Testamentary Freedom

• Author: Browne C. Lewis
• Pages: 341-373

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Part II —The Testacy System

Chapter Seven: Testamentary Freedom

7.1 Introduction

A person spends a lifetime accumulating property. Some people acquire more resources than

others. Nonetheless, regardless of the size of the estate, the one who accrues the property wants to

control what happens to it after he or she dies. The majority of people transfer their property using

non-probate instruments like trusts, joint bank accounts and life insurance. In legal terms, property

consists of a bundle of sticks or rights, including the right to include, the right to exclude, and the

right to dispose. It is clear that, during life, a person has a right to dispose of his or her property by

gift or sale. Should the right to dispose of property survive the death of the owner of that property?

The right to dispose of property at death is a separate property right that belongs to the owner of

the property. Therefore, as long as the person complies with the law, he or she has the right to

control the distribution of his or her property. However, testamentary freedom is not absolute

because preexisting obligations may have priority over testamentary dispositions. Since the right to

dispose of property belongs to the testator, he or she may put reasonable restrictions on a person’s

right to inherit his or her estate. In this chapter, we will examine the testator’s right to dispose and to

place restrictions on the receipt of his or her property.

7.1.1. The Decedent’s Right to Control the Distribution of Property

The next case involves the law of takings. According to the Fifth Amendment, private

property cannot be taken for public use unless the government pays the private property owner just

compensation. In takings jurisprudence, property is broadly defined to include all of the rights in the

bundle of sticks of property ownership. Therefore, if the government, through eminent domain or

regulation, takes any one of those rights, the private property owner is entitled to just compensation.

Although the case discussed below deals with the issue of takings, the case is included because it

stands for the proposition that “the right to pass on valuable property to one’s heirs” is included in

the bundle of sticks that make up property ownership. Consequently, if the government regulation

takes away that right, the private property owner must be compensated.

Hodel v. Irving, 481 U.S. 704 (1987)

O’CONNOR, Justice.

The question presented is whether the original version of the “escheat” provision of the Indian

Land Consolidation Act of 1983, Pub.L. 97-459, Tit. II, 96 Stat. 2519, effected a “taking” of

appellees' decedents' property without just compensation.

I

Towards the end of the 19th century, Congress enacted a series of land Acts which divided the

communal reservations of Indian tribes into individual allotments for Indians and unallotted lands

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for non-Indian settlement. This legislation seems to have been in part animated by a desire to force

Indians to abandon their nomadic ways in order to “speed the Indians' assimilation into American

society,” Solem v. Bartlett, 465 U.S. 463, 466 (1984), and in part a result of pressure to free new lands

for further white settlement. Ibid. Two years after the enactment of the General Allotment Act of

1887, ch. 119, 24 Stat. 388, Congress adopted a specific statute authorizing the division of the Great

Reservation of the Sioux Nation into separate reservations and the allotment of specific tracts of

reservation land to individual Indians, conditioned on the consent of three-fourths of the adult male

Sioux. Act of Mar. 2, 1889, ch. 405, 25 Stat. 888. Under the Act, each male Sioux head of household

took 320 acres of land and most other individuals 160 acres. 25 Stat. 890. In order to protect the

allottees from the improvident disposition of their lands to white settlers, the Sioux allotment statute

provided that the allotted lands were to be held in trust by the United States. Id., at 891. Until 1910,

the lands of deceased allottees passed to their heirs “according to the laws of the State or Territory”

where the land was located, ibid., and after 1910, allottees were permitted to dispose of their interests

by will in accordance with regulations promulgated by the Secretary of the Interior. 36 Stat. 856, 25

U.S.C. § 373. Those regulations generally served to protect Indian ownership of the allotted lands.

The policy of allotment of Indian lands quickly proved disastrous for the Indians. Cash generated by

land sales to whites was quickly dissipated, and the Indians, rather than farming the land themselves,

evolved into petty landlords, leasing their allotted lands to white ranchers and farmers and living off

the meager rentals. Lawson, Heirship: The Indian Amoeba, reprinted in Hearing on S. 2480 and S. 2663

before the Senate Select Committee on Indian Affairs, 98th Cong., 2d Sess., 82-83 (1984). The

failure of the allotment program became even clearer as successive generations came to hold the

allotted lands. Thus 40-, 80-, and 160-acre parcels became splintered into multiple undivided

interests in land, with some parcels having hundreds, and many parcels having dozens, of owners.

Because the land was held in trust and often could not be alienated or partitioned, the fractionation

problem grew and grew over time.

A 1928 report commissioned by the Congress found the situation administratively unworkable and

economically wasteful. L. Meriam, Institute for Government Research, The Problem of Indian

Administration 40-41. Good, potentially productive, land was allowed to lie fallow, amidst great

poverty, because of the difficulties of managing property held in this manner. Hearings on H.R.

11113 before the Subcommittee on Indian Affairs of the House Committee on Interior and Insular

Affairs, 89th Cong., 2d Sess., 10 (1966) (remarks of Rep. Aspinall). In discussing the Indian

Reorganization Act of 1934, Representative Howard said:

“It is in the case of the inherited allotments, however, that the administrative costs become

incredible.... On allotted reservations, numerous cases exist where the shares of each

individual heir from lease money may be 1 cent a month. Or one heir may own minute

fractional shares in 30 or 40 different allotments. The cost of leasing, bookkeeping, and

distributing the proceeds in many cases far exceeds the total income. The Indians and the

Indian Service personnel are thus trapped in a meaningless system of minute partition in

which all thought of the possible use of land to satisfy human needs is lost in a mathematical

haze of bookkeeping.” 78 Cong.Rec. 11728 (1934).

In 1934, in response to arguments such as these, the Congress acknowledged the failure of its policy

and ended further allotment of Indian lands. Indian Reorganization Act of 1934, ch. 576, 48 Stat.

984, 25 U.S.C. § 461 et seq.

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But the end of future allotment by itself could not prevent the further compounding of the existing

problem caused by the passage of time. Ownership continued to fragment as succeeding generations

came to hold the property, since, in the order of things, each property owner was apt to have more

than one heir. In 1960, both the House and the Senate undertook comprehensive studies of the

problem. See House Committee on Interior and Insular Affairs, Indian Heirship Land Study, 86th

Cong., 2d Sess. (Comm. Print 1961); Senate Committee on Interior and Insular Affairs, Indian

Heirship Land Survey, 86th Cong., 2d Sess. (Comm. Print 1960-1961). These studies indicated that

one-half of the approximately 12 million acres of allotted trust lands were held in fractionated

ownership, with over 3 million acres held by more than six heirs to a parcel. Id., at pt. 2, p. X.

Further hearings were held in 1966, Hearings on H.R. 11113, supra, but not until the Indian Land

Consolidation Act of 1983 did the Congress take action to ameliorate the problem of fractionated

ownership of Indian lands.

Section 207 of the Indian Land Consolidation Act-the escheat provision at issue in this case-

provided:

“No undivided fractional interest in any tract of trust or restricted land within tribe's

reservation or otherwise subjected to a tribe's jurisdiction shall descedent [sic] by intestacy or

devise but shall escheat to that tribe if such interest represents 2 per centum or less of the

total acreage in such tract and has earned to its owner less than $100 in the preceding year

before it is due to escheat.” 96 Stat. 2519.

Congress made no provision for the payment of compensation to the owners of the interests

covered by § 207. The statute was signed into law on January 12, 1983, and became effective

immediately.

The three appellees-Mary Irving, Patrick Pumpkin Seed, and Eileen Bissonette-are enrolled members

of the Oglala Sioux Tribe. They are, or represent, heirs or devisees of members of the Tribe who

died in March, April, and June 1983. Eileen Bissonette's decedent, Mary Poor Bear-Little Hoop

Cross, purported to will all her property, including property subject to § 207, to her five minor

children in whose name Bissonette claims the property. Chester Irving, Charles Leroy Pumpkin

Seed, and Edgar Pumpkin Seed all died intestate. At the time of their deaths, the four decedents

owned 41 fractional interests subject to the provisions of § 207. App. 20, 22-28, 32-33, 37-39. The

Irving estate lost two interests whose value together was approximately $100; the Bureau of Indian

Affairs placed total values of approximately $2,700 on the 26 escheatable interests in the Cross estate

and $1,816 on the 13 escheatable interests in the Pumpkin Seed estates. But for § 207, this property

would have passed, in the ordinary course, to appellees or those they represent.

Appellees filed suit in the United States District Court for the District of South Dakota, claiming

that § 207 resulted in a taking of property without just compensation in violation of the Fifth

Amendment. The District Court concluded that the statute was constitutional. It held that appellees

had no vested interest in the property of the decedents prior to their deaths and that Congress had

plenary authority to abolish the power of testamentary disposition of Indian property and to alter

the rules of intestate succession.

The Court of Appeals for the Eighth Circuit reversed. Irving v. Clark, 758 F.2d 1260 (1985).

Although it agreed that appellees had no vested rights in the decedents' property, it concluded that

their decedents had a right, derived from the original Sioux allotment statute, to control disposition