History of Money

Built to Last Forever: A History of Estates

The word estate first meant a person's rank. In England that rank came from land, and families used the law to keep the land in one line of heirs. Taxes at death broke many of those estates up. The ones that remain are now held by charities, companies and trusts.

One part 15 minutes Education, not advice

What the episode covers

The word. Estate comes from the Latin status. In English it meant rank in the 1200s, property by the late 1300s, a large piece of land from the 1620s, and everything a dead person leaves from 1830.
Keeping land in one line. The eldest-son rule, the entail, and the strict settlement, which made the owner a life tenant who could not sell. The Longbourn entail in Pride and Prejudice is the example most readers know.
Taxes at death. Britain's estate duty began in 1894 at rates up to 8 percent and reached a top rate of 80 percent by 1950. The United States created its modern estate tax in 1916.
Chatsworth. The tenth Duke of Devonshire handed his estates to his heir in 1946 and died in 1950, about three months before the gift would have escaped estate duty. Settling the bill took 17 years.
The houses that were lost and the ones that found work. About 1,200 English country houses were demolished from 1900. Longleat, Highclere Castle, Biltmore and Graceland opened to paying visitors.
An estate that was mostly a name. Michael Jackson's estate valued his image and likeness at $2,105. The IRS said about $434 million. The US Tax Court found about $4.15 million.
An estate held in trusts. The Grosvenor family's London land, which came into the family by a marriage in 1677, is owned by trusts. No inheritance tax was charged on it when the sixth Duke of Westminster died in 2016. Grosvenor says most of the trusts pay a charge of 6 percent every 10 years instead, which is itself a form of inheritance tax.

This is history, not planning advice. The episode describes how particular families and estates were taxed and held. Tax rules differ by country and change over time. Nothing here is a recommendation about how to hold or pass on your own property.

Sources

Estate of Michael J. Jackson v. Commissioner, T.C. Memo. 2021-48, US Tax Court, filed May 3, 2021.
IRS Statistics of Income, “The Estate Tax: Ninety Years and Counting,” Jacobson, Raub and Johnson, 2007.
John Beckett and Michael Turner, “End of the Old Order? F. M. L. Thompson, the Land Question, and the burden of ownership in England, c.1880–c.1925,” Agricultural History Review 55:II, 2007.
Hansard, House of Commons, 6 April 1949, on the history of death duties.
Obituaries of the 11th Duke of Devonshire, The Times, 4 May 2004, and The Independent, 6 May 2004; TIME, 26 August 1957.
Chatsworth, Highclere Castle, Biltmore, Graceland and Grosvenor, each estate's own published history.
Survey of London, volume 39, on the Grosvenor estate in Mayfair.
Giles Worsley, England's Lost Houses, 2002, for the demolition count.
CKX, Inc., annual report filed with the SEC, 2005, for the Elvis Presley Enterprises sale.
Jane Austen, Pride and Prejudice, 1813.

For how wills and trusts work today, see How Estates Actually Transfer. For the older legal history of the trust, see The Dead Hand in the Transfer Desk series.