Words matter when making a will or trust. Any ambiguity in the meaning of your estate planning documents may lead to protracted litigation among your family members or other designated beneficiaries. And even in cases where you think you are being clear, different courts may look at the meaning of certain words differently. This is especially true when your estate plan is enforced in more than one state.
For example, a California appeals court recently had to determine the meaning of the phrase “adopted children” in a trust. On the surface this does not sound too difficult, yet probate courts in California and Texas disagreed as to how to define this term.
The case centered around a 1975 will executed by a woman then residing in California. She had one daughter with her then-husband. Upon the woman's death, which occurred in 1976, most of her property went into a testamentary trust. The trust's income goes to the daughter during her lifetime. Upon the daughter's death, the trust would terminate and its remaining assets distributed among her “then living issue.” The trustee may also make payments out of the trust's principal during the daughter's life for the benefit of her or “any issue.”
The word “issue” is commonly used in estate planning and other legal documents to refer to a person's lineal descendants, i.e. children, grandchildren, great-grandchildren and so forth. As used in the will here, “issue” also includes any “legally adopted children” or other descendants.
In 2013, the daughter, who was living in Texas, adopted the adult son of a close friend. A Texas court declared the man the daughter's son “for all purposes.” The daughter subsequently filed a petition in California probate court seeking a declaration the newly adopted son was her “issue” and therefore a beneficiary of the mother's trust.
The probate court rejected the daughter's request. It held the mother never intended “the term 'issue' in her will to include adopted adults whose adoptive status lacked essential elements of what such status would entail under California law.”
On appeal, the Sixth District Court of Appeal in San Jose reversed the probate court's decision. The Sixth District noted the probate court's decision relied heavily on a 2004 decision by the Fourth District Court of Appeal in San Diego, which held two adults adopted by a trust beneficiary in Colorado were not “issue” entitled to share in the trust. In that case, the Fourth District noted Colorado's adult adoption law failed to create the same “mutual support obligations” between parent and child as required by California law. In the present case, the Sixth District observed the Texas adoption was different because it unambiguously treated adopted adults the same as any other adopted child, whereas the Colorado law only defined an adopted adult as a “child” for purposes of inheritance. And in any event, the Fourth District said, “California cannot devalue a parent-child relationship simply because it was created, whether by biology or adoption, in a sister state that imposes different rights and duties as parts of parent-child relationships subject to its jurisdiction.”
The Sixth District's decision highlights how different courts may view similar sets of facts. Even common words like “issue” may take on different meanings depending on the circumstances. If you need advice on how to avoid potential problems with your own estate plan, contact the Law Office of Scott C. Soady in San Diego today.