Problems With The Fineberg Decision: The Law of Unintended Consequences

The Illinois Supreme Court's recent decision, In Re Fineberg, seems to uphold the ability of testators (people transferring property through a will or trust) to base the distribution of assets on the religious practices of their beneficiaries. The Fineberg case involved a Jewish couple (the Finebergs) with an estate plan that placed their assets in trust and provided for distribution to their descendants. However, the trust instrument provided that a descendant who married a non-Jewish spouse (that did not convert within a year of marriage) would not receive a share of the trust. Four of the five grandchildren married outside of the faith and were therefore disqualified under the testamentary scheme established by the Finebergs. Overruling the appellate court, the Illinois Supreme Court validated the disposition based upon the religion and seemed to hold that this type of estate planning does not violate public policy.

While, as an attorney, Fineberg provides a basis for me to create religiously-based estate plans, I must note that there are two major problems with the court's decision: (1) it lacks clarity that is bound to engender further litigation and (2) it creates a whole host of legal issues that probate courts in the future will have to resolve.

As to the first issue, the court, for no apparent reason, tells us that the decision is limited to the facts of the case (Mr. Fineberg's wife, after his death, exercised her "power of appointment" to modify the trust's distribution scheme, although she maintained the beneficiary restriction as to non-Jewish spouses). While it is generally sound judicial policy to decide no more of a controversy than is necessary, this factual distinction really seems irrelevant to the main issue: can a trust deny distribution based on the religious identity of the beneficiary's spouse? Either you can or you can not; whether it is done by a "power of appointment" or the original trust language is of no conceivable relevance. By qualifying the decision in this manner, the court pointlessly creates an invitation to further litigation on the issue.

However, it is the new legal problems created by the Fineberg decision that one must suspect will prove to be more problematic. Most importantly, the court does not give any guidance as to how a trial court is to identify whether a potential beneficiary is Jewish. Perhaps the Illinois Supreme Court thinks that this is a straightforward issue; if so, they do not know much about Jews. In the Fineberg case, the trust allowed a beneficiary to take a share, if the spouse converted to Judaism within a year of marriage. Great. What counts as conversion? Different movements in Judaism do not recognize the validity each other's conversion: one group will insist that the beit din of the group performing the conversion was improper and therefore invalidating its conversions. The orthodox will not recognize the converts to the reform movement; Chabad may or may not recognize... There is no need to belabor the point.

This leaves a trial court in the potential position of having to interpret religious law to determine whether someone is "of" a particular religion, by examining the beliefs and practices of that faith. American courts have long avoided performing this function under the "entanglement doctrine" whereby secular courts will not attempt to make ruling based on interpretations of religious law. See Gonzalez v. Archbishop, 280 U.S. 1, 16 (1929);see also, Seiger v. Union of Orthodox Rabbis, 767 N.Y.S.2d 180 (App. Div. 1st Dept. 2003). Alternatively, a trial court could attempt to determine the "religious intent" of the testator and hear evidence as to which stream of Judaism the testator would have considered authoritative on the issue. Although this would still force the court to consider issues of religious law, it would do so indirectly, perhaps through an expert witness (e.g. a rabbi) of a particular movement. All of these options are problematic and will force courts into the "forbidden process" of reviewing religious doctrine. Presbyterian Church, 393 U.S. 440, 451 (1968).

Additionally, even if the conversion is acceptable as far as halacha is concerned, what about conversions that are insincere? If a spouse should go through conversion and one month later there is no mezuzah on the door and pork roast is being served for dinner? While this is not an ordinary occurrence (I know many converts more observant than myself) it seems more likely when large sums of money are involved (in the Finberg case, each grandchild would have received 250K if they had a Jewish spouse). In the final analysis, promises made before a beit din are not legally binding and a mikvah cannot guarantee piety. One is bound to imagine that litigation will arise should a spouse go through a purely sham conversion just to obtain a testator's assets.

While these issues present real challenges, a testator wishing to make the distribution of assets contingent on whether a descendant upholds certain religious traditions may have options. The testator can have the trust document specify what constitutes membership in a particular religious group. Moreover, the trust could designate a religious authority, such as a particular beit din, as competent to resolve any questions of religious law that may arise, such as the validity of a marriage or whether a person is, or is not, Jewish. Another approach is to not completely cut out a non-compliant descendant and instead give him or her a reduced share. This cannot guarantee success, but it may create disincentives for people to engage in deceitful tactics. In the final analysis, careful drafting cannot eliminate all of the concerns created by Fineberg, but testators seeking to use that decision should be able to do so.