois appellate court “would be in the minority if [it] failed to uphold Max and Erla’s limitation.” According to these cases, partial restraints on marriage are valid unless they are unreasonable, and therefore conditions on gifts prohibiting a beneficiary from marrying a specific individual have been upheld.
Justice Greiman also cites various secondary sources generally providing that testamentary provisions requiring a beneficiary to renounce or embrace a certain religion are valid and attorneys may advise their clients that, within limits, they may include such provisions in their estate plans.
Given the heated exchange between justices Greiman and Quinn, perhaps it’s not surprising that, on Nov. 26, 2008, the state high court agreed to hear the case.