Leslie-Spring 2002 Trusts and Estates Outline

Leslie-Spring 2002 Trusts and Estates Outline - Elan...

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Elan Weinreb –Trusts and Estates Outline – Page 1 of 136 Elan Weinreb January 15, 2002 Trusts and Estates – Leslie Trusts and Estates Outline The exam: The exam will be typical essay questions. The exam comes for the most part from the class notes. Hypos that we’ve done in class are very likely to reappear. I. Foundations of Trusts and Estates – A. Introduction – 1. Suppose that you are members of the House of Representatives. There’s a bill that provides: The abolishment of inheritance shall be had. You can earn money and property during life, but during death, whatever you have, goes to the government. Rationale: We have a deficit that we have to fix and have to finance homeland security. Instead of taxing people, we kill inheritances. Another reason: This country is supposed to be a meritocracy. We get where we are by virtue of hard work. Why should some people be privileged, not because they worked hard, not because they educated themselves, but because they were born into wealth? Equity principles dictate that we abolish inheritances. In addition, elderly people now can give wealth away in advance through contract. 2. Know this: In this country, people have the power to completely disinherit their children. There is no guarantee of inheritance by law. 3. Reasons against: 1) There is something integral to owning property – There are guaranteed individual rights to property. But what is the effect of a large gift on the next generation? 2) No incentive to work – Inheritance encourages productivity. But is inheritance the only reason why people want to make money? No. People want power, enjoyment, a retirement nest egg, etc. But what about the opportunity to give to mankind? 3) People want to manipulate their kids from the grave – But do we want to encourage this? Do we want to encourage manipulation? 4) Killing inheritance does not support meritocracy if people can still give away their property during their lives. Richer people may give away more,
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Elan Weinreb –Trusts and Estates Outline – Page 2 of 136 and middle class people may have more of their property going to the government. 5) When we talk about minor children, the rule makes no sense. What about a woman who dies with minor children, and the husband is left with no money to take care of the kids?! 4. The arguments for inheritance are primarily instrumental arguments – Arguments about people will behave or people would do. We need inheritance because we are concerned about the effect of the rule of law on human behavior. These arguments include the incentive argument above, the fact that people won’t be able to manipulate their kids, etc. – The problems with these arguments is that there is not only one or two reasons to justify inheritance on instrumental grounds. The facts are that people earn money for a multitude of reasons. Nevertheless, people feel that inheritance is part and parcel of an intrinsic property right. Note that in the former Soviet Union, there was a concept of inheritance. 5.
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Leslie-Spring 2002 Trusts and Estates Outline - Elan...

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