Sunday, November 09, 2014

Estate or trust beneficiaries need to beware of the "dead hand", although we don't live inside George Eliot's novels

Here’s a good topic for estate planning:  the “dead hand”, where the distribution of an estate is conditioned on the beneficiary’s performing or behaving in a certain manner, as laid out in this this paper, “Dead Hand Control: Conditional Bequeaths and Devisements”, link here
The “dead hand” was often a plot device in Victorian novels, but has generally been less well known in the US in recent decades.  However, there have movies made about the issue, like “The Bachelor” (directed by Gary Sinyor, New Line, 1999), where the beneficiary has to get married within a certain time.  More practical is the expectation that the beneficiary raise the decedent’s or another relative’s children, which has the practical result of expanding the notion of “family responsibility”.  Consider the Disney film "Raising Helen".
It is possible for a “dead hand” to set up a test of the beneficiary’s sense of purpose or integrity, if his or her personal values in areas like marriage, relationships, sexuality, or self-expression are challenged.  However, courts in recent years have been more reluctant to nullify dead hand provisions that violate “public policy”, such as requirements not to marry outside of a religion or race.  Eventually, the public policy provision in some states might apply to gay marriage, but that’s probably a decade away at least.
Findlaw has a page on the issue, here and is somewhat lukewarm on the practice. 
The New York Times has a column on the topic, by John Masik, from March 2014, here.  The executor has to be separate from the beneficiary to monitor the behavior of any beneficiary.  

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