Enforcing Trusts That Exclude Family Members Who Marry Non-Jews:

Max Feinberg's will provided that all his property would go into a trust. During his wife Erla's life, she'd get income from the trust. When she died, the property would go to their descendants, but providing that any descendant who married a non-Jew, and whose spouse didn't then convert to Judaism within a year of the marriage, would be "deemed deceased" and would forfeit the share. Erla also had a "power of appointment" under which she could reassign which descendants could benefit from the trust. Erla exercised this power precisely the way that Max provided in his will — by disinheriting the four or out of five grandchildren who married non-Jews.

A complicated decision today from the Illinois Supreme Court, in In re Feinberg, upheld the validity of Erla's decision, but left open the broader question whether Max's wishes could have been enforced in the absence of the power of appointment exercised by Erla:

[T]his is not a case in which a donee, like the nephew in the illustration, will retain benefits under a trust only so long as he continues to comply with the wishes of a deceased donor. As such, there is no “dead hand” control or attempt to control the future conduct of the potential beneficiaries. Whatever the effect of Max’s original trust provision might have been, Erla did not impose a condition intended to control future decisions of their grandchildren regarding marriage or the practice of Judaism; rather, she made a bequest to reward, at the time of her death, those grandchildren whose lives most closely embraced the values she and Max cherished.

Still, the decision had some interesting language that might be relevant more broadly:

Michele argues that the beneficiary restriction clause discourages lawful marriage and interferes with the fundamental right to marry, which is protected by the constitution. She also invokes the constitution in support of her assertion that issues of race, religion, and marriage have special status because of their constitutional dimensions, particularly in light of the constitutional values of personal autonomy and privacy.

Because a testator or the settlor of a trust is not a state actor, there are no constitutional dimensions to his choice of beneficiaries. Equal protection does not require that all children be treated equally; due process does not require notice of conditions precedent to potential beneficiaries; and the free exercise clause does not require a grandparent to treat grandchildren who reject his religious beliefs and customs in the same manner as he treats those who conform to his traditions.

Thus, Michele’s reliance on Shelley v. Kraemer (1948), is entirely misplaced. In Shelley, the Supreme Court held that the use of the state’s judicial process to obtain enforcement of a racially restrictive covenant was state action, violating the equal protection clause of the fourteenth amendment. This court, however, has been reluctant to base a finding of state action “on the mere fact that a state court is the forum for the dispute.” Indeed, Shelley has been widely criticized for a finding of state action that was not “‘supported by any reasoning which would suggest that “state action” is a meaningful requirement rather than a nearly empty or at least extraordinarily malleable formality.’” Adoption of K.L.P., 198 Ill. 2d at 465, quoting L. Tribe, American Constitutional Law 1698 (2d ed. 1988).

The court reversed a 2-1 appellate court decision to the contrary, which I blogged about last year. Thanks to How Appealing for the pointer.