On the other hand, substantial freedom of bequest prevailed in parts of France before the Revolution, and was only abolished by the Code Napoléon. This is the historical reason why substantial freedom of bequest is the law in the Province of Quebec, for in Canada, as in the United States, the inheritance law is not Federal, but is determined by each Province for itself. This §4. Where an individual is permitted by law to make a will, he does not always do so. In some cases this omission is due to forgetfulness, in others to the superstitious belief that to make a will is unlucky and will hasten death, in a few to the belief that a will once made is irrevocable and cannot afterwards be altered. last belief is, of course, a complete error, induced perhaps by the phrase "Last Will and Testament." Any sane person over twenty-one can make a new will, if he wishes, every half-hour and that will, which is latest in time, revokes all the others, in so far as they are inconsistent with it. An individual, who dies without having made a will, is said to die intestate, and the ownership of his property is determined by the rules of intestate succession. These rules vary in different countries. In most cases all the property is equally divided between all children without distinction of age or sex, subject to some provision for the surviving spouse. In English law a distinction is drawn between realty, which includes all landed property other than leaseholds, and personalty, which includes leaseholds and all other property. Subject to certain rights Dower Act, 1833, of the widow's right to dower (Williams, Real Property, twenty-first edition, pp. 322-9). This right entitled her to a life interest in one-third of her deceased husband's land. It is spoken of by Williams and others as an "inconvenient right," but they are evidently not looking at the matter from the point of view of the widow, who is liable under the present law to receive nothing on her husband's death. 1 For details see Eyre Lloyd, op. cit. of surviving spouses', the personalty is equally divided between all children, but all the realty goes to the eldest son. This latter provision constitutes what is generally known as the Law of Primogeniture. It is a common error to suppose that the Law of Primogeniture applies compulsorily to all property. In fact it applies only in cases of intestacy, and then only to realty. It has, however, been the custom of many landowners, especially hereditary peers, to leave their estates by will, or more often under a settlement, to their eldest son. But primogeniture by custom should be clearly distinguished from primogeniture by law. The rules of intestate succession may be based on any, or on a combination, of three principles, first, the presumed wishes of the dead man, second, the interests of his family, third, the interests of the community. A right choice between these principles may obviously involve a conflict between equity and economy. This question, however, must be postponed to a later chapter.' But it may be added that, since most people with any appreciable property do in fact make wills, the law of intestate succession is of less interest to the economist than to the lawyer. 1 If there are no children, the widow gets the whole estate, if this is worth less than £500, and a first charge of £500, if it is worth more. Apart from this first charge, she gets a third or a half of the personalty, according as there are, or are not, children, and in either case, a life interest in a third of the realty. A widower, if his wife dies intestate, takes all her personalty, and, subject to certain conditions; a life interest in all her realty. (Topham, op. cit., pp. 125–131). * Registered land in Ireland descends as personalty, and "when the work of the Land Purchase Acts has been completed, practically the whole land of Ireland will be registered." (Morgan, New Irish Constitution, pp. 213-4). • See Chapter X. below. CHAPTER VII THE COMPARATIVE EFFECTS OF THE NON-FISCAL LAW OF INHERITANCE. §1. Certain broad conclusions may be drawn as to the comparative effects of the various forms of the nonfiscal law of inheritance upon the inequality of incomes from inherited property and upon the community's productive power. In primitive societies, where property belongs not to the individual but to the family or tribe, and where the will is unknown, both inequality and productive power will generally be small. But no great importance attaches to this case in the study of modern conditions. Passing to the case of individual property and of actual restrictions on freedom of bequest, we may distinguish the effects of different types of restriction. §2. Actual restrictions in respect of purpose are probably beneficial to production, but without much effect on inequality. As regards actual restrictions in respect of time, the Rule against Perpetuities probably tends both to increase production and to diminish inequality. But the Rule against Accumulations is of much more doubtful economic expediency. For it prohibits saving in certain cases in which, but for its operation, an exceptionally large amount of saving would have taken place. It also tends, probably, to diminish inequality, but the gain from this appears to be less certain and less important than the loss inflicted on production by the check to saving. §3. Passing to the more important question of the effects of restrictions in respect of amount, it is often supposed that substantial freedom of bequest is certain to cause greater inequality than most forms of the law of legitim. This idea was in the minds of the legislators who introduced the legitim in France after the Revolution,1 and has been accepted by various writers in more recent times. But this idea is not necessarily correct. The law of legitim establishes the legal right of certain relatives to a considerable part of a dead person's property, with the result that only part of this property may be left by will to those not entitled to succeed under the law of legitim, whether to persons outside the favoured circle of relatives or to educational or charitable institutions. The comparative effects upon inequality of substantial freedom of bequest and of the law of legitim depend, therefore, on fact and custom rather than law and, in the absence of knowledge as to such fact and custom, it is impossible to say which of the two types tends to cause the greater inequality. If it were the wish of all testators to leave all their property, of which they could dispose by will, to their eldest sons, the law of legitim would tend to diminish inequality. If, on the other hand, it were the wish of all testators to leave a large part of their property to poor friends, who were not related to them, or to educational institutions or hospitals, or even to public authorities, the law of legitim would tend to increase inequality. Further, if we assume that under freedom of bequest testators would generally distribute their property exclusively among their relatives and that this distribution would be more unequal than under the law of the legitim, the greater inequality attributable to freedom of bequest. would often be less than might be supposed. For the 1 Compare Cambridge Modern History, Vol. VIII., pp. 729–731. See, e.g., Minghetti, Dalla Economia Pubblica e delle sue Allinenze colla Morale e col Diritto, pp. 470 A. birth-rate among rich families is generally much lower than among the population at large. In view of this fact, Professor Rignano rightly points out that the law of legitim exercises only a very small diffusive effect upon great fortunes, and that it may even increase inequality, as, for instance, when an only child inherits, under the law of legitim, both from his parents and from his unmarried or childless relatives. Where, however, the number of children is large, as is often the case with small fortunes, the law of legitim will tend to produce less inequality than freedom of bequest. But this effect will not be important, since existing inequalities depend very much more upon the existence of large fortunes than upon the degree to which small fortunes are subdivided. Mill's proposal to limit the amount, which any one individual may receive by inheritance or gift, has not yet been embodied in any actual legal system. The imposition of such a maximum limit would obviously 1 In Socialisme en Harmonie avec la Doctrine Economique Liberale, P. 20. Compare Sella, La Vita della Ricchezza, p. 62. Professor Irving Fisher thinks, on the other hand, that if there is an equal distribution among the children of the rich, the fortune is pretty sure to run itself out in a few generations or centuries, (Elementary Principles of Economics, p. 491). • Compare Séailles, La Répartition des Fortunes en France, p. 67. But it is interesting to notice that such a scheme was approved in 1886 by the Illinois Bar Association, and introduced in the form of a Bill, which, however, failed to pass, in the Illinois State Legislature in 1887. Under this Bill the maximum amount, which under any one will or intestacy a surviving spouse or child of the testator might inherit, was fixed at £100,000, or 1,500 acres of land, and which any other person might inherit at £20,000. These limits did not apply to educational or other benevolent bequests. Gifts made with the object of defeating the law were to be void. The supporters of this Bill claimed that it would apply only to those " abnormally large fortunes " which, under the existing law. menace the political power of the State and that their recommendation is in harmony with the spirit of our institutions, and in the same direction as the present laws against perpetuities and entailments." See Ely, Taxation in American States and Cities, pp. 319, 515–532. " |