Grandmother Draws Her Will

by GEORGE W. ALGER

1

THIS essay contains some random moralizing by an old lawyer on rich old women and their wills. It may not interest you. You may not have a rich grandmother anyway, and you are entitled at least to this warning. The particular grandmother I talk to in the first part of this essay is dead now. We were going over her Last Will, which a lawyer who had since died had drawn. “Here, ” she said, “is a clause which he explained to me two or three times but which I never really understood. Will you try it again? I am supposed to give the trust to my son and my daughter and after they die to their issue ‘per stirpes’ and not ‘per capita.’ What does it mean?”

“Well,”I said, “it is a modern headache for grandmothers. Let me tell you what it is all about. I will translate the Latin later. It is a headache which comes from the fact that with modern medicine and modern scientific advance, and the like, there are more old people like you living today than ever before. Here you are, nearly eighty; and under what our lawyers used to call the Carlisle and Northampton tables of mortality, accumulated in the eighteenth-century graveyards and still in vogue when I began to practice law, you ought to have died twenty or thirty years ago. Old-time lawyers drew wills on the assumption that you would never really know your grandchildren. You would know, or think you knew, your own children very well, of course. You might assume that they would grow up and marry and have children, but your chances of really knowing your grandchildren were very small indeed.

“What the old-timers of my profession fifty or a hundred years ago did, therefore, was to think almost exclusively of the children of the willmaker and nothing about the grandchildren; so they put in this Latin stuff which means that when your son dies, after enjoying for life half the income of the trust for your children, his issue (which is the lawyer’s substitute for the pleasanter word ‘children’) will take half the principal of the trust; and your daughter’s children will take, when she dies, the other half. Here is where your headache begins. In your case, your son has only one child. That child will get all you gave in the trust to your son for his life; and your daughter’s children — there are four — will receive divided between them the trust for their mother. So they suffer by being in a large family while your son’s ewe lamb gets a small fortune by being an only child.

“ The problem which confronts you here is fairly new. The trouble is, as I have said, that a lot more rich old women living today really know their own grandchildren. They are not merely inchoate prospects—as they probably would have been a few generations ago when people died earlier, when they did not know whether their children would themselves have children or how many, and when grandchildren were provided for by the trusts that were made. So this idea is embodied in the Latin phrase ‘ per stirpes.’ The principal held in trust during the life of each child is passed on to his or her issue.

“For its time it was not a bad idea at all. If was under ordinary circumstances the best which could then be done, but why should it apply to you? You have lived a long life. Not only have your children grown up and had lawful issue, but this bloodless phrase 4 per stirpes’ applies to the grandchildren whom you know and love and who to you are really persons — part of your flesh and blood. When you realize what you are doing by this ‘per stirpes’ stuff you may not like the idea of discriminating between your grandchildren, giving your son’s child four times as much as you give to each of your daughter’s four children instead of giving ‘per capita,’ which means treating all of your grandchildren alike. The trouble with us lawyers is that without thinking too much about it, or telling our clients anything about it, we fall too easily into the ancient formula, which deserves reconsideration in cases like yours. Many lawyers who draw old people’s wills still use the old formula as a matter of course.

“All I am telling you is this: Do not think that you are committing a testamentary sin if you turn the formula around and say ‘ per capita’ and not ‘per stirpes’ and consider your grandchildren as your loved descendants and not as the ‘per stirpes’ issue of either of your children.

“Here is another consideration which I think you ought not to overlook in deciding on this matter. Your son and his wife are apparently quite satisfied with bringing one child into the world. They have had a life of comparative ease and comfort by not encumbering themselves with any additional children. The provision for your son in your Last Will carried forward after his death to his only daughter will, of course, permit her to live a life of considerable luxury. Your daughter and her husband have brought up four children — your grandchildren — at considerable sacrifice, in one sense, to themselves. In your trust for your son and daughter you have treated them alike in the amounts placed in trust for them. It will, of course, be harder for your daughter to make both ends meet on the income of her trust with her growing family. But treating your son and daughter other than equally would seem unjust to you as you love them equally. What you are overlooking, however, is this question : Why should you in effect penalize your daughter for having brought so many of your grandchildren into the world?

“If you were in your thirties and I were advising you on your Will it might, of course, be a different matter. You would then just be a married woman with two young children. Grandchildren would be remote prospects; so the ‘per stirpes’ formula might then seem logical and advisable. Now you know too much to follow any such rule. So consult your heart before you consult your lawyer us to what you want to do about your grandchildren.”

I am glad to say she did.

So much for this particular old grandmother and the problem of her grandchildren.

2

WE have to consider taxes more frequently these days than ever before. Inheritance taxes on estates are very high and avoiding them where possible is, of course, advisable. What bothers me often is to see what some of the tax considerations do with what might be called the human side of wills. Some of the wills I have known have, I think, made far too great sacrifices to tax avoidance. Only rarely has a bewildered testator balked and refused to make them. An old friend of mine who had a wife in her seventies and two grown children was about to make his will. He was advised by a lawyer friend whom he consulted, and who knew all about estate taxes, to give the bulk of his estate in trust to his wife, with the income payable to her for life, this trust to be divided between her children on her death. It was perfectly good advice— from a tax standpoint.

“If,” said his tax adviser, “you give it to her in trust for life there would be only one tax on it. If you give it to her outright, when she dies she will have to make a will herself and her inheritance from you may be taxed once more, making practically two taxes on the same money — one when you gave it to her and again when she disposes of it herself.”

“I won’t do it,” the old man said. “My wife comes first with me. She is in very good health and always has been. I hope she lives for a great many years. I do not wish to crimp her to an income which would be a great deal less than she is now accustomed to spending. What is more, I want her to be the head of the family after I am gone. My children will pay a great deal more attention to what their mother says if she is the boss of her own fortune than if they know that my money is a sure thing to them and all they have to do is to wait patiently until she dies to inherit it; and, in the meantime, she may perhaps feel guilty about living so long. The cheapest way to die is not always the best, and it certainly isn’t in my case.”

There is another feature of old people’s wills which I have never liked — the bloodstream is with them more or less a fetish. They dig up relatives they have not seen or heard from in twenty years and give them legacies just because they are relatives. I knew an old architect who left a million dollars — practically all of it to collateral relatives, almost none of whom he knew personally. Young people making wills almost never do this kind of thing. The sense of family seems to grow with years, or perhaps the old generation with this strong family sense is passing. How many times I have seen old people’s wills which made no provision whatever for close friends of their own lifetime, friends known to be both old and needy, while remote relatives, difficult even to locate or identify, took their place. These legacies of distant relatives are not usually very large, but the amount would seem enormous to a good many needy old friends.

Here is something else to think about, which most women with money do not think about at all, and their lawyers do not very often bring the matter to their attention. Why do they want to wait until they die to dispose of money and property for which they have no earthly use themselves, which they do not need, which may in fact be something of a burden to them? What is more, if they wait the government will take most of it in taxes upon their death. What a lot of old ladies who have complete financial security do not think of and really need help about is how to give away a lot of their money and property in their lifetime. They would get a great deal more fun out of living if they did that instead of avoiding drafts and keeping warm and waiting for the Great Reaper. There is, for example, no tax on gifts up to $3000 a year to any one person. Why do they not give to people they know and care for who need it now? This is a fairly new idea. Our death taxes are so high that our giving power should be used wherever possible while we live. Lots of people are doing what I have done with my own grandchildren. When a birthday comes around I write a sort of supplemental birthday letter and put it in an envelope with one or more of those government bonds which mature in ten years issued in the name of the grandchild. When the decade has passed, the grandchild will be of age and will like the bond.

There are different kinds of trusts you can make for grownups to whom outright gifts may seem undesirable and into which you can pay, without tax, $3000 a year from year to year. In ten years there is a substantial accumulation in them. The whole business of making up trusts of this kind is a new one in which lawyers can be very helpful.

I never could understand why it is that old people with money give so rarely to institutions for the needy ones of their own generation — institutions which afford dignity and security to old age. They ought to sympathize with institutions of this kind and give them a hand. If rich old people do not sympathize with old age enough to do something about it, where should these homes for the aged go for their support ?

There is, I think, an entirely new attitude not only toward willmaking today, which I for one like to encourage, but toward developing what I call a distributive attitude toward life itself. Part of this new attitude is due, of course, to trust company advertising. They send us with great frequency the tax barometer which tells us what the federal and state taxes will be on what would be our estate when we die. We find that Uncle Sam and the Tax Department of the state in which we live will be our principal beneficiaries, having a priority over all others, and we are scarcely happy about it. Most of us, to be sure, do not like to think too much about death, particularly our own. We therefore do not enjoy making a will. We put it off—or what is almost worse, die with an old will which is completely out of date. But Uncle Sam is slowly making us change our attitude and we ought to thank him for it. Why should we not get some fun out of making a distributive period in our lives? When we have something which we have to give away sometime, should we not ask ourselves why we do not do at least some of the giving now?

One of my best memories is of a friend who certainly had two years of happiness at the end of her life fussing with her estate. She was, I think, the most loved woman I have ever known. She had a large house full of gifts made to her by a host of friends. Many of the gifts were of considerable value and all were in good taste. In her will she gave them all to a devoted friend, requesting her to distribute these personal effects to persons named in a letter left with her will. She wrote the letter herself. It was a very long letter and there were a great many persons named in it. It was continuous fun for her to add to or revise this letter. When I see the Georgian silver candlesticks and the old Turkish treasure chest which Lillian Wald gave me, they remind me not only of a long and close friendship but of a woman who made a happy art of dying. If you face it with a smile it can be done.

Harry Overstreet in The Mature Mind gives a test of mental maturity. One part is in learning that the main source of happiness lies in giving rather than in getting. He says, “It is good news that our life can grow in power and happiness as it links itself productively to life other than our own.”

Maturity rarely begins with old age. It is a process which should begin earlier and which helps us to attain wisdom in giving as we go along, and to learn to like the process so that it is not a burden but a pleasure. Mature-minded people, I notice, enjoy old age. Their friends are likely to be for the most part not of their own generation but one or two generations later. To these mature-minded people the distributive process is duck soup.

I remember some years ago going to visit a very delightful and very mature-minded old lady. She greeted me with a broad smile. She said, “I have just had a compliment. Jack, my little six-year-old great-grandson, has just asked me to go pony riding with him. When I said no he demanded to know why. ‘Well,’ I said, ‘for one thing I am eighty-six years old.’ ‘Shucks,’ he said with great disgust. My excuse did not seem valid at all. It apparently had never entered his head that I was old, which cheers me a lot.”

After all, old age is largely a state of mind. Little Jack was pretty nearly—but, alas, not quite — right!