Anderson v. BNY Mellon, N.A., et al.
The Supreme Judicial Court recently declared Chapter 524 of the Acts of 2008 unconstitutional. Although the intent of the Legislature was admirable, it would have effectively rewritten the terms of testamentary trusts and threatened property rights of beneficiaries.
Since 1958, all adopted children have been presumed descendants under the law of wills and trusts. Prior to 1958, the presumption did not exist and adopted children were not deemed descendants under the law. Chapter 524 attempted to apply the presumption of equality of adopted children to wills executed prior to 1958, affecting the property rights of numerous beneficiaries without due process.
Background[1]
Anna Child Bird created her will on December 31, 1941. The will created, on her death, a trust (ACB trust) benefiting her son, Charles Sumner Bird, Jr. (Charles Jr.); Charles Jr.’s wife, Julia Bird (Julia); her grandsons, Charles Sumner Bird, III (Charles III), David, and Christopher Bird (Christopher); and the issue of her son and grandsons.
Charles III had one daughter (Lisa), David had two adopted sons (Marten and Matthew). Lisa received her father’s interest upon his death; Marten and Matthew were excluded from receiving their father’s interest as a result of their adopted status. Even though Marten and Matthew were born long after Anna’s death, Anna did not include potentially adopted children in her will.
On July 19, 2010, a few weeks after the effective date of the 2009 amendment, the plaintiff received a notice from the defendant, BNY Mellon, N.A., the trustee of the ACB trust (trustee). The notice informed her that in light of the 2009 amendment, Marten and Matthew were now considered “issue” of Charles Jr. for purposes of the ACB trust and were therefore income beneficiaries under the trust.
Discussion
Prior to 1958, adopted children were not deemed descendants under the law. Thus, if a testator sought to include adopted children in a will, they had to specify their intention of including adopted children into their will. A failure to do so excluded the adopted child from a share of the estate. It was unduly harsh on adopted children and frequently resulted in unintended consequences.
In 1958, the Massachusetts Legislature adopted G.L. c. 210 § 8 which changed the law to create a presumption that adopted children were “issue.”[2]Although the testator was still free to exclude the adopted child, the presumption eliminated the possibility of an adopted child inadvertently being left out of the estate for the testator’s failure to specifically include them.
Chapter 524 attempted to extend that presumption (that adopted children be included as descendants) to all pre-1958 wills. Although granting adopted children equal rights is noble, Chapter 524 retroactively applies the law, disrupting the legal advice had given their clients, and creating issues of due process and equal protection under the law.
The competing interests of allowing adopted children equal rights as natural-born children on the one hand and creating uncertainty by disrupting legal expectations on the other, are what is at stake.
The Attorney General, arguing in support of 524, asserts that the law was simply a procedural rule allowing a more accurate reflection of the intent of a testator in including adopted children. Other jurisdictions have taken similar actions.[3]
This procedural rule, however, flies in the face of years of legal advice attorneys had given clients prior to 1958, and could affect property rights moving forward. As Lisa Goodheart of the BBA put it: “[S]uch retroactive changes undermine the ability of trust settlors, fiduciaries, beneficiaries, and others to rely on established principles of construction. Settlors and their attorneys may rely on then-effective default presumptions in preparing and settling cases.”[4]
Moreover, a retroactive application of the law runs the risk of redistributing property rights without due process of law, a clear violation of art. 10 of the Massachusetts Declaration of Rights.[5]
Summary
By striking down Chapter 524, the SJC prevented the retroactive application of presumptions and ensured that the property rights of beneficiaries will not be infringed upon without due process. Although an admirable attempt to eliminate a presumption against including adopted descendants in an estate, a retroactive application of a presumption is unconstitutional and disruptive to legal practice.
[1] http://www.suffolk.edu/sjc/archive/opinions/SJC_11122.pdf
[2] In post-1958 testamentary instruments, the word “child,” or its equivalent, was defined to include an adopted child regardless whether adopted by the settlor, grantor, or testator, unless the instrument indicated otherwise. See Watson v. Baker, 444 Mass. 487, 492 (2005)
[3] http://www.suffolk.edu/sjc/archive/opinions/SJC_11122.pdf
[4] http://www.bostonbar.org/docs/default-document-library/bba-amicus-brief-04-30-12-.pdf
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