Estate Planning Legal Topics New Legal Developments

Does a Class Gift to Children Include Adult Adoptees?

The Probate Code says no, in most cases, but a recent court decision said yes. Here’s what happened in Sanders v Yanez (July 30, 2015, H041578) 2015 Cal App Lexis 662.

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:

© The Regents of the University of California, 2015. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

13 replies on “Does a Class Gift to Children Include Adult Adoptees?”

The Sanders trust specifically included “adopted children” as members of the class unlike the trust in DeLoreto.

Probate Code sec. 21102 provides (a) The intention of the transferor as expressed in the instrument controls the legal effect of the dispositions made in the instrument. (b) The rules of construction in this part apply where the intention of the transferor is NOT indicated by the instrument.

Probate Code §21115(b) doesn’t apply because the testator indicated a wish to include adopted children -not limited to minors-as issue. At the time of the will, California allowed for the adoption of adults and defined the ensuing relationship as “parent-child.” A testator is presumed to know the law and intend legal definitions to apply. Applying §21115(b) would be intent defeating in light of the specific provision including adopted children.

Susan Wallace makes the best case for the Sanders decision. But the court does not make the case for itself, so we don’t know what the court’s reasoning was or whether it considered the issue.

The argument assumes that testator intended “adopted children” to include adult adoptees. That’s not obvious. It takes some explaining why we would make that assumption when the statute incorporates the opposite assumption that the class of adopted children does not include adult adoptees. The clause may be seen as confirmatory that the class of children includes adopted children. We don’t know what the testator intended. Hence the statute.

Further research reveals that it was the decision in DeLoreto that was erroneous. The reason why the court in Sanders v. Yanez did not discuss Probate Code sec. 21115(b) is due to the fact that the testator died in 1976. In DeLoreto, the testator died in 1966. Probate Code sec. 6103 provides that Probate Code sec. 21101-21140 do not apply where the testator died before 1985.

Probate Code §6103 was enacted in 1984 and reenacted in 1990. It is superseded with respect to Prob C §21115 by Prob C §21140, enacted in 1994. Section 21140 provides: “This part applies to all instruments, regardless of when they were executed.” Section 6013 states that certain parts of the Probate Code (including this part) do not apply where the testator died before January 1, 1985, “except as otherwise specifically provided.”

According to legislative history, the rules of construction enumerated in Probate Code sec.21101 et sec. apply to testamentary instruments, whenever executed, so long as the testator dies on or after 1/1/1985.

Prob. Code sec. 21140 (a)&(b) was added when the rules of construction were amended and renumbered in 1994. Section 21140(b) provided that the rules did not apply if the testator died before 1/1/1985.

In the same 2002 chaptered bill, both section 6103 and 21140 were amended. The amendment dropped subsection b from 21140 and corrected the reference to the renumbered rules of construction in section 6103. Stats. 2002 ch. 138, secs. 6 & 41.

The Law Revision Commission comments state: “2002-Sec.6103 is amended to correct a cross-reference. Former Chapter 5 (rules of construction of wills) has been repealed and is superseded by sections 21101-21140 (rules of interpretation of instruments).” The Legislature would not have included the reference to the rules of construction had they wished to exempt them from the application of section 6103.

So, DeLoreto erroneously referred to Prob. C. sec.21115(b) and Sanders v. Yanez had no reason to refer to an inapplicable rule.

The Law Revision Commission recommendation states in relevant part (31 Cal L Revision Comm’n Reports 167, 185 (2001)):

Section 21140(b) creates an exception to retroactive application of the rules of construction in a case where Sections 1050-1054 would have applied to a decedent who died before January 1, 1985. This provision is no longer necessary. The statutes it refers to have relevance to very few cases [fn. Sections 1050-1054 dealt with the effect of an advancement to an heir in determining the heir’s intestate share], and the likelihood of such an issue arising in the future with respect to a pre-1985 decedent is remote. In the interest of simplification of the law, the provision should be repealed.

Section 21140(b) was duly repealed by Stats 2002, ch 138, §41. Hence, the Prob C §21115 presumptions now apply for all purposes to construction of instruments regardless of when the instrument was executed or when the testator died. However, it’s fair to suggest that the testator in Sanders (i.e., the grandparent) probably would have intended the adopted child to have the trust property on the stated facts. But the statute provides otherwise.

The above comment fails to note or address the fact that, at the same time and in the same bill, Section 21140(b) was deleted AND Section 6103 was amended to specifically apply to Prob. Code sections 21101-21140. Stats. 2002 ch. 138. This indicates a clear intention to make Section 6103 apply to the rules of construction.

However, no doubt Mr. Denham, Esq. will disagree.

Section 6013 states: “Except as expressly provided,” section 21101-22140 do not apply, etc. However, Prob C §21115(d), as amended by Stats 2002, ch 138, §24, provides: “The rules for determining intestate succession under this section are those in effect at the time the transfer is to take effect in enjoyment.” The CLRC comment states: “As a general principle, the rules of construction apply retroactively to all instruments, regardless of the date of execution. This is consistent with the purpose of rules of construction, which apply in circumstances where the intent of the maker of the instrument cannot be ascertained. It is also consistent with the general approach of the Probate Code to apply new law except where it would create substantial injustice.”

Having just eliminated the former exceptions in §21140(b) for decedents dying before 1985, and clarified the retroactive application of §21115, it seems highly unlikely that the legislature intended to narrow the application of §21115(b), when there is no reference to such an intention in the CLRC recommendation. In any event, there is no discussion of this possible interpretation in Sanders, or in DeLoreto or Ehrenclou, both of which were decided after the 2002 amendments.

p.s. Susan Wallace raises an interesting point, although DeLoreto remains binding precedent that Prob C §21115 applies with respect to wills executed by testators dying before 1985. More to the point, the limiting interpretation of Prob C §6103 would only mean that prior law would continue to apply. Here it’s fair to say that Prob C §21115(b) is consistent with prior case law in recognizing a carve-out for adult adoptees with an exception for children taken into the adoptive parent’s home as minors. See Estate of Joslyn (1995) 38 CA4th 1428; Estate of Pittman (1980) 104 CA3d 288.

Add your comment to the blog post

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s