Return of the Dead Hand

Pity the fathers of 1920's flappers. Born in an age when a glimpse of stocking was thought of as something shocking, they sired girls who bobbed their hair and showed their knees. The boys were no better, listening to jazz and dancing the Charleston.

If such a father was smart enough to sell his stocks before the 1929 crash, you can imagine his estate plan. Everything for the kids was tied up in trust, with strict conditions meant to promote proper behavior. And the trustee was directed – no, commanded – to never, ever invest a dollar in the stock market.

Such a father wielded his "dead hand" with good intentions, but the results were often disastrous. The kids hated the conditions and rebelled. (if the SEC couldn't supervise Lehman Brothers, how could a trust company supervise a trust's beneficiaries?) The prohibition against investing in stocks – for which the beneficiaries invariably blamed the trustee, not father – depleted family fortunes.

After World War II, estate planners had many a horror story to cite as they urged their clients to employ the dead hand lightly, if at all.

Now, it seems, the pendulum has swung back with a vengeance. See the Wills, Trusts and Estate Prof for a link to the FT review of Immortality and the Law: The Rising Power of the American Dead.