In Re Estate of Feinberg
235 Ill. 2d 256, 919 N.E.2d 888 (2009)
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Rule of Law:
A trust provision conditioning a bequest on a beneficiary's marital choice regarding religious faith is not void as against public policy if it operates as a condition precedent that is fixed at a specific time, and does not seek to divest a previously vested interest.
Facts:
- Before his death in 1986, Max Feinberg created a trust providing a life estate for his wife, Erla.
- The trust contained a 'beneficiary restriction clause' stating that any descendant who married outside the Jewish faith, or whose non-Jewish spouse did not convert to Judaism within one year, would be 'deemed deceased' for purposes of inheritance.
- Max granted Erla a limited power of appointment, allowing her to alter the distribution of the trust's assets among his descendants after her death.
- In 1997, Erla exercised this power, directing that upon her death, a one-time payment of $250,000 be made to each of her then-living grandchildren who were not 'deemed deceased' under Max's beneficiary restriction clause.
- Erla died in 2003.
- At the time of Erla's death, all five grandchildren had been married for more than one year.
- Four of the five grandchildren had married outside the Jewish faith and their spouses had not converted, thus not meeting the conditions of the beneficiary restriction clause.
- Only one grandchild, Jon, was eligible to receive the $250,000 distribution under the terms set by Max and implemented by Erla.
Procedural Posture:
- Michele Trull, one of the grandchildren rendered ineligible by the trust provision, challenged the clause in the circuit court of Cook County.
- The trial court invalidated the beneficiary restriction clause, finding it unenforceable on public policy grounds.
- Michael Feinberg, as coexecutor of the estate and appellant, appealed the decision to the Illinois Appellate Court.
- A divided panel of the appellate court affirmed the trial court's judgment.
- Michael Feinberg then appealed to the Supreme Court of Illinois, which granted his petition for leave to appeal. Michele Trull is the appellee.
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Issue:
Does a trust provision, as given effect by a power of appointment, violate the public policy of Illinois if it directs a one-time distribution of assets upon death only to those descendants who have not married outside a specific religious faith?
Opinions:
Majority - Justice Garman
No. A trust provision that directs assets to be distributed at the time of death only to descendants who have not married outside a specific religious faith does not violate public policy when it acts as a condition precedent. The court reasoned that Illinois has a strong public policy favoring freedom of testation, allowing individuals to dispose of their property as they see fit, with very few limitations. The critical distinction in this case is that the beneficiary restriction clause, as implemented by Erla's power of appointment, created a condition precedent, not a condition subsequent. The grandchildren had no vested interest in the trust assets; they had only a mere expectancy. Their eligibility was determined at a single point in time—the moment of Erla's death. Unlike prior cases that invalidated provisions encouraging divorce or divesting an existing interest, this clause did not exert ongoing 'dead hand' control over the grandchildren's future conduct or disrupt existing marriages. Instead, it was a one-time determination of eligibility for a bequest, which is a permissible exercise of the settlor's freedom of testation.
Analysis:
This decision reinforces the strong presumption of testamentary freedom in Illinois and clarifies the distinction between valid and invalid restraints on marriage in wills and trusts. By focusing on the condition precedent versus condition subsequent dichotomy, the court provides a clear framework for estate planners. The ruling suggests that 'incentive' provisions tied to a beneficiary's personal life choices are likely to be upheld so long as they do not divest a previously vested right and are fixed at the time of distribution, rather than operating as an ongoing tool to control a beneficiary's behavior. This case narrows the public policy exception, making it more difficult to challenge such clauses unless they directly encourage divorce or seek to terminate a vested property interest.
