Court Opinion

ID: 890148
Source: CourtListenerOpinion
Date Created: 2013-06-05 06:28:10.177529+00
Date Added: 2024-06-11T15:08:04.984292
License: Public Domain

May 29 2012

                                    DA 11-0695

          IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   2012 MT 119

IN THE MATTER OF THE CECILIA
KINCAID GIFT TRUST FOR GEORGE

APPEAL FROM:     District Court of the Eighth Judicial District,
                 In and For the County of Cascade, Cause No. BDP 10-205
                 Honorable Julie Macek, Presiding Judge

COUNSEL OF RECORD:

          For Appellants:

                 Greg A. Luinstra; Luinstra & Young, P.L.L.C., Great Falls, Montana
                 Stuart F. Lewin; Lewin Law Office, Great Falls, Montana
                 (Attorneys for Gloria LaMott and Glenn Kincaid, Jr.)

          For Appellee:

                 Kirk D. Evenson; Marra, Sexe, Evenson & Bell, Great Falls, Montana
                 (Attorney for Jennifer Fazio)

                                             Submitted on Briefs: April 5, 2012

                                                         Decided: May 29, 2012

Filed:

                 __________________________________________
                                   Clerk
Chief Justice Mike McGrath delivered the Opinion of the Court.

¶1    Gloria LaMott and Glenn Kincaid, Jr., appeal from the District Court’s September

6, 2011 order concerning the distribution of the proceeds of the Cecilia Kincaid Gift

Trust for George. We reverse.

¶2    The issue on appeal is whether the District Court properly concluded that Jennifer

Fazio is entitled to a distribution from the Trust as a descendant of George Kincaid under

the Gift Trust document.

                 PROCEDURAL AND FACTUAL BACKGROUND

¶3    In December, 1976, Cecilia Kincaid Bates, grantor, and Co-Trustees George W.

Kincaid and Richard E. Peterson entered into a trust agreement establishing the Cecilia

Kincaid Gift Trust for George. George was Cecilia’s son. The Trust was an irrevocable

intervivos trust and George was the sole beneficiary of the Trust during his lifetime.

George passed away on October 15, 2009, intestate. By the terms of the Trust, George’s

death was the triggering event for appointment of a new co-trustee, for termination of the

Trust, and for distribution of the remaining assets. The current Co-Trustees of the Trust

are Gloria LaMott and Glenn Kincaid, Jr.

¶4    On November 3, 2010 the Co-Trustees filed a Final Account, Petition for

Settlement, Distribution, and Termination of the Cecilia Kincaid Gift Trust for George.

On December 1, 2010 Jennifer Fazio, formerly known as Stacey Jean Kincaid, objected

to the Trustees’ petition, which proposed that she receive no distribution from the Trust.

Jennifer is the natural child of George Kincaid. She was born after the Trust was

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established and was given up for adoption when she was a small child. The District

Court considered the briefs of the parties and determined that Jennifer was properly

entitled to distribution of the Trust proceeds.

¶5     The issue in this case is whether Jennifer is the rightful beneficiary of the Cecilia

Kincaid Gift Trust for George. Article IV, § 3 of the Trust provides that upon George’s

death any remaining funds in the Trust are to be distributed to George’s “living

descendants.” The Trust defines “descendants”:

       As used herein, the term “descendent” or “descendents” shall mean 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 descendant of
       such adopted child shall not be regarded as the descendants of either natural
       parent of such adopted child.

Kincaid Trust for George, Article XIII, § 3.

¶6     The District Court determined that Jennifer, as a “lawful blood descendant” of

George Kincaid, should be included in the Trust distribution. The Trustees appeal.

                                STANDARD OF REVIEW

¶7     The interpretation of a trust agreement is a question of law that this Court reviews

for correctness. In re: Marjorie Q. Ward Revocable Trust, 2011 MT 308, ¶ 10, 363

Mont. 72, 265 P.3d 1260; In re: The Charles M. Bair Family Trust, 2008 MT 144, ¶ 32,

343 Mont. 138, 183 P.3d 61. This Court construes the words of a trust instrument in their

ordinary grammatical sense, absent evidence of a clear intent otherwise. Bair Family

Trust, ¶ 32. The plain language of the trust instrument is controlling. Ward, ¶ 21.

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                                     DISCUSSION

¶8     The resolution of this case depends upon whether Jennifer Fazio is George’s

“descendant” as that term is defined in the Trust instrument. If so, she has a claim to the

remaining proceeds of the Trust. The District Court construed Art. XIII, § 3 of the Trust

to define George’s descendants as “lawful blood descendants,” which clearly includes

Jennifer. The District Court further construed the “adopted child” language to describe

only children who were adopted into the family by George. The Trustees contend,

however, that the adopted child language makes no distinction between children adopted

into or out of the family. The Trustees contend that under the plain language of the Trust

any adopted child is deemed to be a descendant of the child’s adopting parent, and not a

descendant of the child’s natural parent. The Trustees contend that for the purposes of

the Trust, Jennifer is deemed to be a child of her adoptive parents and is not a

“descendant” of George.

¶9     The language of the Trust instrument is not ambiguous. We conclude that the

plain language of Art. XIII, § 3 makes no distinction between children adopted into the

family and children adopted out of the family. The plain language describes any adopted

child, and an adopted child is deemed to be the descendant of its adoptive parents for

purposes of this Trust.    The Trust can only be construed to include Jennifer as a

descendant of George by adding language making a distinction between children adopted

into the family and those adopted out of the family. This language is not in the Trust

instrument and may not be added, nor may the language be re-written. Mary J. Baker

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Revocable Trust v. Cenex Harvest States, Coops. Inc., 2007 MT 159, ¶ 30, 338 Mont. 41,

164 P.3d 851.

¶10    A court may not properly add language when interpreting a trust instrument, § 1-4-

101, MCA, but must apply the plain language. Bair Family Trust, ¶¶ 40, 53; Ward, ¶ 21.

The plain language of the Trust provides that any adopted child is to be deemed a

descendant of the child’s adoptive parents. Jennifer is not a descendant of George under

the Trust because she was adopted and is therefore deemed to be “regarded as the lawful

blood descendant[ ] of the adopting parent or parents.”

¶11    The decision of the District court is therefore reversed and this matter is remanded

for further proceedings consistent with this opinion.

                                                 /S/ MIKE McGRATH

We concur:

/S/ BETH BAKER
/S/ PATRICIA COTTER
/S/ MICHAEL E WHEAT
/S/ JIM RICE

Justice James C. Nelson, dissenting.

¶12    Respectfully, I dissent from the Court’s Opinion. While the Court concludes that

the Trust instrument is not ambiguous, Opinion, ¶ 9, I conclude that it is. Accordingly, I

would vacate the District Court’s decision and remand for further proceedings.

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¶13    As the Court notes at ¶ 5 of the Opinion, Article IV, Section 3 of the Trust states

that upon George’s death, any remaining funds in the Trust are to be distributed to

George’s “then living descendants.” Article XIII, Section 3, in turn, defines the term

“descendant” as follows:

       As used herein, the term “descendant” or “descendants” shall mean 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 descendant of
       such adopted child shall not be regarded as the descendants of either natural
       parent of such adopted child.

¶14    An ambiguity exists when the language of an instrument is reasonably susceptible

to more than one interpretation. Ophus v. Fritz, 2000 MT 251, ¶ 23, 301 Mont. 447, 11

P.3d 1192; Mary J. Baker Revocable Trust v. Cenex Harvest States, Coops., Inc., 2007

MT 159, ¶ 19, 338 Mont. 41, 164 P.3d 851. Here, the term “adopted child” is reasonably

susceptible to three different interpretations. “Adopted child” could reasonably mean a

child that was adopted into the family; it could reasonably mean a child that was adopted

out of the family; or it could reasonably mean both. The ambiguity arises from the fact

that it is not clear what Cecilia, the Grantor, intended in her use of the phrase “adopted

child.”1

¶15    The relevant language of Article XIII, Section 3 of the Trust states that an adopted

child shall be regarded as the lawful blood descendant of the adopting parent/parents, and

       1
         As an aside, the language “for all purposes”—to which the Trustees attach great
significance—is irrelevant. It refers to all purposes in the Trust where “descendant” is
used. It has no bearing on the meaning of “adopted child.”
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such adopted child shall not be regarded as the descendant of his/her natural parents.

This language could reasonably be interpreted to mean that if one of George’s children is

adopted out of the family, he/she is no longer a “descendant” of George. On the other

hand, it is equally reasonable that in her choice of language, the Grantor did not

contemplate excluding from the estate her blood descendants who happened to be

adopted out of the family. Indeed, it is reasonable to believe—and in my view is more

likely—that the Grantor contemplated that George might adopt a child into the family,

rather than give up his natural child for adoption.

¶16    Reading the Trust instrument as a whole, it is clear that the Grantor intended to

provide financially for her four children by way of a separate trust for each. That being

her purpose, it also would have been her contemplation, desire, and intent, as a

grandmother, to insure that George’s natural and adopted children, if any, received his

share of the residue of her estate.

¶17    Importantly, for our purposes here, the phrase “adopted child” as used in defining

“descendant” is susceptible to more than one reasonable interpretation and is, therefore,

ambiguous. Since the language used by the Grantor is ambiguous, extrinsic evidence

may be introduced at trial to allow the trier of fact to determine the Grantor’s intent. See

Baker Revocable Trust, ¶ 55.

¶18    I conclude that the District Court should have required a full evidentiary hearing

admitting extrinsic evidence to clear up the aforementioned ambiguity and the Grantor’s

intent. Accordingly, we should vacate the District Court’s decision and remand for that

purpose.

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¶19   I respectfully dissent from the Court’s contrary decision.

                                                /S/ JAMES C. NELSON

Justice Brian Morris joins the Dissent of Justice James C. Nelson.

                                                /S/ BRIAN MORRIS

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