Inheritance and the Right to Bequeath In every Western democracy today, inheritances have a very profound influence on people’s lives. This motivates renewed scholarship on inheritance law by philosophy and the legal sciences. The present volume aims to contribute to some ongoing areas of inquiry while also filling some gaps in research. It is organized in a highly interdisciplinary way. In the thirteen chapters of the book, written by outstanding philosophers and legal scholars, the following questions, among others, are discussed: What is the nature of the right to bequeath? What are the social functions of bequest and inheritance? What arguments concerning justice have philosophers and legal scholars advanced in favour or against practices of bequest and inheritance? How should we think about taxing the wealth transfers that occur in bequest and inheritance? In discussing these questions, the authors break new ground and offer much- needed insight into several related domains, such as the philosophy of law; legal theory; general and applied ethics; social and political philosophy; theories of justice; and the history of legal, political, and economic thought. This book will be of great interest to scholars in these areas as well as policy-makers. Hans-Christoph Schmidt am Busch is Professor of Philosophy at the University of Braunschweig, Germany. Daniel Halliday is Associate Professor in Political Philosophy at the University of Melbourne, Australia. Thomas Gutmann is Professor of Civil Law and Philosophy of Law at the Faculties of Law and of Philosophy and Co-Director of the Research Institute for Philosophy of Law at the University of Münster, Germany. Part of the LAW AND POLITICS: CONTINENTAL PERSPECTIVES series series editors Mariano Croce Sapienza University of Rome, Italy Marco Goldoni University of Glasgow, UK for information about the series and details of previous and forthcoming titles, see https://www.routledge.com/law/series/LPCP A GlassHouse book Inheritance and the Right to Bequeath Legal and Philosophical Perspectives Edited by Hans-Christoph Schmidt am Busch, Daniel Halliday and Thomas Gutmann First published 2023 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 A GlassHouse book Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 selection and editorial matter, Hans-Christoph Schmidt am Busch, Daniel Halliday and Thomas Gutmann; individual chapters, the contributors The right of Hans-Christoph Schmidt am Busch, Daniel Halliday and Thomas Gutmann to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Schmidt am Busch, Hans-Christoph, editor. | Halliday, Daniel, 1981– editor. | Gutmann, Thomas, editor. Title: Inheritance and the right to bequeath : legal and philosophical perspectives / edited by Hans-Christoph Schmidt am Busch, Daniel Halliday, and Thomas Gutmann. Description: Abingdon, Oxon [UK] ; New York, NY : Routledge, 2022. | Series: Law and politics: continental perspectives | Includes bibliographical references and index. Identifiers: LCCN 2022012260 (print) | LCCN 2022012261 (ebook) | ISBN 9780367760298 (hardback) | ISBN 9781032331577 (paperback) | ISBN 9781003318477 (ebook) Subjects: LCSH: Inheritance and succession. | Legacies. | Distribution of decedents’ estates. | Wills. | Inheritance and transfer tax—Law and legislation. | Estate planning. | Law (Philosophical concept) Classification: LCC K811.L4 I54 2022 (print) | LCC K811.L4 (ebook) | DDC 346.05/4—dc23/eng/20220630 LC record available at https://lccn.loc.gov/2022012260 LC ebook record available at https://lccn.loc.gov/2022012261 ISBN: 978-0-367-76029-8 (hbk) ISBN: 978-1-032-33157-7 (pbk) ISBN: 978-1-003-31847-7 (ebk) DOI: 10.4324/9781003318477 Typeset in Bembo by Apex CoVantage, LLC Contents 1 Introduction 1 THOMAS GUTMANN, DANIEL HALLIDAY, AND HANS-CHRISTOPH SCHMIDT AM BUSCH 2 What, if anything, is wrong with bequest? A preliminary sketch 15 STEFAN GOSEPATH 3 The morality of charitable bequests 36 MIRANDA PERRY FLEISCHER 4 Is the right to bequeath a supernatural power? 57 HILLEL STEINER 5 The right to bequeath as a common legal power 76 CONSTANTIN LUFT AND THOMAS GUTMANN 6 Property rights and the power to transfer 95 DANIEL HALLIDAY 7 The double function of inheritance: Rethinking conditional bequests 111 SHELLY KREICZER-LEVY 8 Remembrance, esteem, and the right to bequeath 128 HANS-CHRISTOPH SCHMIDT AM BUSCH 9 Inheritance law and the challenge of securing care in old age: A three-pronged solution 144 DAPHNA HACKER vi Contents 10 Natural right or convention? Fichte on the status of the right to bequeath property and the right to inherit property 166 DAVID JAMES 11 Property in the tension between family and civil society: Inheritance according to G. W. F. Hegel and Eduard Gans 181 CHRISTOPHER YEOMANS 12 Inheritance tax, justice and family businesses 198 CHRISTIAN NEUHÄUSER 13 Taxing wealth and wealth transfers in the 21st century 215 JENNIFER BIRD-POLLAN List of contributors 233 Index 237 Chapter 1 Introduction Thomas Gutmann, Daniel Halliday, and Hans-Christoph Schmidt am Busch 1 Inherited wealth: the legal-philosophical landscape This collection brings together a variety of legal and philosophical scholars. Each aims to make progress with various aspects of the problem posed by inherited wealth. The challenge of theorizing about inheritance and bequest is one where the perspectives of political philosophy and law are especially complementary. Let us begin, though, by noting some of the motivations for a collection of this sort, which run somewhat deeper than the fact that there is a long-recognized overlap between work in legal theory and in political philosophy. One motivation is straightforwardly scholarly. Although it is fair to say that while the theoretical study of inheritance and bequest has benefitted from an increased level of scholarly interest in the last decade or so, there remain a num- ber of under-theorized aspects of this topic and plenty of scope for work to be done. At the same time, some long-standing questions are due for a revisit, and some historical figures deserve to be paid renewed attention. Here we might briefly note the wide variety of questions that might benefit from fur- ther examination. For instance, how should we conceptualize acts of bequest? Is bequeathing much like other forms of gift-giving (as many philosophers and legal scholars believe)? Or does the post-mortem character of the wealth trans- fer make it something unique, to which different considerations must apply? Moreover, do we have good reason to defend the institutions of bequest and inheritance at all?1 Or should these institutions instead be abolished entirely – as a growing number of thinkers suggest? If bequest and inheritance can be shown to be justified, what degree of restriction on them might justly remain, and are there important distinctions to be drawn between different categories of asset? Who should be entitled to inherit? Only persons and institutions 1 Today we see five functions of succession law that should concern lawmakers when addressing the inter- generational transfer of wealth: to increase economic productivity, to effect a just distribution of wealth, to avoid economic distortion, to strengthen (or weaken) family ties, and to protect economic units, in particular, small to medium privately owned (family) businesses and agriculture (see Dutta 2014). DOI: 10.4324/9781003318477-1 2 Thomas Gutmann et al. named in last wills? Or do family relationships also engender claims to por- tions of inherited wealth (a point of view defended by Hegel, which continues to be influential in German-speaking countries)? If so, how should so-called patchwork families be treated by law? And how should we deal with charitable bequests and bequests of enterprises? Each of the chapters gathered in this col- lection sheds new light on at least one of these issues. Another more practical motivation for this book is that the current political and economic climate may be such that the actual regulation of inherited wealth could soon receive more attention from lawmakers. The impact of the COVID pandemic, though still uncertain, has heightened concern about concentrations of wealth. It is fair to say, though, that such concerns already had momentum prior to 2020. They owe much of their force to worries about a general slow- down or stagnation in economic growth and the opportunities available to those seeking to access wealth through education and skilled work. For decades, historically accumulated wealth, not least the value of homes acquired in the mid- to late 20th century by the “baby boomer” cohort, has grown more rap- idly than wages earned by later cohorts. Under such conditions, an individual’s prospects may depend more on whether he or she will inherit wealth than whether he or she works hard in the labour market.2 In every Western democ- racy today – contrasting somewhat with the decades after the Second World War – inheritance has a very profound influence on people’s lives. The home we are able to afford, the neighbours we have, the schools and universities our children attend, the social life we live, the political offices we can apply for – all this increasingly depends not just on our own labour market performance but on whether we or our parents are inheritors. A common worry is that inherit- ance is an important contributor to growing inequality, which is socially cor- rosive in many ways (see e.g. Wilkinson/Pickett 2009). Setting aside debates about inequality’s corrosiveness, it is important to recognize that whether and how inheritance contributes to material inequality is a more complex and sub- tle matter than sometimes supposed. Theoretical work needs to be wary of this, particularly when advancing normative claims about the relation between inheritance and distributive justice.3 Nonetheless, one effect of the pandemic might be to create a political environment in which relatively significant tax 2 This hypothesis is associated with Piketty 2014 and is renewed in Piketty 2020. For more on the relationship between economic stagnation and inheritance in the UK, see for example the recent report from the Institute for Fiscal Studies (Bourquin et al. 2021). 3 One problem is that inheritance often goes to members of later birth cohorts who are doing better with respect to earnings from labour anyway. This means that inheritance can increase the range or dispersion of wealth inequality while reducing other measures of inequality, such as the Gini coef- ficient. At the same time, the impact on inequality can be distinguished from the impact on mobility, understood as the prospects for people to change their position in the distribution of wealth. It is possible for inheritance to reduce mobility, by tying the wealth of members of one cohort to that of their parents in an earlier cohort, without necessarily increasing inequality within the recipient cohort. Again see Bourquin et al. 2021, and for some discussion of other countries, see Elinder et al. Introduction 3 reform becomes more feasible, at least temporarily, than it would otherwise have been. The tendency for governments to tax a mixture of income and consumption and to leave inheritance largely alone may seem especially ques- tionable given trends towards wage stagnation among the young.4 On the other hand, in our aging societies facing cutbacks in welfare state programmes, there may be a shift towards inheritance as an enabler of a comfortable retirement and secure care in old age.5 This privatized solution, however, creates problems of inequality within the older generation.6 Suffice it to say that the work of this collection gains further motivation from these trends. Particularly in the second half of the 20th century, theoretical discussions about the right to bequeath and the limits to inherited wealth have been rela- tively scarce. This contrasts with the 18th, 19th, and early 20th centuries, when the question of how to regulate the bequest of property was a source of great controversy. From a socio-historical perspective on the “the longue durée of inheritance law” (Beckert 2007), that is on discourses on inheritance law and legal developments in France, Germany, and the United States since the revo- lutions of the late 18th century, what we can see today is “a backlash in key areas of inheritance law which breaks the Enlightenment’s promise to distrib- ute wealth in society based on individual achievement”, forcing us to pose the question whether “we are still modern” in this regard.7 Historical debates on inheritance focused not only on the principles of an achievement-oriented society, on equal opportunity and other aspects of distributive justice, but also on further problems posed by inherited wealth, among them the prevention of concentrations of wealth and power detrimental to democracy.8 While thinkers such as Fichte linked the justification of the right to bequeath to the estab- lishment of property rights acquired through labour, Hegel and Gans, among many others, maintained that the relationship between family values and the freedom of testation was crucial when it came to thinking about bequest and inheritance.9 Interestingly, from Bentham to Fourier and the Saint-Simonians, the question was raised whether a more or less unfettered right to bequeath, while serving as a means to protect privately owned economic units, actually leads to an inefficient distribution of economic resources at a societal level (Erreygers 1997) – a question which today’s prolific Economic Analysis of Law, albeit based on the normative premise that legal rules ought to be efficient in 2018; Halliday 2020 offers some further remarks on why such complexities matter for normative analyses of inheritance and inequality. 4 For more on inequality between cohorts and discussion of implications for tax reform, see Halliday (forthcoming). 5 See Hacker, in this volume. 6 See Alstott 2017 and Wolff 2020. 7 Beckert 2013; see also Beckert 2008. 8 Cf. Erreygers 1997; Beckert 2007, 2008; Halliday 2018, esp. ch. 2, 3, and 7. 9 See Klippel 1984; Beckert 2008; Alstott 2009; and Dutta 2014.