In the previous article, we discussed the importance for everyone to address the Halachic issues of estate planning. In this issue, we will discuss the background of the Torah's requirements for inheritance, Yerusha. Implementing these Halachot raise a number of issues. These issues, and a few of their possible solutions, are outlined below.
Torah Order of Succession
The Torah in Parshat Pinchas (Bemidbar 27:8-11) outlines the Halachic order of succession:
If a man dies and has no son, then you shall cause his inheritance to pass to his daughter. And if he has no daughter, then you shall give his inheritance to his brothers. And if he has no brothers, then you shall give his inheritance to his father's brothers. And if his father has no brothers then you shall give his inheritance to the relative who is closest to him of his family, and he shall inherit it....
The Torah concludes these Halachot: "...This shall be for the children of Israel as a decree of justice ((&8; /:5)), as Hashem commanded Moshe."
Understanding the Torah's Order of Yerusha
A number of points must be clarified regarding the Torah's order of Yerusha. The Mishna in Bava Batra (8:2) clarifies the Torah's order of inheritance by explaining that the lineal descendants of anyone with priority to succession take precedence. Thus, for example, the grandchild (son of a son) of the deceased has priority over the daughter of the deceased. So, if a man dies with no living son, then you before you pass his inheritance to his daughter, it must first pass to any deceased son's lineal male descendants, i.e., the grandsons or great-grandson's of the deceased.
Sons, as stated clearly in the Torah, have the first priority to inherit. If the decedent was not survived by any sons, then his daughters inherit all. The Mishna explains that the decedent's father is the third in the line of succession, after the decedent's sons and daughters, even though the father is not mentioned in Bemidbar. Thus, if the decedent was not survived by children, then his father inherits all. If the father is not alive, then the decedent's brothers inherit. If no brothers survive, then the relative who is closest to him inherits. (See Shulchan Aruch Choshen Mishpat 276 for a thorough description of the Torah's line of succession.)
The Special Status of the Firstborn (Bechor)
The Torah (Devarim 21:16-17) commands us to give a first born male a double portion of the estate. Thus, if the decedent was survived by five sons, then the Bechor receives two-sixths of the inheritance, and the other sons each receive one-sixth of the estate.
There are several important exceptions to this seemingly simple Halacha:
1. A son born by Caesarian section does not qualify for the double portion (Bechorot 8:9).
2. The Mishna (Bechorot 8:9) teaches that the Bechor is only entitled to receive a double share from the /&('8 portion of the estate, assets already held by the decedent, i.e. assets in his possession at the time of death. The Bechor does not receive a double portion from the 9!&* portion of the estate. These are contingent assets in which the decedent had a right at the time of death, but which were not actually held by him (for example an unpaid debt).
A full presentation of the details concerning the special entitlement of the Bechor appears in Shulchan Aruch Choshen Mishpat 277.
The husband is heir to his wife's estate and takes precedence over all other heirs. There is considerable debate whether this Halacha is a Torah law or a Rabbinical law. (See Rambam Hilchot Nachalot 1:8 and the comments of the Raavad, Maggid Mishna, and Kesef Mishna there.)
The wife, in contrast, does not inherit her husband's estate. She is merely entitled to be supported out of the husband's estate until she remarries or demands payment of her Ketuba (Ketubot 4:12). This obligation raises a number of issues. If ownership of assets immediately vests in the Halachic heirs as of the moment of death, from where is she paid? Do the commonly elder law, Medicaid, and nursing home planning in which many families engage violate this Halachic support obligation? Elderly parents may give away all of their assets so that state programs will pay nursing home bills and the assets may be preserved for their children. Since a husband's obligation to support his wife includes unlimited medical care, may he engage in this type of planning? Many of the documents (discussed below and in later articles) prepared to address the Yerusha issues make no mention of the support obligation a man has to his wife and daughters. These simple forms may violate this Halacha. What about the typical by-pass trust included in many wills to minimize federal estate tax? These trusts often make the surviving wife and children beneficiaries. This approach may facilitate meeting the husband's support obligation to his wife, but will it comply with the Yerusha requirements for distributions to male children? In part, the answer to this will depend on the Halachic standing of a trust. This important point, which may have much wider ramifications to those wishing to engage in halachic estate planning, will be discussed in later articles.
Although a daughter does not inherit if there are sons, each unmarried daughter is entitled to ten percent of the estate to be used for her dowry (Ketubot 6:6, Ketubot 68a, and Shulchan Aruch Even Haezer 113:1). Presumably, this distribution is to be determined net of any estate pays tax because of $*1! $/-,&;! $*1!, we are bound by the laws of the laws of the country we live in. Moreover, a daughter is to be supported by the estate until she is betrothed or reaches the age of Bat Mitzva (Ketubot 4:11). This obligation raises some of the same issues discussed above concerning the obligation to a wife.
Shtar Chatzi Zachar
The most common dispositive scheme is for children, sons and daughters, to share equally in the estate. How can one achieve this personal objective without violating the Halachic requirements of Yerusha? This cannot be accomplished by merely stipulating in one's will that he wants his daughters to inherit. The Halacha regards this as an invalid stipulation (Bava Batra 8:5). Although the Halacha follows the opinion of Rav Yehuda who validates monetary stipulations made in contradiction to Torah Law, stipulations made in contradiction to the laws of inheritance are invalid. The Rambam (Hilchot Nachalot 6:1) explains that this is that the Torah describes the laws of inheritance as (&8; /:5). This teaches that these rules are inviolate and stipulations cannot override them, unlike other Torah rules affecting monetary matters.
One method to distribute an inheritance to daughters is through a :)9 (7* ',9. The Rema (C.M. 281:7) records that this was the commonly accepted way to provide each daughter with a share in the estate. This involves the father undertaking to pay a daughter a very large sum of money, larger than the expected value of the estate, to become due ((-) one hour preceding the father's death. This debt passes to the Halachic heirs (i.e. the sons, although the concept could be extended to restructure any stages of the Torah order for Yerusha) and includes a provision voiding the debt if the Halachic heirs present the daughters with a share (e.g. one-half) of the inheritance.
This technique raises a number of issues. If the debt is made so large, the Shtar may be challenged as an Asmachta (having a condition which is known to have been made without the intent of fulfilling the obligation (see Bava Metzia 66a, 73b and Nedarim 27b). This risk is defeated by inserting an express statement to the contrary. What if someone seeks to enforce the note? There have, by example to a similar technique, been a number of secular court cases where litigants have endeavored to enforce a Heter Iska to enhance their returns. It may be Halachically feasible to name a charity, not a daughter, to minimize the risk of a daughter trying to enforce the Shtar.
Shtar Shalem Zachar
In addition to the Shtar Chatzi Zachar, there is another common approach. Rav Zalman Nechemia Goldberg notes (Techumin 4:344) that the Ketzot Hachoshen (33:3) refers to use of a Shtar Shalem Zachar, which facilitates daughters receiving a full share in the inheritance. Thus, one may legitimately use this mechanism to facilitate daughters receiving a full share in the inheritance.
What are the Actual Mechanics of Using the Shtar?
The actual sequence and mechanics of using the approach described above to distribute assets as one wishes while complying with Halacha appear to be as follows:
a) Father creates Shtar/debt to daughter for a dollar amount large enough that the son would clearly waive his inheritance under the Torah's Yerusha requirements in favor of the dispositive scheme under the secular will.
b) The Shtar, by its very terms, is void if the son consents to give daughter the amount provided under the secular will.
c) Because the Shtar/debt is a valid Halachic transfer, which was completed before death (before the Torah requirements of Yerusha apply), it is Halachically permissible without violating the Yerusha requirements.
d) Upon death, all of father's assets immediately vest in the son as required by Torah law. The daughter would then assert her rights under the Shtar/debt, but the son would obviously choose to have his sister receive the much lower amount in their father's secular will.
e) The recognition of the bequest under secular will makes the Shtar/debt void. This event would be made retroactive to the date of death, so as to avoid any issue of needing multiple transfers from the father, to the son, and then to the daughter. This might also eliminate any claim that the son has made a gift to the daughter. Halachic Yerusha requirements are complied with since: (i) the transfer of the Shtar to the daughter is a permissible pre-death transfer; (ii) the son actually received inheritance in accordance with Halacha (all of the father's assets, but subject to a valid Halachic debt); (iii) and the sons invalidated the claim under the Shtar, and against the estate inherited, in accordance with the contractual terms of the Shtar.
f) The daughter formally cancels the Shtar/debt. This last step is quite important, as to avoid a problem created under the terms of some of the forms used for the Shtar. These forms provide that the daughter can merely testify before a Beit Din to have the Shtar honored. Failing to cancel the Shtar could expose the son to a problem if his sister made a false claim.
Summary of Use of Shtar to Comply with Torah's Yerusha Requirements
The Shtar Chatzi Zachar is the subject of considerable discussion in the responsa (see Pitchei Teshuvah C.M. 281:8-13 for a summary of much of this literature). This constitutes strong historical evidence of its use. Unfortunately, today most religious Jews fail to address these important Halachot. Finally, the process of addressing Yerusha involves many unresolved issues as to the coordination of Halachic and secular legal concepts. Hopefully, this discussion will encourage more Baal Batim to address this important matter and stimulate a discussion of the issues, leading to greater guidance from Halachic authorities as to how we should all proceed.
Next week, God willing and Bli Neder, we will discuss the relationship between the Torah laws of inheritance and the Talmudic principle of $*1! $/-,&;! $*1!.