I was Excluded as a Beneficiary, but Don’t Think it was Intended; am I out of Luck? Maybe Not!

We all know what certain words mean, particularly in the context of family.  We know who our spouse is, who our children are, and who our grandchildren are.  But sometimes it’s not that simple, and it becomes necessary to go beyond written words to determine someone’s true intention.

A recent New Jersey case, In re Trust of Violet Nelson, is a perfect example of how the commonly used term “grandchildren” can mean different things to different people, and how those differing interpretations can impact the rights of beneficiaries.  Violet Nelson was married and had six grandchildren from three different children.  She created a trust for the benefit of her husband during his lifetime and upon his death, the trust property was to be distributed to her grandchildren.  Violet’s husband died.  So, what’s the controversy?  The trust property gets distributed to Violet’s six grandchildren, right?

It turns out that one of Violet’s children, Jacoba, had married outside the family’s Orthodox Jewish faith, and because of that, Violet considered Jacoba and Jacoba’s children “dead to her.”  Violet’s lawyer even testified that the word “grandchildren” in the trust was intended to mean her grandchildren other than Jacoba’s children, although the trust did not say that specifically.

Nevertheless, the trial court held that the trust was clear, it said the trust property was to pass to Violet’s grandchildren and Jacoba’s children were Violet’s grandchildren regardless of how Violet regarded them, end of inquiry.  On appeal, the Appellate Division held that it was necessary to look beyond the language of the trust to determine Violet’s probable intention as to who fell within the definition of “grandchildren.”

In this case, evidence was being introduced to exclude certain people from a class of beneficiaries.  But potential beneficiaries need to be aware that the opposite holds true as well- there may be evidence to show that you should be included within a certain class of beneficiaries.  For example, maybe a trust or will leaves assets to “my children.”  We discussed the concept of a “mutually acknowledged child” in a previous blog post in the context of New Jersey Inheritance Tax, and in a similar vein, it may be very apparent that despite the plain meaning of the word “children” to include only natural born or adopted children, circumstances can clearly show that someone had a more expansive view of that term.

Beneficiaries should therefore not assume that words will always be interpreted consistently with their plain meaning.  Courts look to fulfill the intent of people who create wills and trusts, even if that means looking outside the document to determine what that intent is.  Beneficiaries can use this to their advantage when they appear to be excluded from a trust or will, but feel that is not what was intended.

If you have any questions about this post or any other matters, please contact me at jjcostellojr@nmmlaw.com.