Trust or Trusts

Q. I disapprove of the conduct of one of my children. Can I make a bequest conditional on his reform?

A. In a previous column I wrote that Jewish law discourages disinheriting a child when we disapprove of his or her conduct. At the end of life, as we sever our connection with the living and approach the World of Truth, it is best to make an expression of trust and hope. An exception would be if there is a well-founded concern that the money would be used in a destructive or self-destructive way.

However, as one astute reader pointed out, there seems to be an intermediate option between giving an irresponsible child an inheritance and cutting him out of your will: making a conditional bequest, so that he gets the money only if he "shapes up". Today such a condition is often formalized in the form of a so-called "incentive trust".

Such conditional bequests have been common for ages, and the conditions have changed little over the generations: Parents want to make children get married, remain faithful to their religion, improve their character, and so on. These conditions are found in Jewish communities as well. The Shulchan Arukh (authoritative Code of Jewish law), citing Maimonides, writes: "A minor who grows up and eats and drinks too much and goes in a bad way, the court does not keep his money from him nor appoint a guardian, unless the bequeather stipulated that they shouldn't give him unless he is respectable and successful, or that they shouldn't give him until after a substantial time." (1)

So we see that Jewish law sanctions the use of such conditions in a bequest. My impression is, however, that such trusts are relatively rare. The main concern I see with such a stipulation is that it is likely to be perceived by the child not as an incentive or reward, but rather as a punishment for not "toeing the line". Most children have a fair expectation of getting a piece of the parent's inheritance and consider being cut out a punitive measure. This is the reason that our law discourages disinheriting a wayward child, as we explained in the previous article.

The Talmud tells us that demeaning punishments are forbidden and counterproductive: "'Don't put a stumbling block before the blind' -- this refers to someone who spanks a grown son." (2) A father has the right and indeed responsibility to educate and discipline his children, and in the time of the Talmud this gave him a technical legal right to use corporal punishment. Even so, one who punished his grown son in this way was not only condemned but actually put under a ban, because it is counterproductive to administer discipline to a grown person in such a demeaning way.

This idea reinforces the idea mentioned in the previous column, that a wayward child's main need is often for encouragement and trust rather than punitive measures.

My conclusion is that anyone who wants to make such a stipulation in a will should be careful to make sure the conditions are both created and worded in a positive, educational fashion -- not a punitive one. For example, the will could state that a certain sum will be inherited when the child reaches age 40. This is not in itself a punitive clause, and can easily be construed as being in the best interests of the child, to make sure the money is not squandered. This clause could then be sweetened by one stating that due to the special needs of a Jewish family, if the child marries in, then even more money will be given at the time of marriage, and that additional sums will be given at the birth of each child, to cover expenses.

A similar clause could be used for a parent who wants a child to go to college. Disinheriting a child because they choose a line of work different from what the parent wants is in my opinion inappropriate, and in any case is certain to create resentment. But if an inheritance is somewhat advanced or supplemented for college attendance in consideration of the added costs and foregone income, this is a reasonable and educational stipulation -- less likely to cause resentment, and more effective.

Interestingly, secular courts have applied a similar criterion. A man in Ohio stipulated that his son would inherit only if he married a Jewish lady within a certain number of years. When the son challenged, the court upheld the will; one contributing factor was the understanding that the clause was not meant to penalize the child for marrying out but rather was a positive stipulation by the father, who wanted to use his assets to encourage Jewish continuity. This intention was reinforced by the fact that in the case where the son would not marry in by the specified time, the father directed the bequest to the State of Israel. (3)

The paramount importance of the educational dimension in inheritance is found right in the paragraph we cited from the Shulchan Arukh. Right after the Shulchan Arukh explains that the court does not appoint a guardian to block the inheritance of a wayward child, he adds: "Even so, they should reprove him and educate him to go in a straight path and the ways of the righteous." This reinforces a central principle of Jewish thought: sanctions are not effective by themselves, but only as incentives in an idealistic educational program.

SOURCES: (1) Shulchan Arukh Choshen Mishpat 290:26 (2) Babylonian Talmud Moed Katan 17a (3) Shapira vs Union National Bank