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Abstract:
This essay, written for the Encyclopedia of Legal History, summarizes and examines the history of inheritance law in the United States, from colonial times to the present day. The essay suggests that while British statutory and common law was the main source of American inheritance law - as one would expect in British colonies, inhabited by English settlers - American lawmakers began to go their own way in some respects from the very beginning, deviating from British rules of probate jurisdiction, intestacy, and will formalization and substituting rules that better suited colonial conditions. The American Revolution freed Americans to deviate as widely as they wished from British law. Still, following a burst of inheritance legislation inspired by republican values, such as the abolition of entails, the law in this area changed only gradually and in relatively small ways over the course of United States history. Although increased protection from disinheritance for a surviving spouse represents one abiding theme, American inheritance law has always been, and remains, marked by a robust freedom of testation that distinguishes our law from that of modern Britain and other countries in the western world.

Abstract:
This Article applies the theory of bounded rationality developed within cognitive psychology to the lawmaking process. The Article posits that because (by hypothesis) human beings possess scarce cognitive resources, lawmakers - including appellate judges, legislators, Commissioners, and Restators - must construct legal rules in a cognitively frugal manner. The Article goes on to explore how various mental strategies for conserving cognitive resources - selective search, settling for satisfactory (rather than optimal) choice, attention rationing, and rules of thumb (or heuristics) that simplify cognitive tasks - affect the structure and interrelationship of rules within our legal landscape. The Article argues that such phenomena as structural inconsistency between rules, exceptions to rules, legal obsolescence, and the slipshodness of minor rules all trace to the bounded rationality of their authors.

The Article proceeds to consider whether lawmakers' behavioral adaptations to bounded rationality are optimal (or meta-rational) and suggests reasons associated with attention theory to fear that those adaptations are in fact suboptimal. The Article concludes by contemplating what steps lawmakers might take either to enhance the quality of rules or, in the alternative, to adjust their norms and process to reflect lawmakers' own mental deficits.

Abstract:
This comment critically examines evolutionary models of the common law in the light of behavioral theory. To the extent that the common law assumes the characteristics that judges strive to impart upon it, their efforts are doomed to succeed imperfectly, as a consequence of judges' bounded rationality. On the other hand, several different but related models of common law dynamics posit that judge-made law tends ineluctably in the direction of economic efficiency as a consequence of blind, evolutionary mechanisms operating independently of judges' predilections. Hence, evolutionary models suggest the possibility that over time, the process of lawmaking can transcend the bounded rationality of lawmakers and achieve a degree of efficiency that advertent efforts of design could not.

Nevertheless, this comment concludes that evolutionary models of common law dynamics offer no escape from the bottleneck of bounded rationality. Although the states of minds of judges are irrelevant to those models, they depend instead upon the assumption that other participants in the judicial process - litigants and their attorneys - are rational decision-makers. When we assume instead that litigants and attorneys are susceptible to the same cognitive frailties that human beings generally share, the models break down, or at least become adulterated by noise that weakens the evolutionary pressures that they hypothesize.

The difficulties with those models do not disappear even when we relax the assumption that the common-law system within which rules are formulated is fixed in its present structure. A historical alternative to the current structure that one scholar has hypothesized to have been particularly productive of efficient rules is in fact degraded by the same cognitive frailties. Nor can we predict that meta-evolutionary processes of competition between legal systems will lead the principles of jurisprudence in the direction of a system most likely to generate efficient rules.

Abstract:
This article addresses the rise and gradual diversification of state statutes permitting settlors to self-settle trusts that avoid claims by their own creditors (known generically as asset protection trusts). The article argues that, whatever the motives underlying their authorization, asset protection trusts are unobjectionable, and even potentially beneficial, as a matter of public policy, at least to the extent that they affect the rights of voluntary (contract) creditors. The same can be said of revocable asset protection trusts, a new type of vehicle permissible since 2004 under one state statute. On the other hand, statutory provisions shielding the corpus of an asset protection trust from the claims of involuntary creditors (tort claimants, alimony creditors, etc.) raise a different set of concerns and merit revision on policy grounds. Unless efforts to revise the relevant statutes are undertaken in a broader legal context, however, so that they encompass all sorts of asset protection strategies, those efforts would prove counter-productive. A second section of the article analyses the problem of asset protection trusts in a bankruptcy proceeding. Like other forms of spendthrift trust, asset protection trusts should remain impervious to creditors' claims in bankruptcy, but as a matter of discharge policy ought to be made subject to the new means test regulating eligibility for bankruptcy relief. Ensuring that this occurs in all cases will require tweaking the language of the Bankruptcy Code as revised in 2005.

Abstract:
This article illuminates a glitch in the Uniform Disclaimer of Property Interests Act of 1999 (UDPIA) which allows persons to disclaim not only inheritances but, in one special circumstance, part of their own, preexisting ownership interest in property. The article suggests a strategy whereby an insolvent debtor can exploit this glitch to put property out of the reach of creditors and thereby to employ disclaimer law to effect what would otherwise constitute a per se fraudulent conveyance. In the process, the article analyzes the legislative history of UDPIA to show how the glitch found its way into this Uniform Act and also offers a novel analysis of the legality of insolvent disclaimer generally under the text of UDPIA. Further sections of the article weigh the advantages and shortcomings of the proposed asset protection strategy in comparison to alternative ones already in use, including analysis of the availability of the strategy to debtors who do not themselves reside in a UDPIA jurisdiction and the viability of the strategy for debtors who enter a bankruptcy proceeding.

Abstract:
Jurisprudence distinguishes between mandatory rules (which parties are obliged to follow, and hence which apply in all cases) and default rules (which parties are free to override, and hence which apply only in the event that parties fail to opt out of them). This article develops a theoretical framework for the construction of default rules within inheritance law. Its foundational claim is that the modern theory of default rules developed within transactional law provides a model broadly, if not perfectly, applicable to inheritance defaults. Transactional default rule theory suggests that by replicating the hypothetical bargain of a majority of parties, lawmakers can minimize transaction costs. If default rules in inheritance law correspond, by analogy, with the probable intent of a majority (or plurality) of benefactors, lawmakers can achieve the same efficiency. The article looks at, and rejects, other suggested approaches to the formulation of inheritance defaults, which have focused on furthering state interests or on fulfilling an expressive function of law. After setting out a basic theory of inheritance defaults, and comparing it to competitors, the article proceeds to address how inheritance defaults should be structured, and how lawmakers should go about discovering benefactors' probable intent. A final section surveys existing inheritance defaults, identifying ones that surely or likely fail to effectuate probable intent, and hence which merit substantive revision.

Abstract:
Perceptions of proximity matter to people. When something that harms them was nearly avoided, or when they narrowly escape being harmed by something, or when they almost acquire something they want, but nevertheless fail to do so, they tend to react more strongly than when a harm that befalls them was unavoidable or when a potential harm never came close to occurring, or when they miss getting the thing they want by a lot. In this article, we explore these psychological phenomena and their implications for legal policy and process. We begin by reviewing the existing literature on the psychology of proximity and proceed to consider the implications of that psychology for the law of torts and crimes (i.e., harms), and for the law of auctions and gambling (i.e., goods). We then turn to examples of the phenomena produced by law itself - that is, to near misses of legality. Here we address how lawmakers could mitigate the frustrations of near misses by structuring law, and the manner in which legal judgments are issued, differently. In particular, we will focus on the implications of the psychology of proximity for the rules-standards debate and assess the virtues of substantial compliance doctrines in that context, a form of legal structure that has received insufficient attention in the course of that debate. Our ultimate conclusion is that lawmakers should take the psychology of proximity into consideration when they make policy choices, but in so doing lawmakers need to bear in mind the potential functionality of that psychology. Near miss experiences can be painful but simultaneously educational, stirring behavioral adjustments in those who endure them.

Abstract:
This article addresses the problem of doctrinal change. More specifically, the article explores the question of how the existence of a pyramidal legal system -- lower courts below appellate ones, below a legislative body at the pinnacle -- affects the process, and even the course, of the evolution of legal doctrines.

We are used to thinking of the mechanism of doctrinal change as a simple process of overruling (or modifying), or of superseding by statute, rules previously in force. And so it is, when a lawmaking body engineering a change-of-law decides to revise its own rule, or the rule of a subordinate lawmaking body. On the other hand, when the acting lawmaking body confronts a rule previously established by a superior lawmaker, but which the subordinate body deems nonetheless to be obsolescent, the mechanism of overruling is unavailable. Subordinate lawmakers must instead choose among a number of less simple, but more interesting, options.

One option is for the subordinate lawmaker to continue to apply the superior rule and to await its reconsideration by higher authorities. Typically in such a case, the subordinate endeavors to signal to higher authorities its dissatisfaction with the rule at issue. At the other extreme, the subordinate lawmaker may undertake to revise the rule surreptitiously, by construing it to mean something different from its previous interpretation. Finally, the subordinate lawmaker may endeavor neither to apply nor to reformulate the rule, but rather to circumvent the rule. In that case, the lawmaker seeks to develop some other rule over which it does hold sway in a manner serving to avoid or to neutralize the troublesome superior rule which the lawmaker continues formally to observe.

The article probes this trio of alternative moves, with particular emphasis on the third one, which has received insufficient attention in the jurisprudential literature. The article highlights the structural earmarks of rules-circumventing-superior-rules, as well as their structural ramifications. And the article considers the dilemma faced by a subordinate lawmaker: To wit, which of the three options at its practical disposal constitutes the most effective response to legal obsolescence?

Inheritance law provides a case study of this problem.

Abstract:
Events may occur after a will is executed that ordinarily give rise to changes of intent regarding the estate plan - yet the testator may take no action to revoke or amend the original will. Should such a will be given literal effect? When, if ever, should lawmakers intervene to update a will on the testator's behalf?

This is the problem of testamentary obsolescence. It reflects a fundamental, structural problem in law that can also crop up with regard to statutes, contracts, and other performative texts, any one of which may become timeworn. This article develops a theoretical framework for determining when lawmakers should - and should not - step in to revise wills that testators have left unaltered, and to locate this framework in the context of other forms of textual obsolescence. The article focuses on a variable I call friction - i.e., the extent of difficulty text makers face in revising texts on their own. Some changed circumstances display the interesting quality of altering testamentary intent while simultaneously disabling the testator from executing a new estate plan. In such instances, legal intervention to effectuate intent is warranted. Where the testator remains in a position to amend a will following a change of circumstance, the case for legal intervention becomes uneasy. Nevertheless, lesser forms of friction may continue to operate, affording testators less practical opportunity to redo their wills, and hence again giving cause for interpreting wills dynamically.

When lawmakers do act to update a will, they should ordinarily do so on the basis of the testator's probable intent. Yet, I also argue that in some instances lawmakers do better to follow the testator's probable assumptions about what rule governs will interpretation, even if that rule fails to match most testators' preferences. I call this an error-minimizing default. In the Appendix, I show that under some conditions an error-minimizing default is more efficient than a majoritarian default, a contribution to default rule theory.

wills, estates, inheritance, construction, interpretation, originalism, default rules

Abstract:
The article critiques the new Uniform Disclaimer of Property Interests Act of 1999. This Uniform Act -- due soon to be grafted into the Uniform Probate Code -- provides a legal framework for the rejection (or "disclaimer") of a gratuitous transfer by a beneficiary. The article identifies a host of technical glitches and doubtful policy choices made by drafters of the Act; the article also offers an original analysis of all of the principal policy issues surrounding the law of disclaimer. Finally, the conclusion of the article offers suggestions for reform of the law-modelling process by the National Conference of Commissioners in order to avoid structural difficulties with Uniform Acts that have arisen before and that crop up again in connection with the Act under consideration here.

Abstract:
The paper follows up on a previous article by the authors which had proposed a series of revisions in the Uniform Disclaimer of Property Interests Act of 1999. That previous article has prompted counter-proposals by both the Joint Editorial Board of the Uniform Probate Code and by the American Law Institute drafting the Restatement (Third) of Trusts with respect to (1) the devolution of disclaimed interests, and (2) the power of a trustee to disclaim an interest in trust property. The present paper examines these counter-proposals and also criticizes recent decisional law concerning the power to disclaim following partial acceptance of inherited property. The paper concludes that several additional amendments to the Uniform Act and other non-Uniform disclaimer statutes merit consideration.

Abstract:
Persons who inherit property have the right to refuse (or "disclaim") their inheritances under state law. All fifty states now have disclaimer statutes regulating the right of disclaimer, although many of these statutes have grown antiquated. In 1999, NCCUSL promulgated the Uniform Disclaimer of Property Interests Act to promote disclaimer reform. Thus far, the Act has been adopted by eight jurisdictions, and in 2001 it was grafted verbatim into the Uniform Probate Code. We argue that the Act, although helpful in many respects, remains far from flawless: At a substantive level, the Act makes a number policy misjudgments. And at a technical level, the Act is peppered with glitches, ambiguities, gaps, and even constitutional uncertainties that are bound to produce litigation, if left uncorrected. In response, we propose a series of amendments to the official text of the Act designed both to improve upon its substance and to smooth out its technical wrinkles. We offer these amendments for consideration either by NCCUSL itself, or by drafting committees in the individual states that now or in the future contemplate enactment of this NCCUSL product. We also include extensive explanatory comments showing how and why each of our proposed amendments would ameliorate the Act and thereby advance the cause of disclaimer reform.

Abstract:
This article assesses amendments made to the Uniform Disclaimer of Property Interests Act (UDPIA) in 2006. The article argues that these amendments - which are confined to a single provision of UDPIA concerning the devolution of a disclaimed interest in a remainder, or in a living trust - suffice to cure a glitch in UDPIA. Nevertheless, the solution lighted on by the drafters of the amendment is sub-optimal, in that it contradicts the probable intent of the benefactor in some instances and creates an asymmetry between the devolution of disclaimed property under a will and a living trust, even when the two are functionally indistinguishable.

This article also argues that the 2006 amendments are too limited. They leave untouched sections of UDPIA that call for reform, either because they are constitutionally suspect or because they endanger the effectiveness of disclaimers for tax purposes under the Internal Revenue Code. The article explores how UDPIA's transitional rule, its safe-harbor for disclaimers that satisfy the IRC, and its provision giving effect to both statutory and common law disclaimers raise either one or both of these potential objections. Finally, and perhaps most disturbingly, UDPIA's provision covering disclaimers of joint interests in property creates a loophole in fraudulent conveyance law that asset protection planners can exploit to protect wealthy individuals who face large malpractice or other liabilities.

The article urges the drafters of UDPIA to revisit these concerns and, if necessary, urges local drafting committees to address them independently. Since most of the states that have adopted UDPIA thus far have already tinkered with it in substantive ways, further tinkering will conform with the existing pattern of enactment of this Uniform Act.

disclaimer

Abstract:
Whereas benefactors typically create trusts that provide for one or more individuals, some instead create trusts to accomplish or to promote purposes. Historically, trust law divided purpose trusts into a trio of categories, based on the sort of purpose the benefactor had in mind. Trusts for harmful or capricious purposes were void per se as contrary to public policy. Trusts for purposes beneficial to society were given effect in perpetuity as charitable trusts. Trusts for purposes neither harmful nor affirmatively useful - such as those to care for a grave or a pet animal - were not enforced as full-fledged trusts, but the intended trustee nevertheless had a power to carry them out, only within the period of the rule against perpetuities, as "honorary trusts." Statutory rules in many jurisdictions have tinkered with this framework, by making trusts for some or all noncharitable purposes fully enforceable, while continuing to limit their duration, depending on the purpose. New legislation in Delaware is still more innovative. The new Delaware statutes pare back the category of purposes contrary to public policy, while effectively amalgamating charitable and noncharitable purposes into a single category. Under the new legislation, trusts in Delaware can serve any purpose that is not genuinely harmful, and may do so in perpetuity, applying subsidiary rules that have traditionally been confined to charitable trusts. This Article details and critiques Delware's latest trust initiative, exploring the legislation's technical strengths and weaknesses, while also examining the legislation within the context of trust policy, and within the context of inter-jurisdictional competition for trust business.

Delaware, trusts, charitable, noncharitable, honorary, perpetuities, cy pres

Abstract:
The Uniform Disclaimer of Property Interests Act of 2000 (UDPIA) offers a Uniform law to define the rights of a beneficiary to reject (or disclaim) an inheritance. In prior articles, I have criticized various provisions of UDPIA on policy grounds. The present article identifies a number of instances where the Act fails to operate as it was intended to do. The legislative history of UDPIA reveals that as concerns (1) the formal requirements for executing a disclaimer, (2) the time limit for disclaiming, (3) the treatment of disclaimers of joint interests, (4) the right of an insolvent beneficiary to disclaim, and (5) the right of a beneficiary to disclaim following a judicial sale of inherited property, the drafters of the Act contemplated that it would operate differently from the way it actually does. The legislative history further suggests that the drafters' failure accurately to interpret the consequences of their own work product stemmed from time pressure, coupled with the complexity of the enterprise. But the upshot is that the plenary body of NCCUSL, voting to promulgate the Act, and local drafting committees, voting to adopt it, have relied on presentations and comments prepared by the drafting committee that misstate UDPIA's operation and thereby misled the Act's various electorates.

disclaimer, inheritance, bequest, unintended consequences