Decedent’s will was executed in California and prepared by a California attorney. Decedent’s will placed most of her separate property in the Trust and provided that Daughter would receive the income from the Trust during her lifetime.
On Daughter’s death, the Trust assets were to be distributed “for the benefit of the then living issue” of Daughter. If Daughter had no living issue surviving her, a grandchild of Decedent’s husband was to become the income beneficiary of the Trust for her lifetime with remainder to charity. The will provided:
The word “issue” as used in this Will shall refer to lawful lineal descendants of all degrees and shall include legally adopted children.
When Decedent executed her will in 1975, Daughter was 26 years old, living in Arizona, and intending to marry and move to Minnesota. Decedent was aware of Daughter’s plans. Decedent died in 1976. Decedent’s husband died in 1988, and Daughter succeeded him as cotrustee.
In 2013, Daughter, who resides in Texas, adopted Child, who was then an adult. Child is the biological son of Daughter’s “close friend” and Daughter has known him “since he was a child.” The Texas adoption order provided that Child “is henceforth the son of [Daughter] for all purposes.”
In 2014, Daughter filed a petition as cotrustee seeking a determination that Child was the successor beneficiary of the Trust. The probate court held that the Texas adoption did not make Child Daughter’s issue, because a Texas adoption did not impose the same mutual parent-child obligations that exist under California law. The court of appeals reversed.
Under California law, the status of an adopted child is determined by the laws of the state in which the adoption was effected. Child’s Texas adoption created a parent-child relationship between him and Daughter. Because Decedent’s 1975 will expressly included “adopted children” within its definition of “issue,” Child qualifies as Daughter’s issue.
The court distinguished Ehrenclou v MacDonald (2004) 117 CA4th 364, in which the court held that persons adopted as adults in Colorado by the settlor’s daughter were not entitled to receive the remainder of the trust on the daughter’s death. In Colorado, an adopted adult becomes the heir at law of the adopting parent but is not otherwise the child of the adopting parent.
Here’s the problem:
Probate Code §21115(b) provides in relevant part:
“In construing a transfer by a transferor who is not the adoptive parent, a person adopted by the adoptive parent shall not be considered the child of that parent unless the person lived while a minor (either before or after the adoption) as a regular member of the household of the adopting parent or of that parent’s parent, brother, sister, or surviving spouse.”
Under Prob C §21140, the statute “applies to all instruments regardless of when they were executed.” The Sanders decision doesn’t address the statute or explain why it doesn’t apply.
Practitioners should be cautious in assuming that another court would follow Sanders. For a similar case in which the court applied the statute, see Estate of DeLoreto (2004) 118 CA4th 1048. The DeLoreto decision better reflects current California law.
For more on class gifts to children and issue, turn to CEB’s California Will Drafting §§12.27–12.34B. Also check out CEB’s Drafting California Revocable Trusts §18.9 on the limited effect of a choice-of-law provision on construction of trusts as illustrated in Ehrenclou.
Other CEBblog™ posts you may find interesting:
- Protecting Digital Assets: 6 Steps to Take on Death or Incapacity
- Trust Property for Cats Sold to Pay for Settlor’s Care
- Codicil vs. New Will
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