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Armstrong v. Hixon, 206 S.W.3d 175 (Tex. App. – Corpus Christi 2006, pet. filed).

Trusts

Determination of Class Gift Membership

Settlor created a testamentary trust with the remainder beneficiaries being the “descendants” of his brother’s children.  Before the trust terminated, some of the brother’s descendants brought a declaratory judgment action to disqualify a person adopted as an adult by one of the brother’s children.  The appellate court affirmed the trial court’s determination that the adopted adult did not qualify as a descendant.

The court based its decision on the law as it existed in 1964 when Settlor executed his will.  The court said that under that law, an adopted adult could not inherit through adopted parents, only from them, and thus the adopted adult was not a “descendant” for purposes of the trust.

Comment:  Several aspects of this case are, in my opinion, highly problematic.

1.      The court discusses a second codicil to the Settlor’s will which was written in 1997, eleven years after Settlor’s death in 1986.

2.      The court recognizes, but then ignores, the principle of republication.  The court acknowledges that a codicil causes the will to be treated as one instrument speaking from the date of the codicil but then continues to apply the law as it existed on the date Settlor executed the original will (1964), not the codicil.  The court does note that it believed the law as of the date of the codicil (1977) was the same.

3.      The court relies heavily on intestate statutes which indicate when an adopted adult may be considered an heir and from whom this person may inherit.  The court confuses how to define the word “descendant” when used in a will or trust with the term “heir” as found in intestate statutes.  The court quotes and then ignores the Texas Supreme Court case of Lehman v. Corpus Christi Nat’l Bank, 668 S.W.2d 687, 688 (Tex. 1984), in which the court explained that “an adopted adult was ‘for every purpose, the child of his parent or parents by adoption as fully as though born of them in lawful wedlock.’”

Moral:  A testator or settlor should expressly state whether adopted individuals are within a class gift such as “children” or “descendants,” and whether there are any conditions to qualify as a class member such as being adopted while a minor.

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