Category Archives: Wills/Inheritance

New Article: Inheriting Privilege

New Article: Allison Anna Tait, Inheriting Privilege, Minnesota Law Review, Vol. 106, 2021 (forthcoming). Abstract below:

All families may be created equal, so to speak. But differences between families in terms of economic wealth, resource networks, and access to cultural capital are both severe and stark. A large part of what shapes this scenery of economic possibility is the legal framework of wealth transfer. Wealth travels through generations and sticks, crystallizing in predictable places and shapes, thereby embedding complex forms of inequality within and between families. The family trust, in particular, is a mode of transfer that facilitates wealth preservation as well as wealth inequality. Family trusts are tailored to convey and defend complex patrimonies in ways that no other form of wealth transfer can do. Wills, the other most common form of wealth transfer, do not have the same functionality and can only effectuate a one-time transfer, making it difficult to exert long-term control over beneficiaries.

This Article’s primary goal is to excavate the myriad ways in which the family trust is a driver of inequality by explaining the family trust’s plasticity and ability to bend to the needs of high-wealth families. The Article accomplishes this by demonstrating how the family trust facilitates not only wealth inequality but also social and cultural inequality. These explorations into complex inequality and its furtherance by the family trust are useful because they help us better appreciate the significant role that family trusts play in the evolving story of class, gender, and race privilege in the United States. Attending to the practices and possibilities of the family trust also leads us to a better understanding of how trust reform might begin to dislocate the family trust from its central positioning within the legal architecture of inequality. Ultimately, the family trust does not have to be coextensive with elite family advantage; it can be reimagined to work on behalf of communities that are economically vulnerable and historically dispossessed.

New Article: Justifying inherited wealth: Between ‘the bank of mum and dad’ and the meritocratic ideal

New Article: Liz Moor & Sam Friedman, Justifying inherited wealth: Between ‘the bank of mum and dad’ and the meritocratic ideal, Economy and Society, 2021. Abstract below:

How do people reconcile belief in meritocracy with the receipt of unearned economic gifts? Drawing on interviews with first time homeowners who had bought property with familial gifts or inheritances, we find that many downplay the intergenerational privilege associated with gifting by reporting extended family histories of working-class struggle, upward social mobility and meritocratic striving. Interviewees also draw boundaries between their own wealth and the less legitimate wealth of others, or dispute the significance of gifting compared to other inequalities. We further argue that gifting is a site where two competing logics, the ‘domestic’ and family-orientated and the ‘civic’ and meritocratic, collide. While these competing principles appear to be in conflict, we detail how many labour discursively to bring them into alignment. Here interviewees deploy a humble ‘intergenerational self’ to recast familial gifts as evidence of multigenerational meritocratic success. Yet, while some successfully reconcile these conflicting ‘orders of worth’, for others the tension remains unresolved.

New Article: How Should Inheritance Law Remediate Inequality?

New Article: Felix Chang, How Should Inheritance Law Remediate Inequality?, Wash. L. Rev. Vol. 97 (2022). Abstract below:

This Essay argues that trusts and estates (“T&E”) should prioritize intergenerational economic mobility—the ability of children to move beyond the economic station of their parents—above all other goals. The field’s traditional emphasis on testamentary freedom fosters the stickiness of inequality. For wealthy settlors, dynasty trusts sequester assets from the nation’s system of taxation and stream of commerce. For low-income decedents, intestacy splinters property rights and inhibits their transfer, especially to nontraditional heirs.

Holistically, this Essay argues that T&E should promote mean regression of the wealth distribution curve over time. This can be accomplished by loosening spending in ultrawealthy households and spurring savings and investment in low-income households.

T&E scholars are tackling inequality with greater urgency than ever before; yet basic questions remain. The Essay contributes to these conversations by articulating a comprehensive framework for progressive inheritance law that redresses long-term inequality.

Op-Ed: Tax the Rich and Their Heirs

Op-Ed: Lily Batchelder, Tax the Rich and Their Heirs, N.Y. Times (June 24, 2020).

New Article: Of Piketty and Perpetuities: Dynastic Wealth in the Twenty-First Century (and Beyond)

New Article: Eric Kades, Of Piketty and Perpetuities: Dynastic Wealth in the Twenty-First Century (and Beyond), 60 B.C.L. Rev. 145 (2019). Abstract below:

For the first time since independence, in a nation founded in large part on the rejection of a fixed nobility determined by birth and perpetuated by inheritance, America is paving the way for the creation of dynastic family wealth. Abolition of the Rule Against Perpetuities in over half the states along with sharp reductions in, and likely elimination of, the federal estate tax mean that there soon will be no obstacles to creating large pools of dynastic wealth insuring lavish incomes to heirs for generations without end. The timing of these legal changes could hardly be worse. Marshaling innovative economic data extending back centuries, Thomas Piketty has shown that the relatively egalitarian incomes enjoyed in developed economies from the end of World War II until around 1980 were an aberration and that we are in the process of returning to the historical norm of much greater income and wealth inequality. This Article shows, unhappily, that this revival of unending inherited wealth is of even greater concern than previously thought. In doing so, this Article makes three significant contributions to the growing literature on income inequality and its devastating effects. First, this Article reveals the importance of Piketty’s work to the law of inheritance, and in particular, it extends his “macro” economic insights to the “micro” level of families and the potential role for newly-legitimated perpetual trusts to instantiate a nobility consisting of a relatively small group of families forever privileged by ever-expanding inherited wealth. Second, this Article identifies three devastating consequences of perpetuities, consequences that more than justify rules restricting perpetuities. Finally, this Article reconceptualizes the harms resulting from perpetuities and proposes innovative normative solutions carefully calibrated to ameliorate those harms.

New Article: Asymmetries in the Generation and Transmission of Wealth

New Article: Felix B. Chang, Asymmetries in the Generation and Transmission of Wealth, forthcoming Ohio St. L.J. Jotwell review here. Abstract below:

This Article assigns a redistributive role to the legal rules of trusts and estates. Unlike business law, trusts and estates has lagged in articulating a comprehensive theory on inequality. Consequently, income inequality is compounded intergenerationally as wealth inequality, with dire consequences for economic productivity and social stability. To move the discourse on wealth inequality, this Article explores the divergent approaches toward inequality in business law and trusts and estates.

Additionally, this Article recasts trusts and estates’ legal rules as wealth transfer mechanisms. Four categories of rules are implicated: (1) rules that interact with the tax system, (2) rules that govern relations between beneficiaries and creditors, (3) rules that govern relations between beneficiaries and trustees, and (4) rules that govern relations among beneficiaries.

More broadly, this Article contributes to three lines of scholarly debates. The first revolves around the propriety of drawing analogies between trust law and the law of enterprise organization. The second is whether legal rules or the tax system better effectuates redistribution. The third is whether legal rules should reflect our notions of fairness or welfare.

New Article: Improving Tax Rules by Means-Testing: Bridging Wealth Inequality and ‘Ability to Pay’

New Article: James M. Puckett, Improving Tax Rules by Means-Testing: Bridging Wealth Inequality and “Ability to Pay”, 70 Okla. L. Rev. 405 (2018). Abstract below:

The federal income tax can and should do more to address wealth disparities and income inequality. The income tax does not directly count wealth, and the realization rule and basis “step-up” at death exclude substantial amounts of income for the wealthy. The Constitution limits Congress’s ability to tax wealth. Despite these serious challenges, this Article considers how to potentially bridge the gap between wealth and the income tax. For example, asset-based phase-outs in the income tax should pass muster without apportionment, although their bite would necessarily be limited. The Article posits that the public would be more receptive to phase-outs than more progressive tax brackets. Relevant to complexity, the existing literature has identified potential mark-to-market solutions to correct the exclusion of unrealized gains. The design of asset-based phase-outs would be prefigured to some extent by whether these proposals gain traction. The income tax, to be sure, cannot by itself solve the problem of wealth inequality. Principles of tax justice, however, arguably require greater attention to wealth in measuring the taxpayer’s “ability to pay.”

New Article: Distributive Justice and Donative Intent

New Article: Alexander A. Boni-Saenz, Distributive Justice and Donative Intent65 UCLA L. Rev. 324 (2018). Abstract below:

The inheritance system is beset by formalism. Probate courts reject wills on technicalities and refuse to correct obvious drafting mistakes by testators. These doctrines lead to donative errors, or outcomes that are not in line with the decedent’s donative intent. While scholars and reformers have critiqued the intent-defeating effects of formalism in the past, none have examined the resulting distribution of donative errors and connected it to broader social and economic inequalities. Drawing on egalitarian theories of distributive justice, this Article develops a novel critique of formalism in the inheritance law context. The central normative claim is that formalistic wills doctrines should be reformed because they create unjustified inequalities in the distribution of donative errors. In other words, probate formalism harms those who attempt to engage in estate planning without specialized legal knowledge or the economic resources to hire an attorney. By highlighting these distributive concerns, this Article reorients inheritance law scholarship to the needs of the middle class and crystallizes distributive arguments for reformers of the probate system.