Historically, the right of an individual to govern the distribution of his or her property at death was understood to be exclusively at the sufferance of the State: “[T]he dead hand rules succession only by sufferance. Nothing in the Federal Constitution forbids the legislature of a state to limit, condition, or even abolish the power of testamentary disposition over property within its jurisdiction.” Irving Trust Co. v. Day, 314 U.S. 556, 562 (1942).
In Hodel v. Irving, 481 U.S. 704 (1987), the Supreme Court altered this rule granting the government unfettered authority to regulate the laws of descent. Hodel involved the constitutionality of the Indian Land Consolidation Act – a law enacted by Congress to curb the fragmentation of the ownership of Indian lands. Over the years, shares of Indian land had been passed to individual heirs in such small fractions that, in some cases, the share of the rental income was less than one cent per month. The cost of bookkeeping was enormous given the extended partition of the land. Congress passed the Indian Land Consolidation Act to provide an escheat provision sending the property back to the tribe if the fractional share to be transmitted represented two percent or less of the total acreage of the tract and earned the owner less than $100 in the year preceding the year of the escheat. The escheat back to the Indian tribe was to be accomplished without payment to the individual land owner.
In Hodel, the Supreme Court held:
“There is no question, however, that the right to pass on valuable property unto one’s heirs is itself a valuable right…similarly, the regulation here amounts to virtually the abrogation to pass on a certain type of property – the small undivided interest – to one’s heirs…the fact that it may be possible for the owners of these interests to effectively control distribution upon death through complex inter vivos transactions such as revocable trusts, is simply not an adequate substitute for the rights taken, given the nature of the property…in holding that complete abolition of both descent and devise of a particular class of property may be a taking, we reaffirm the continuing vitality of the long line of cases recognizing the States’, and where appropriate, the United States’ broad authority to adjust the rules governing the descent and devise of property without implicating the guarantees of the Just Compensation Clause (citations omitted). The difference in this case is the fact that both descent and devise are completely abolished: indeed they are abolished even in circumstances when the governmental purpose sought to be advanced, consolidation of the ownership of Indian lands, does not conflict with the further descent of the property.”
481 U.S. at 718. Hodel v. Irving thus adds the right to transmit property at death to the bundle of rights regulating property.
One commentator illustrates the issue of testamentary freedom with Shapira v. Union National Bank, 315 N.E. 2nd 825 (1974). Jesse Dukeminier and Stanley Johanson, Wills, Trusts, and Estates (6th ed. 1999). In that case, Dr. David Shapira left a will providing that his son, Daniel, would receive his bequest only if Daniel married a Jewish woman within seven years of Dr. Shapira’s death. If Daniel remained unmarried for the seven years, or if he married a non-Jewish woman, then his share of the estate would go to the state of Israel. After Dr. Shapira’s death Daniel brought suit arguing that his father’s restrictions violated his constitutional right to marry protected by the Fourteenth Amendment of the Constitution. The constitutional protection extends to the enforcement by state judicial proceedings of private restrictions that would be prohibited if done by a state legislature. Daniel argued that his father’s restriction on Daniel’s constitutional right to marry could only be enforced by the state courts and was therefore unconstitutional.
In Shapira, the Ohio Supreme Court held that the right to receive property by will is a creature of law and not a right guaranteed or protected by either the Ohio or the U.S. Constitution. The Ohio Supreme Court examined cases in other jurisdictions to the same effect. One case was an early Virginia case, Maddox v. Maddox, 52 Va. 11 Grattan’s 804 (1854), where the testator left property to his niece if she married a member of the Society of Friends. When the niece arrived at marriageable age there were only five or six unmarried men of the Society in her community. She married a non-member and lost her membership in the Society of Friends. Virginia’s Supreme Court of Appeals Court (now the Virginia Supreme Court) held the condition to be an unreasonable restraint on marriage and therefore void. Because there was no gift over on the breach of the condition, the condition was held in terrorem. The Ohio Supreme Court distinguished Maddox because Dr. Shapira left a gift over to the state of Israel. In addition, the Ohio Supreme Court took judicial notice of the fact that although the Jewish community was small in Daniel’s hometown it was an “important segment” of the local population. Additionally, due to the ease of modern travel and long-distance communication, Daniel was not unreasonably restrained from finding a marriage partner who fit his father’s requirement. Ohio thus upheld Dr. Shapira’s right to transmit his property as he wished.
Similarly, Restatement (Second) of Property: Donative Transfers § 6.2 (1983) provides that a restraint to induce a person to marry is valid if the restraint does not unreasonably limit the transferee’s opportunity to marry. The likelihood of marriage is a factual issue to be determined by the circumstances of each particular case.
Other types of restrictions are not upheld. For example, a provision that would only be operative if someone becomes divorced is generally unenforceable as against public policy. Another example is illustrated in Gigardi Trust Co. v. Schmitz, 20 A.2d 21 (N.J. Eq. 1941), which invalidated a condition prohibiting the donees from communicating with a disfavored family member. The Maryland Court of Appeals reasoned that allowing such a condition would be against public policy; the condition encouraged a breach of the peace and harmony of families and the society at large.
Judge Richard Posner, a leading proponent of analyzing law with regard to the economic efficiency effect of decisions, criticized the Shapira case as illustrating the shortcomings of the traditional judicial approaches to such cases. Under the traditional approach, a court would simply enforce or refuse to enforce the condition based on a “reasonableness” standard. Judge Posner explained this approach as “wholly devoid of an economic foundation”:
“Consider, however, the possibilities for modification that would exist if the gift was inter vivos rather than testamentary. As the deadline approached, the son might come to his father and persuade him that a diligent search that revealed no marriagable Jewish girl who would accept him. The father might be persuaded to grant an extension or otherwise relax the condition. But if he is dead, the kind of ‘recontracting’ is impossible, and the presumption that the condition is a reasonable one fails. This argues for applying the cy pres approach in private as well as charitable trust cases unless the testator expressly rejects a power of judicial modification.”
Richard A. Posner, Economic Analysis of Law § 18.6 (5th ed. 1998), quoted in Dukeminier, supra, at 34. This type of private cy pres doctrine would not be applicable in Shapira. In Shapira there was a gift over to the State of Israel if Dr. Shapiro did not marry according to the terms of the will. Generally, the gift over precludes a court from rewriting the terms of a trust under a cy pres doctrine. Maryland law sets forth the general cy pres doctrine:
“If a trust for charity is or becomes illegal, or impossible or impracticable of enforcement…and if the settlor or testator manifested a general intention to devote the property to charity, a court of equity…may order an administration of the trust, devise or bequest as nearly as possible to fulfill the general charitable intention of the settlor or testator.”
Md. Code Ann., Est. & Trusts § 14-302(a) (LexisNexis 2006). The key to the application of cy pres is whether a settlor or testator had manifested a “general intention to devote the property to charity.” The absence of a gift over is an indication of such a general charitable intent. Miller v. Mercantile Safe Deposit & Trust, 224 Md 380, 168 A.2d 184 (1961). More recently the Maryland Court of Appeals looked at this issue in Home for Incurables of Balt. City v. Univ. of Md. Med. System Corp., 369 Md. 67, 797 A.2d 746 (2002). In that case the court declined to apply the cy pres doctrine and, rather than invalidate the gift with an illegal condition, excised the illegal condition from the gift. This analysis was exactly what Daniel sought in Shapiro.