June 20, 2012
Authored by: Luke Lantta
We often see litigation over the inheritance rights of children adopted into a family. But what about the converse? What about the inheritance rights of children adopted out of a family?
In In the Matter of the Cecilia Kincaid Gift Trust for George, the Supreme Court of Montana considered this question under Montana law.
An irrevocable inter vivos trust was established for the benefit of George Kincaid. George was the sole beneficiary during his lifetime. Upon George’s death, the trust corpus was to be distributed to George’s “living descendants.” The trust instrument defined “descendants” as:
lawful blood descendants in the first, second or any other degree of the designated ancestor; provided, however, that an adopted child and the lawful blood descendants of any such adopted child shall for all purposes be regarded as the lawful blood descendants of the adopting parent or parents and of anyone who is by blood an ancestor of the adopting parent or of either of the adopting parents, and such adopted child and any said descendants of such adopted child shall not be regarded as the descendants of either natural parent of such adopted child.
Jennifer Fazio is the natural child of George. She was born after the trust was established and given up for adotpion when she was a small child. The trial court determined that Jennifer, as a “lawful blood descendant” of George, should be included in the trust distribution.
The trustees of the trust, however, appealed contending that the adopted child clause in the trust made no distinction between children adopted into or out of the family. The trustees’ argument was that any adopted child is deemed to be a descendant of the child’s adopting parent. Thus, Jennifer should be deemed to be a child of her adoptive parents and not a descendant of George.
The Montana Supreme Court agreed with the trustees. The trust language is not ambiguous. To reach the trial court’s result, you have to add language to the trust distinguishing between children adopted into or out of the family.
In the trust instrument, however, there is no distinction between children adopted into the family and children adopted out of the family. Any adopted child is deemed to be the descendant of his or her adoptive parents for purposes of the trust. Therefore, Jennifer was not a descendant of George under the trust.