Chicago dentist Max Feinberg died in 1986. Prior to his death, he had a standard pourover will and revocable living trust. The trust had an unusual catch: His grandchildren wouldn't inherit a penny if they married someone who wasn't Jewish or whose non-Jewish spouse did not convert within one year. We could call this a "religious preference clause."
More specifically, the trust provided that upon his death, his assets would be split into a standard credit shelter trust and a marital deduction trust. Max's widow, Erla, was the lifetime income beneficiary of both trusts, and had a limited right to withdraw principal.
Upon Erla's death, the property would be distributed to Max's descendants. Fifty percent of the trust estate was to be held in further, separate trusts for Max's grandchildren during their lifetime on a per stirpital basis. The trust provided that any descendant who married outside the Jewish faith or whose non-Jewish spouse did not convert to Judaism within one year would be disinherited.
Feinberg's will gave control of the trusts to his wife, Erla. When she died and the grandchildren were to inherit $250,000 each, she followed her husband's wishes and imposed the same restrictions. By that time, four of the five grandchildren had married gentiles. Erla Feinberg's death triggered a series of disputes. One disinherited granddaughter had argued it was improper for a will to set up conditions that promote religious intolerance in people's marriage decisions or even encouraged couples to divorce.
On September 24, 2009, the Illinois Supreme Court unanimously ruled that Feinberg and his wife were within their rights to disinherit any grandchildren who married outside the faith as long as the method of doing so did not encourage divorce. The court's ruling was based partly on technicalities in the way this estate was arranged. The court did not provide a broad ruling on whether similar religious restrictions would be valid under other circumstances.
The state Supreme Court based much of its decision on the fact that Erla Feinberg's will awarded set amounts of money based on the marriage status of the grandchildren at the time of her 2003 death — either they qualified for the money or they didn't. The court said that meant the will didn't try to control what the grandchildren would do in the future and didn't offer any incentive for a particular couple to divorce.
A will that provided money year after year if the heir did not marry a gentile might not pass muster, the court suggested. That's because it would amount to a dead man trying to control actions for years to come and would encourage divorces so that people could claim an inheritance.
"Equal protection does not require that all children be treated equally . . . and the free exercise clause does not require a grandparent to treat grandchildren who reject his religious beliefs and customs in the same manner as he treats those who conform to his traditions," Justice Rita Garman wrote in a ruling that overturned decisions by two lower courts.
A copy of this interesting decision, In Re Estate of Max Feinberg, can be found at: http://www.state.il.us/court/OPINIONS/SupremeCourt/2009/September/106982.pdf
Posted by Henry Moravec, III. Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/
