DEAD HANDS

A Social History of Wills, Trusts, and Inheritance LawBy Lawrence M. Friedman

Stanford University Press

Copyright © 2009 Lawrence M. Friedman
All right reserved.
ISBN: 978-0-8047-6209-0

Contents

Acknowledgments..............................................................................................ix1 Introduction...............................................................................................12 Distribution after Death...................................................................................153 The Last Will and Testament................................................................................584 Breaking a Will: Will Contests and Their Social Meaning....................................................825 Will Substitutes...........................................................................................1006 Dynastic and Caretaker Trusts..............................................................................1117 Control by the Dead and Its Limits: The Rise and Fall of the Rule against Perpetuities.....................1258 Charitable Gifts and Foundations...........................................................................1409 Death and Taxes............................................................................................17110 Conclusion................................................................................................179Notes........................................................................................................185Index........................................................................................................217

Chapter One

INTRODUCTION

ON AUGUST 13, 2007, Brooke Astor, at the ripe old age of 105, died at her estate, Holly Hill, in New York. Brooke was, by all accounts, a warm and winning human being; she was often called New York City's "unofficial first lady." She was also a very rich lady. She had inherited a massive fortune from her third husband, Vincent Astor. She became well known for her charitable activities; she gave away more than $200 million. Money, she said, "is like manure"; it "should be spread around." In 1998 the Presidential Medal of Freedom was awarded to Brooke Astor.

But in her last years, ill and demented, she sank into the dim world of those who suffer from Alzheimer's disease. Her one son, Anthony Marshall, acted as her guardian, managing her affairs. His management, however, had somewhat scandalous results. Marshall's own son, Phillip, accused him of abusing the old lady and pillaging her estate. Anthony, it was claimed, lined his own pockets, while Brooke Astor slept on a couch that smelled of urine and lived on pureed peas and oatmeal; her beloved dogs, Boysie and Girlsie, were locked in a pantry. The court removed Anthony from his position of trust. The court named Annette de la Renta, an old friend, as guardian of the person-in charge of Brooke Astor's life and health; a bank became guardian of the estate-in charge of her fortune. And when Brooke Astor finally died, an unseemly quarrel broke out over the estate; the scandal even touched the lawyers who were involved.

Squabbles over the money and bodies of old people, and over the estates of the dead, are nothing new. They have been around for centuries. In 1889, for example, the city of Pasadena was abuzz over what the newspapers called the Banta will contest. Isaac Banta, who died in Ohio, had left behind considerable property in California. His legacy also included a nasty fight, between his daughter and son-in-law on one side, and the rest of his family on the other. The son-in-law, Pierce (according to the family), had gotten hold of this old, feeble man and plied him with alcohol and laudanum. The old man was a virtual prisoner; Pierce, moreover, had poisoned his mind against his near and dear ones and induced Banta to give the bulk of his property to Pierce. Testimony on both sides was as different as night and day. One witness argued that Banta was "perfectly rational," and in fact an "exceedingly shrewd businessman." Another, Frank Wilson, called him "crazy as a loon" and told a story about a trip to the mines, during which Banta jumped out of a wagon "and ran off into the desert"; they had to bring him back forcefully, singing and carrying on in a way that seemed totally insane. In the end, after a long parade of witnesses, the jury sustained the will: they declared that the old man was sane after all, and that there was no fraud, no undue influence. There was talk of an appeal to the California Supreme Court; the family, however, rather meekly agreed to a settlement a month or so later. Pierce resigned as trustee of the old man's property, but essentially he won the case.

The struggle over the Banta estate was unusual. Every year, thousands of estates pass through probate (which is, briefly, the legal process of settling the estate of a deceased person), without a whisper in the press. The Banta case was extreme; yet old age, decay, family quarrels, and money passing from one generation to another-these are normal, everyday affairs. They do not, ordinarily, involve courts and lawsuits, let alone newspapers. The machinery, as a rule, runs smoothly. In some ways the legal system plays an obvious role in this process; in other ways it is silent and almost invisible. Some concepts that are relevant here are so fundamental that we take them for granted: the concept of family, or private property, or marriage. Yet these are legal concepts as well as everyday ideas; and the probate process presupposes them.

Even when the role of the legal system is obvious, it does its work as a matter of routine. But what is routine is by no means unimportant. Routine is the heart of social action; a person's heartbeat is routine; the work of the lungs is routine; the work of brain, stomach, legs, and kidneys is routine. So too of many actions and habits of daily life. And so too of the rhythm of life and death-and the passing of wealth and property from dead hands to living ones.

This book is about both the routine and the unusual in that branch of law we call the law of succession. In simple language, it is about the way property changes hands when a person dies, and about related processes that go on, as the legal phrase has it, "in contemplation of death." It is about cases like Isaac Banta's, but also about the untold thousands-or millions-who leave some sort of legacy behind when they die: people who matter to the people who survive and mourn them, but otherwise hardly make a ripple in the vast ocean of the law.

The whole edifice of the law of succession, legally and socially, rests on one brute fact: you can't take it with you. Death is inevitable, fundamental, and definitive. When people die, everything they think they own, everything struggled, scrimped, and saved for, every jewel and bauble, every bank account, all stocks and bonds, the cars and houses, corn futures or gold bullion, all books, CD's, pictures, and carpets-everything will pass on to somebody or something else. A certain amount can be spent on a funeral or a fancy coffin. A person can ask for, and get, an elaborate headstone and can buy a policy of "perpetual care" for the grave. People can, if they wish, be buried still wearing their favorite ring or a wedding band, or dressed in their favorite clothes. But these are incidentals. Fundamentally, when the body flatlines, a person's iron grip on "assets," all rights of ownership, all powers and authority supported by custom and law, dissolve, turn limp and...