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Jaspers, Moriarty & Wetherille, P.A.
Seasoned Legal Judgment For The South Metro Area

February 2014 Archives

Better Estate Planning through Downton Abbey Pt. 2

Make a Strong Devise“Downton Abbey” and Pride and Prejudice each are stories besieged by the perils of a now-abolished type of gift in land called the fee tail. A fee tail is created by making a gift of land “to John Doe and the heirs of his body.” This creates a dynamic where the current holder of land only has a life estate – the ability to control the land and its income for their lifetime but has no ability to sell the underlying land itself – and then at that person’s death decedents inherit the land for their lifetime. The design of this model was to keep large estates in the primary line of succession. As is obvious in both “Downton Abbey” and Pride and Prejudice, the livelihood of a family with only daughters is imperiled if their father dies without a male heir – the land and home of the spouse and daughters can be lost to a distant relative, leaving the female members of the family without a place to live or income to live on.

Today fee tails are abolished almost everywhere because of this exact problem. However, people continue to make weak distributions of their property which have similar unfortunate effects. Giving someone a life estate only prevents that person from selling the property – if they don’t want to live on the land, this devise is essentially a gift of real estate taxes. Other times people make gifts of a fraction of an estate – to each of 7 brothers and sisters equally. Because each new owner only has a 1/7 interest, their ability to control the property is extremely limited. Fractured estates with mineral rights in the West have been such a problem that laws were enacted to determine how such fractured interests would be controlled, resulting in meetings like shareholder meetings of a Fortune 500 company to vote on how to act. Instead of these types of gifts, we often advise people to make a “gift in fee” or each piece of property to one or two people, and then another piece of property to someone else, rather than making all the property subject to small fractional ownership shares. Alternatively, the entire decedents estate could be left to a trustee to manage for the benefit of many owners – that trustee could then sell or keep properties, or sell property to one of the beneficiaries giving the cash to the other beneficiaries.

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