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“The Jewish Clause” — A Potentially Incindiery Discussion of “Partial Restraints” or “Incentive Trusts”

We typically do not turn to the world of trusts and estates for zesty legal and religious discussions until our colleagues at the Florida Probate & Trust Litigation Blog dug up the story of The Jewish Clause.

The issue stems from an Illinois decision from last year where a trust was written with the so-called “Jewish Clause”: namely, if one of the descendents married a non-Jewish person, they were cut out of the trust.  More specifically, they would be treated as deceased.

While our co-legal blogger’s post is informative and includes some links to coverage in other legal publications, the opinion itself is both the primary source and, well, pretty self-explanatory.  

In Estate of Feinberg, the Illinois court went through the procedural (family) history and then focused on the key question: can such a “partial restraint” or “incentive trust” work as a matter of law?

In that state, the public policy is that probate documents cannot discourage marriage or encourage divorce.  The majority came to the conclusion that “posthumous meddling” of this kind was against public policy.  

The concurring opinion dug in a little deeper, concluding that the court was being asked to “enforce the worst bigotry imaginable.”  That same opinion even went after a set of parents in the action, noting that they were trying to exclude their own children from inheritance based upon religion: “If Michael and Leila’s actions in instituting this suit and prosecuting this appeal is any indication of their future intentions toward their children, this potential inheritance does not rise to the level of even a forlorn hope.”  A jab was also thrown at the dissenter, making what appeared to be an oblique reference to citations to World War II era case law.

The dissent came at the issue from a different angle and probably opened the door for an accusation of partiality.  But that would be a superficial view as there was scholarship in there — even if you disagree with the conclusion.  

The dissenting opinion began with the favorable overview, “Max and Erla Feinberg seek to preserve their 4,000-year-old heritage…”  But it was not an emotionally-driven, legally-blind opinion.  Contrary decisions were distinguished because the intent was to provoke divorce; favorable decisions from other states were noted.  In the instant case, the trustee did not even have to keep the property for descendents — and, prior to this opinion, there was no precedent to follow.

The Florida Probate blog concluded that Florida court would rule the same way.  I’ll have to bounce that off other probate lawyers.  You are welcome to comment below — its pretty anonymous so fire away (responsibly).  

We see their point, resting primarily on the Restatement of Trusts sect 29.  That said, we wholly endorse their take away message: you likely can only go so far with incentive trusts.

One Response to ““The Jewish Clause” — A Potentially Incindiery Discussion of “Partial Restraints” or “Incentive Trusts””

  1. AndrewBoldman says:

    da best. Keep it going! Thank you

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