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Alienation Case Analysis

The case illustrates the caveat, “Be careful what you wish for; you just might get it.”

Lester has managed to keep the property in the family (and keep it intact except for Sue), but at what cost? Sue sold her share for far below market value (possibly because she believed this provision barred her from getting a fair price), and the other three are obviously not on good terms.

When confronted with a client who wishes to insert a similar provision in his will, to preserve the family vacation property for all his children, citing this case may be effective in dissuading him from doing so.

Bequeathing the property to the children with rights of first refusal may not be a perfect solution, but it’s far better than doing what Lester did.

The case also illustrates a wise principle: “Don’t own property with family members.”

The court’s core holding — that the restraint in the will is reasonable — is dubious and could cause inequity in other cases.

From the court’s statement of facts, it appears that David wants partition so that he can get that part of the property with the “cabin and most of the property’s dry land for himself.”

But what if he wanted partition because of objectively oppressive behavior by his siblings? Equity would weigh in his favor, but the restriction would bar a partition that is undeniably reasonable. The court found that keeping the property intact, and in the family, is a reasonable purpose, and that the length of the children’s lifetimes is a reasonable duration.

The court adopted a rule that, if the restraint is reasonable, the effect of the testator will be given effect, and that “no partition suit will lie before the date so fixed or the happening of the event named.” 85 A.L.R. 1321, 1324 (1933).

Thus, where the restriction was reasonable originally, partition cannot happen, even if it is desirable in light of subsequent events.

The court seems to ignore that it is an invitation to trouble to bequeath vacation property to all your children, including a provision that, if one wishes to sell his interest, he can only do so for a tiny fraction of the fair market value of his share.

Suppose one child moves far from Wisconsin, and it is not practicable for him to use the property.

Suppose that paying the property taxes is a genuine burden for one of the children.

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Suppose the children have so many children and grandchildren of their own that joint ownership between four families overburdens the property, and the most sensible solution is for one to buy out the others, at whatever price they place on it.

Suppose one child and his family just makes life miserable for the other children and their families.

Contrary to the court’s holding, a good case could be made that this restraint on alienation is inherently unreasonable. Just because a restraint doesn’t violate the rule against perpetuities doesn’t mean it’s reasonable.

Maybe in a future case, the court will hold differently, if the party seeking partition can show that, even though the restraint was reasonable when made, subsequent events have made it unreasonable in practice, and it is equitable for him to seek partition. But the opinion in this case will not give him much support.

Thus, the effect of the court’s holding is more likely in future cases to impede equitable results.

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David Ziemer can be reached by email.

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