In Estate of Feinberg, 383 Ill. App. 3d 992 (1st Dist. June 30, 2008), an Illinois appellate court ruled a testator could NOT disinherit his grandchildren for marrying non-Jews. Here’s how the case was summarized in this piece in the Chicago Jewish News:
When Max Feinberg was in dental school in the 1920s and ’30s, he was one of only a handful of Jews in his class and was subjected to anti-Semitic slurs. He graduated at the height of the Depression and worked a seven-day week to build his dental practice. Although he did not adhere to the Orthodox Jewish practices in which he was raised, his Judaism was a crucial part of his life. He and his wife, Erla, belonged to a Conservative synagogue, observed Jewish tradition and always celebrated Jewish holidays.
Before he died in 1986 at age 77, Feinberg had his attorney insert a clause in his will concerning the distribution of his considerable financial assets. It stated that none of his grandchildren, or their children or grandchildren, would inherit the $250,000 he had allotted to each of them if they married a non-Jewish spouse unless the spouse converted to Judaism.
Max Feinberg couldn’t have known that that clause would become the subject of intense scrutiny and the basis of a lawsuit. In it, one of his grandchildren sought to prove that the clause was invalid. An Illinois court agreed. Now the Illinois Appellate Court has confirmed the decision, with one Jewish justice offering an impassioned dissent. There’s a possibility the case may go to the Illinois Supreme Court next.
It’s not uncommon to see estate-planning articles touching on the pros and cons of “incentive trusts”: trusts that use money to encourage or discourage certain behaviors [click here]. The take-away for Florida estate planners from the Feinberg opinion is that love ’em or hate ’em, you can only go so far with incentive trusts; get too creative and your client’s estate plan may meet the same fate Max Feinberg’s did.
By the way, I’m pretty sure a Florida court would rule the same way as the Illinois court did. If you come across this issue in your practice you’d do well to focus on Restatement of Trusts §29, which the Illinois court relied on heavily in its opinion. Here’s the key excerpt from the Feinberg opinion:
The Restatement Third of Trusts provides that trust provisions which are contrary to public policy are void. It gives as a specific example a provision that all of a beneficiary’s rights to a trust would terminate if he married a person who was not of a specified religion:
[Comment j.] Family relationships. A trust or a condition or other provision in the terms of a trust is ordinarily * * * invalid if it tends to encourage disruption of a family relationship or to discourage formation or resumption of such a relationship. * * *
* * *
In addition, a trust provision is ordinarily invalid if it tends seriously to interfere with or inhibit the exercise of a beneficiary’s freedom to obtain a divorce * * * or the exercise of freedom to marry * * * by limiting the beneficiary’s selection of a spouse * * *. * * *
* * *
[Illustration 3.] The marriage condition terminates all of [settler’s nephew] N’s rights if, before termination of the trust, he ‘should marry a person who is not of R Religion,’ with the same gift over to C College. The condition is an invalid restraint on marriage; the trust and N’s rights will be given effect as if the marriage condition and the gift over to C College had been omitted from the terms of the trust.
Restatement of Trusts § 29, Explanatory Notes, Comment j, Illustration 3, at 62-64 (3d ed.2003).
We hold that under Illinois law and under the Restatement (Third) of Trusts, the provision in the case before us is invalid because it seriously interferes with and limits the right of individuals to marry a person of their own choosing.