Court Opinion

ID: 9586103
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:07:12.611242+00
Date Added: 2024-06-11T17:24:20.385229
License: Public Domain

Fletcher, Presiding Justice,
dissenting.
Settlor Joe Marion Beutell, Jr., created an inter vivos trust in 1988 for the immediate benefit of his daughter and her children. He died later that year, and the trust was funded with a $300,000 bequest in his will. At the time, his daughter had four living children. The issue in this case is whether the grandchildren’s rights as beneficiaries under the trust terminated when they were adopted outside the family after the trust was created and funded. Because the minor children’s rights under their grandfather’s trust vested in 1988, their subsequent adoption outside the family did not divest them of these vested interests. Therefore, I dissent.
Both the trust instrument’s language and case law support the conclusion that the four children obtained vested interests in 1988 that did not divest upon their adoption. Item two of the trust agreement gives the trustee broad discretion to use both the principal and interest “for the education, maintenance, and support of the daughter of Grantor, NANCY JEAN BEUTELL HALL, and the descendants of NANCY JEAN.” The instrument makes clear that the settlor recognized that there was more than one beneficiary of the trust, despite explicitly naming only his daughter. Item two concludes: “As to the named beneficiaries Grantor intends no priority and does not intend the Trustee to distribute income equally or to conserve capital for unborn descendants.” Item three provides further support that the settlor intended for his grandchildren to receive immediate distributions from the trust for their education, maintenance, and support. On termination of the trust, the trustee was directed to deduct each beneficiary’s encroachments on the principal before distributing the remains of the trust.
Thus, there is no support for the majority opinion’s conclusion *817that the settlor intended to divest his grandchildren of their rights when adopted outside the family. The settlor indicated his intent for the trustee to pay for the maintenance and support of Nancy Jean’s living descendants as soon as the trust was funded. He never directed that their rights to the trust’s principal and income would terminate upon their adoption outside the family. And, contrary to the majority’s assertion, we cannot rely on the rule that a settlor is presumed to know the adoption law to divest children of existing rights. Neither Thomas v. Trust Company Bank6 nor any of its progenitors have applied that rule to extinguish rights that vested when the trust became operative; instead, they refer to the adoption statute or other types of statutes in effect when the trust was executed to define the class of beneficiaries who benefit when their rights finally vest. Here it is not necessary to refer to the adoption law to determine the class of beneficiaries because none of the children had been adopted when the trust became operative. Further, the directive that the trustee should try to prevent any principal or income from going to Nancy Jean’s past or present husband simply indicates the settlor’s intent towards his daughter’s spouse; it does not negate the evidence that the settlor intended the trust to immediately benefit Nancy Jean and her living children.
Not only does the majority misconstrue the settlor’s intent, but it also wrongly applies the state’s adoption statute to divest the adopted grandchildren of rights that vested before their adoption. OCGA § 19-8-19 provides that an adoption decree makes the adopted individual a stranger to his former relatives “for all purposes, including inheritance and the interpretation or construction of documents, statutes, and instruments, whether executed before or after the adoption is decreed.” Despite the majority’s interpretation, this provision does not sever all of the adopted person’s property rights stemming from a class gift, but only those property interests that have not vested.7 None of the foreign cases that the majority cites involves children with a vested interest.8 In contrast, the children in this case *818had a vested right — a right to immediate possession of the property — for at least four years before their adoption.9
By its opinion, the majority ignores that from the time the trust was created and funded in 1988 these children had a present right to both income and corpus for their education, maintenance, and support. While the trustee had broad discretion as to the amounts to pay out for these purposes, this discretion did not diminish the children’s present vested rights. The only uncertainty was the amounts to be used for these purposes, as a trustee cannot defeat the purposes of the trust by refusing to exercise discretion.10 And a court of equity may control discretion when the trustee fails to act or arbitrarily declines to exercise discretion. 11
The relative limited funding for the trust means it could be consumed before the termination provisions of item three come into play. This conclusion is supported by the language in item two that the settlor did not intend any priority among the beneficiaries and did not want the trustee to distribute the income equally or to conserve the capital for the unborn. Under these facts, the issue of vested rights should focus on the present possessory right rather than on any possible remainder created by item three, as the majority opinion does.
Nevertheless, a review of the children’s remainder rights as created by item three shows that they also vested when the trust became operative in 1988. Remainders are either vested or contingent. A contingent remainder is subject to a condition precedent; that is, a certain event must occur before either the right to take or the person or persons entitled to take is determined. All other remainders are vested, absolutely vested if no conditions are attached, and, if they have a condition subsequent, they are vested subject to divestment, either partially or totally.12 The law favors the early vesting of remainder interests and vesting of remainders in all cases of doubt.13
Here, the class of Nancy Jean’s living descendants not only takes a present interest in the trust’s principal and income for its education and support, her descendants also have a fixed and absolute right to the future enjoyment of the property. Their share of the trust may be *819diminished should Nancy Jean have additional children, but the birth of additional descendants would not divest them of their vested remainder rights.14 Under the trust instrument, the rights of the beneficiaries were subject to being divested only if the individual died before the trust terminated as provided in item three. Contrary to the majority opinion’s conclusion, neither event would change the interests of Beutell’s grandchildren from a vested right into a contingent one.15 “It is not the uncertainty of enjoyment in the future, but the uncertainty of the right of enjoyment, which makes the difference between a ‘vested’ and a ‘contingent’ interest.”16
Decided March 8, 1999 —
Reconsideration denied April 2,1999.
Lefkoff, Duncan, Miller, Grimes & Miller, Joseph Lefkoff, Donna G. Barwick, James W Beverage, Nancy Wiggins-Lester, for appellant.
Lefkoff, Duncan, Miller, Grimes & Miller, Joseph C. Miller, pro se.
Kilpatrick Stockton, A. Kimbrough Davis, J. David Hopkins III, Salo & Walker, Ann D. Salo, for appellees.
Salo & Walker, Melissa P. Walker, pro se.
In conclusion, the adoptions in 1992 and 1996 did not divest the adopted individuals of their vested rights as beneficiaries of their grandfather’s trust. In 1988, they acquired vested rights to both a present interest in the trust’s income and corpus and a remainder interest in the trust’s funds when the trust terminated. Since the majority opinion ignores the settlor’s intent not to distinguish among his four grandchildren and harms the law on vested interests under wills and trusts, I dissent.
I am authorized to state that Justice Sears and Justice Hunstein join in this dissent.

 247 Ga. 693 (279 SE2d 440) (1981).

 See Menard v. Fairchild, 254 Ga. 275, 276 (328 SE2d 721) (1985) (holding that child’s adoption after his birth father’s death did not diminish his vested right to recover -workers’ compensation); Emory University v. Dorsey, 207 Ga. App. 808, 808-809 (429 SE2d 307) (1993) (holding that adoption of child after death of birth mother did not terminate adopted child’s right to bring a wrongful death action).

 See In re Estate of Russell, 95 Cal. Rptr. 88 (Cal. App. 1971) (excluding child bom after testator’s death based on term of will that “child,” “issue,” and “descendant” did not include children legally adopted after testator’s death); In re Will of Martell, 457 So. 2d 1064 (Fla. App. 1984) (finding adopted individual had no vested right in testamentary trust when his expectancy at time of his adoption depended on him surviving his natural grandfather and mother); In re Estate of Best, 485 N.E.2d 1010 (N.Y. 1985) (excluding child born and adopted more than 20 years before the trust was created); Crumpton v. Mitchell, 281 S.E.2d 1 (N.C. *8181981) (holding no violation of due process when adopted children denied a contingent interest in property).

 See Walters v. Suarez, 188 Ga. 190,194 (3 SE2d 575) (1939) (construing the remainder as vested based on the testator’s language that his executors could advance to his children a part of his estate to be charged to the beneficiary’s interest surd to be accounted for in the final division of the estate).

 Prince v. Barrow, 120 Ga. 810 (48 SE 412) (1904).

 C & S Nat’l Bank v. Haskins, 254 Ga. 131, 141-142 (327 SE2d 192) (1985).

 See William H. Agnor, Future Interests: The Law in Georgia § 1.5 (1979).

 See OCGA § 44-6-66.

 See Lanier v. Lanier, 218 Ga. 137, 142 (126 SE2d 776) (1962); OCGA § 44-6-65.

 See id. at 142-144 (holding testamentary trust created vested interest in son’s then-living children, subject to being opened for later-bom children and subject to divestment if the children did not survive their father); Britt v. Fincher, 202 Ga. 661, 662-664 (44 SE2d 372) (1947) (describing three classes of vested remainders including remainders to a class “that is subject to open and take in additional remaindermen after the time the estate becomes vested” and vested remainders “subject to be thereafter divested upon the happening of a contingent event”); Restatement of Property § 157 cmt. c (1936).

 Black’s Law Dictionary 1402 (5th ed. 1979).