People of faith in New Jersey may have raised their children with the expectation that they would continue to uphold the family beliefs as they grow, leave home and marry. They may have provided religious education for their children and grandchildren, initiated family dialog about values, and lived as an example of their religious beliefs.
Sometimes, we offer rewards for desired behavior and punishments for behavior that we do not approve of. Those efforts may continue throughout life, and even into estate planning decisions made in the hope of influencing our children to make decisions consistent with our values and religious beliefs.
How far can you legally go through estate planning to ensure your children and grandchildren continue down your religious path? For example, can you disinherit family members for non-compliance with your religious values?
There are a few clear limits that have already been established in probate law, and pushing those limits in your estate planning could mean a costly court battle for your beneficiaries -- and it seems unlikely that an acrimonious probate battle is the most effective way to promote your religious beliefs.
Nevertheless, many people of faith are deeply committed to keeping their children and grandchildren in the faith. Historically, estate planning decisions intended to make inheritances contingent upon the beneficiaries' compliance with certain requirements, such as marrying within ones faith or attending church, have been handled through trusts.
For example, a 2009 trust contest in Illinois involved, trusts set up by religious Jewish man. He had set up trusts which, upon his wife's death, were available to his grandchildren if they complied with certain conditions. They either had to marry within the faith, or their spouses would need to convert to Judaism within a year of their marriages. Otherwise, the grandchildren would receive nothing.
Only one of five grandchildren married within the faith and received the approximately $250,000 trust legacy. The others went to probate court and challenged the terms of the trusts as illegal. After years of estate litigation that ultimately ended at the state supreme court, the trusts were upheld.
Even though the Illinois case was ultimately upheld, however, estate planning attorneys from across the country caution their religious clients that such an outcome is far from guaranteed. Decades of court decisions across the nation, changes in the law, and numerous other factors can make it extremely difficult to create restrictive trusts that will be upheld by courts -- and even then, costly, time-consuming litigation may be required.
So how can a person of faith leave an effective spiritual legacy? That will be the subject of our next post.
Source: MarketWatch, "Can you make your heirs honor your beliefs?" Rachel Emma Silverman, Nov. 13, 2012