Search results

Property and inheritance are "quintessential state matters."' In fact, there is no federal intestacy law. There is no federal wills law. There is no federal trust law. And yet. Increasingly, federal law impacts court decisions involving private wealth transfer. Increasingly, federal law is the central consideration in premortem and postmortem planning for private wealth transfer. Despite this, until recently, little scholarly attention has been paid to this phenomenon; the assumption regarding the centrality of state law, quoted above, having gone largely unquestioned. But now that the "sleeping giant" has awakened, the role that federal law plays in private wealth transfer requires serious and comprehensive academic consideration. This symposium issue of the Vanderbilt Law Review is intended to do just that. There are ten articles addressing various facets of the topic. These are set forth in the same order as the order of the presentations made by the distinguished authors at the symposium that took place at Vanderbilt Law School in Nashville, ennessee earlier this year. A number of the articles are followed by comments by other distinguished scholars, who not only address the particular article, but also use the comment as a platform to explore other aspects of the topic The old paradigm is dead. Private wealth transfer law is NOT just state law. Indeed, in some respects, it is now principally federal law. This increasing federalization and even dominance can be expected to continue apace. While the problems and consequences of federalization are not new to many other areas of law and have received considerable and serious scholarly attention, they are new to private wealth transfer. The way in which the state-federal balance is being struck, the consequences for private wealth transfer flowing from federal involvement, and the principles that should guide courts and legislators in determining the proper state-federal allocation, are all examined with considerable analytic care in these pages. Hopefully, this ...

The paper is concerned with the relationship of taxation to
conceptions of the state and the community. The paper contends that public
finance theorists have focused little attention on what, precisely, the
state is and the role of subnational and supranational communities, even
though understanding the state and these communities is essential for
grasping how tax revenues are really distributed. The failure of public
finance to do so is explainable by the powerful faith in the expertise of
theorists and bureaucrats and abstract models for social welfare, whether
or not they work or would be agreed upon and implemented via the political
process.

Professor Robert Danforth's exploration of spendthrift trusts in Article Five of the UTC and the Future of Creditors 'Rights in Trusts is a superb piece of work. Professor Danforth analyzes with considerable acuity the ins and outs of the specific rights creditors and beneficiaries of trusts have under the Uniform Trust Code (UTC). His article clearly represents the most detailed analysis of the new Code's approach to spendthrift trusts. Professor Danforth is determined to establish that Article V is not as creditor-friendly as its critics claim.2 His article is essentially an apologia, coupled with some proposed modifications so as to leave no doubt about this. However, in his zeal to defend Article V and refute the contention that it is too creditor-friendly, Professor Danforth strikingly ignores its manifold shortcomings. Article V is a missed opportunity to legislate a coherent theory of creditor rights and spendthrift protections. As drafted, it is a disappointing amalgam of often contradictory, formalistic rules.

Indisputably, the lives of all individuals, now and throughout history, have not been commensurate in every respect. No individual has the most of everything at all times - net worth, love, happiness, security, companionship, fame, food, land, grandchildren, or whatever else he or she values.1 Nevertheless, a utopian strain in intellectual thought, emanating as the Enlightenment afterglow,2 continues to place its faith in the public construction of an ersatz equality that has never existed naturally.3 The Myth of Ownership, a recent book by two New York University law/philosophy professors, Liam Murphy and Thomas Nagel, is a striking exemplar of this dogged faith in the government's ability to eradicate inequality . As Murphy and Nagel powerfully demonstrate, many of the dominant concerns of taxation, such as vertical and horizontal equity and the debate over income versus consumption tax, diminish in importance or even vanish when the focus turns to first principles. The proposed policy solutions, which are the result of so much intellectual effort and discourse, are in a sense beside the point. Thus, a high level of awareness that tax policy cannot and does not advance in a vacuum would serve tax scholars well. To the extent that The Myth of Ownership stimulates discussion of the underlying values taxation serves, it will prove a positive contribution, notwithstanding the authors' unfortunate failure to make the case for their own first principles.

The Waqf and the trust have an ancient, intertwined history. However, whereas the Waqf has largely remained a static institution, the trust has proven remarkably flexible and responsive to changing conditions affecting intergenerational management of family wealth and its preservation. While there is a temptation to find clones in legal constructs of different cultures, care must be exercised to avoid simplistic or superficial generalizations. This is true of the Waqf and the trust. It would be intriguing to find comparable wealth administration and preservation constructs in these two great systems of law. This is simply not the case with the Waqf and the trust. True, at certain times in history both have been resorted to so as to avoid unacceptable wealth transfer regimes and external threats to family wealth. Yet, the trust has proven more resilient, increasing its domain over worldwide capital by offering an efficient means to manage private capital cross-generationally. The family Waqf, on the other hand, has continued to lose ground, a victim of its own rigid doctrine's inability to adapt to modem conditions, the absence of adequate adjudicatory mechanisms, and statist and populist concerns about alternative political power centers and economic inefficiencies. The stark contrast between these superficially similar institutions emphasizes those attributes of the trust and the system in which it functions that have played and are playing a role in its remarkable development as the vehicle of choice for intergenerational wealth management throughout the world. While the waqf may have been conceived as an ameliorative construct for the harsh inheritance rules of Islamic society and may have functioned successfully for long periods under different conditions, Its modern decline seems, in retrospect, readily predictable. The legal system, of which it is an integral part, and its related, highly stylized rule regime and undeveloped enforcement procedures, made any different fate impossible to achieve without ...

With considerable acuity, Carlyn S. McCaffrey and Elyse G.Kirschner explore the maze created by the new Code and treasury regulation provisions. In addition to affording a fascinating roadmap through the maze, their article, Learning to Live with the New Foreign Nongrantor Trust Rules, demonstrates the difficulty of addressing legislatively the multitude of trust arrangements that can be devised in the struggle between grantors worldwide and the U.S. tax authorities. The article also exposes the inevitable generation of unintended consequences, including new loopholes, that are a product of such legislation. In a second tax article, Respect for "Form" as "Substance" in U.S. Taxation of International Trusts, Donald D. Kozusko and Stephen K. Vetter address the regulatory conundrum posed by enforcing hard-and-fast rules in the international trust context. They argue that, in the case of transfer taxation and trust income taxation, substance has often taken a back seat to form. Indeed, form is substance. This reality effects the choices that are routinely made between the utilization of one form of ownership over another. The Code very clearly details different tax consequences, depending on the choice of form made. In the case of international trusts, under the new tax regime, the jury is still out as to whether form will be submerged by broad doctrines of economic substance and step transactions, or whether form will still prove to be the substance of the law, more generally characterizing the U.S. taxation regime relating to foreign trusts. Ironically, as Kozusko and Vetter point out, the misplaced rigor of the Code's entity attribution rules may actually subvert the substantive goals served by formalism. The last topic explored in this issue of the Journal is asset protection, especially in conjunction with the international trust. There are articles by leading proponents, including Gideon Rothschild, Daniel S. Rubin, and Jonathan G. Blattmachr, as well as by a leading critic, Eric Henzy, who successfully ...

The starting point of this article is that the same impulses present in societies with Western legal systems to manage family wealth over time have been present in Islamic societies as well. But unlike other legal regimes regulating such impulses, waqf law has been largely unresponsive, especially in light of changing typologies of wealth and socio-economic conditions. A number of factors explain the failure of legal doctrine to respond. The first of these is the religious or divine grounding of waqf law, making it difficult for the law to evolve in a responsive and uncontroversial manner, one that does not represent a threat to the fundamental structure of Islamic law itself. Second, the related social norms observed by constituents of Islamic societies have deterred individuals from aggressively planning in ways that contradict "divine" precepts of the law. Furthermore, these norms have fostered an ethos of not taking seriously alternatives to the rules of inheritance. A third consideration has been the statutory response to the problem. Legislative reforms in countries with sizeable Muslim populations have differed strikingly from the legislative reforms with respect to trusts. Trust legislation has progressively eliminated many of the significant impediments to its more efficient, worldwide use. Legislation addressing the waqf has tended more to its overregulation or outright prohibition, sometimes accompanied by expropriation of property currently held in existing waqfs.

The Hague Convention on the Law Applicable to Succession to the Estates of Deceased Persons' is an exceptionally complex document with the avowed purpose of radically altering the choice of law rules in the succession field that have traditionally guided all common law jurisdictions as well as many civil law regimes. To date, the conflicts revolution that has engulfed other fields of law such as contracts and torts has barely intruded into the realm of property and succession law. In large part, this has been attributable to the nearly absolute adherence of judges and legislators to the relatively simple, straightforward standards that have held sway for centuries.This Article will first examine critically the general operation of the Convention. An evaluation will be made of the arguments in support of the proposal to eliminate the situs rule for real property and the consequences from both a choice of law and wealth transfer perspective which are likely to flow from the substitution of new and arbitrary rules. The Article will then undertake a similar review of the Convention's departure from the domicile standard with respect to personal property. Following this consideration, the Article will evaluate the Convention's likely impact on estate planning and the efforts of mobile individuals and those with multijurisdictional estates to predetermine the rules by which their wealth will be disposed. The Article then proceeds to examine other fundamental issues of choice of law that are raised by the Convention and its quixotic quest for uniformity and a unitary choice of law rule, specifically: proof of foreign law, debate among scholars as to the proper approach in identification and resolution of conflicts of law, renvoi, incidental questions, what is a "conflict," and the viability and scope of the public policy exception to choice of law rules. With these issues in mind, the Article considers a technical solution to the problems raised by the Convention. It then proceeds to discuss the broader issue of choice ...

This article first explores the development of the de facto system of tax exemption and identifies the tensions that led to its demise. The analysis then details the substitution of a statutory structure in place of the traditional informal arrangement and examines the potential present in that structure for substantial IRS interference in the political process.

The foreign attorney new to the field of US taxation is likely to find it an alien, frustrating terrain, crisscrossed by a forbidding network of vaguely interrelated statutory provisions. His initial reaction will undoubtedly be to seek out a competent text to guide him through the maze. But selecting the right text may prove a chore in itself. Some works assume an initial familiarity with the area which the attorney will lack; others may gloss over a particular point of interest or not address it at all; conversely, the work may narrowly focus on an aspect of taxation with which the attorney has little concern.