Estate planning changes. After centuries of stability, the law of succession has entered another period of remarkable ferment.
I’ve been practicing law for just under fifty years now. When I entered law school in the early 1970s, the law of wills, trusts and estate administration seemed almost timeless. We learned from Professors Van Slyke and Eckhardt about rules that had been handed down for generations. Some traced their origins to English statutes enacted during the reign of Henry VIII. Others—the infamous Rule Against Perpetuities comes immediately to mind—were centuries younger, but no less immutable.
An irrevocable trust was, by definition, irrevocable. That included being unamendable. A will had to satisfy exacting formalities. Property passed according to rules that seemed carved in stone.
Then the stone started moving.
Today we routinely modify irrevocable trusts. We reform them to correct mistakes. Perhaps we merge and divide them. We decant assets into new trusts. Maybe we appoint trust protectors. We debate whether an electronic signature—or even an unsigned electronic document—can satisfy the requirements for a valid will. Sometimes we create special needs trusts that preserve government benefits while dramatically improving quality of life.
Rules I learned as fixed have become, if not optional, at least surprisingly flexible.
It occurred to me recently that our profession has experienced another period like this before. But not in my lifetime, nor in the lifetime of any of the sages I learned from.
In Henry VIII’s time.
The last great period of change
The comparison isn’t nearly as far-fetched as it first sounds.
By the early sixteenth century, English landowners had become adept at using “uses”—the ancestors of today’s trusts—to avoid many of the feudal incidents that enriched the Crown when land changed hands at death. Henry VIII, never one to overlook a promising source of royal revenue, approved legislation intended to eliminate the practice.
The result was the Statute of Uses of 1536.
The idea seemed straightforward enough. If legal ownership and beneficial ownership were treated as one and the same, the “use” would disappear and the Crown’s revenues would be restored.
It didn’t work.
Lawyers immediately began looking for ways around the statute. Landowners objected. Political pressure mounted. The law governing the transfer of property at death—something that had seemed settled for generations—was suddenly in turmoil.
Only four years later Parliament adopted a remarkably different approach.
The Statute of Wills of 1540 did not invent wills. Englishmen had long been able to dispose of their personal property by testament. What the statute did do, however, was almost as revolutionary. It allowed English landowners, for the first time, to devise much of their real property by will rather than having title pass solely according to the rigid rules of feudal inheritance.
Within just a few years, English succession law had been fundamentally reshaped. Not just estate planning changes — it introduced much of what we now think of as estate planning.
Four centuries of stability
Then…things quieted down. For about 440 years.
Certainly there were important developments over those four centuries. The Rule Against Perpetuities arrived to torment generations of law students, tax law repeatedly reshaped planning strategies, and courts refined countless details. But the basic architecture of wills, trusts, and estate administration remained remarkably stable.
A lawyer transported from the seventeenth century to the middle of the twentieth would have found much that was familiar. The vocabulary changed little. The formalities remained recognizable. An irrevocable trust was irrevocable. A mistake in drafting usually remained a mistake. Courts generally enforced documents as they were written, not as the drafter wished they had been written.
The basic questions remained surprisingly constant.
Then, in what amounts to the span of a single professional career, everything started moving again.
A new time of estate planning changes
Beginning in the 1980s—and accelerating dramatically over the past quarter-century—we entered another remarkable period of innovation. Estate planning changes began to pile one upon another.
An early estate planning change: the very idea of a durable power of attorney. That seems perfectly mundane today, but it upended five centuries of thinking about the delegation of authority. And it led to not only financial but also health care powers of attorney — an idea unthinkable if powers of attorney expired with incapacity.
Beginning in the early 1980s, special needs trusts transformed planning for individuals with disabilities. Just two decades later the Uniform Trust Code encouraged legislatures to rethink long-established doctrines. Courts became increasingly willing to modify or reform irrevocable trusts in order to carry out a settlor’s intent. Decanting statutes spread across the country. Nonjudicial settlement agreements, virtual representation, directed trusts and trust protectors all became accepted parts of the estate planner’s vocabulary.
Even the ancient formalities surrounding wills began to soften. Electronic wills, remote witnessing, harmless-error statutes and electronic signatures have challenged assumptions that had survived since Tudor England. And I can recall when the idea that witnesses to a will could sign at different times was an early one of a set of profound and simple estate planning changes.
The common thread is not simply that estate planning changes continue to occur. It is that certainty itself has become less certain.
When I entered practice, lawyers were trained to think primarily in terms of rules. Increasingly, we think in terms of intent. Instead of asking only whether every formality was observed, courts often ask whether the decedent intended this document to be a will. Instead of assuming that an irrevocable trust must remain exactly as drafted, we ask whether modification better accomplishes the settlor’s purpose. That’s a profound philosophical shift.
What Henry VIII Might Recognize
If Henry VIII somehow walked into my office today, I suspect we’d find plenty to disagree about.
Hal (would he be OK with the familiar?) might express astonishment that trusts have survived nearly five centuries beyond his attempt to eliminate them. Of course the very idea of electronic wills would flummox him. And special needs trusts? The notion that someone other than the King could manage the funds of a disabled person would repel him. Presumably he would struggle with the idea that a court can rewrite an irrevocable trust to better accomplish the settlor’s intent.
But I think he would recognize something else immediately.
He would recognize the feeling of practicing (or making) law during one of those rare moments when long-settled rules are being questioned, refined and, occasionally, rewritten.
Every profession has periods of relative calm punctuated by moments of extraordinary change. Estate planning has experienced remarkably few of those moments over the last five centuries. I have been fortunate enough to practice during one of them. And I have witnessed a slew of positive estate planning changes.
Today, we see the basic architecture of wills and trusts being renovated before our eyes. Not demolished, to be sure. But walls are being moved, new rooms are being added, and doors once thought permanently locked now open with surprising ease.
Henry VIII would recognize that feeling.
