Friday, May 14, 2010
Benjamin Wolf has recently published his note entitled Resolving the Conflict Between Jewish and Secular Estate Law, 37 Hofstra L. Rev. 1171 (2009).
The conclusion is below:
The note of indebtedness method, in conjunction with a typical last will and testament is likely to be the most practical approach to eliminate any conflict between secular and Jewish inheritance law for the majority of observant Jewish individuals. As this Note has demonstrated, this method would alleviate the conflict between observant Jews’ estate planning goals according to most authorities on Jewish law. And since its enforceability in secular courts is irrelevant, its effectiveness under secular law poses no difficulty.
Relatively high net-worth clients may prefer to use methods other than the note of indebtedness to address the conflict between Jewish and secular inheritance law. They may use various other methods of estate planning that are often used to minimize tax liability or to avoid the costs associated with probating one’s estate. Such individuals may give the maximum nontaxable gift to each of their grandchildren directly or to a trust established for each grandchild’s benefit every year. Alternatively, they may set up trusts for themselves or their spouses in order to avoid probate costs and ensure that their assets are used in accordance with their wishes after they pass away. Estate plans such as these would place those assets outside the scope of one’s “probate estate” which would have reverted to his halachic heirs at death, thus solving the Jewish/secular inheritance law problem. However, this author believes that it would still be advisable for such individuals to execute a last will and testament and a note of indebtedness to remove the conflict between secular and Jewish inheritance law as to the small amount of property that he may own at death which he failed to give or transfer out of his “probate estate.”
Although it is not appropriate for every circumstance, it is this author’s opinion that for the majority of individuals, the method with the widest rabbinic acceptance, the most practical, and lowest maintenance method of halachic estate planning would be the execution of a typical last will and testament by both a husband and wife, according to their wishes, and executing notes of indebtedness along with the letters recommended by Rabbi Feivel Cohen. It should also be noted that some clients may follow rabbinic authorities that differ with the approach laid out in this Note. If an attorney is consulted by a client whose rabbi does not recommend the note of indebtedness method, this author would encourage him to communicate with that client’s rabbinic authority in order to discover which estate planning methods are acceptable to that client.
However, even those clients who dispose of the majority of their assets by inter vivos gift or through trusts should probably execute a note of indebtedness in order to create the incentive for the halachic heirs not to challenge the distribution of those items that fall outside of the trust corpus in a beis din.