Planning for Life

To Issue or Children -- An "Issue" of Interpretation

Posted by Alison Blum on September 11, 2018

By Alison Blum

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In 1960, Elizabeth S. Payson executed a will leaving her estate first in trust for her husband and then in trust for the benefit of her daughter, also named Elizabeth. (For purposes of clarity, we''ll refer to the mother as Ms. Payson and the daughter as Elizabeth.) The will directed that after Elizabeth’s death, the net income from a trust should be distributed to Elizabeth’s children (Ms. Payson's grandchildren), until the youngest of these children turned 21. After Elizabeth’s children reached the age of 21, the principal of the trust was to be distributed to Elizabeth’s issue in equal shares.

The Issue (so to Speak)

At the time of Elizabeth’s death in 2014, all four of her children had reached the age of 21, so the principal in the trust could be distributed – but who were the testatrix’s intended beneficiaries? The dispute in In the Matter of Elizabeth S. Payson (Mass. App. 17-P-1425, August 28, 2018) stems from the testatrix’s use of both the terms “children” and “issue” in her will. Was the distribution of the trust to go solely to Elizabeth’s four living children or also to Elizabeth’s seven living grandchildren (the testatrix’s great-grandchildren)? What did she mean by switching from use of the word “children” to “issue”?

Probate Court Opinion

The trustee asked the Probate Court for instructions. It concluded that “issue” meant something different from “children” and “all eleven (11) descendants are the proper beneficiaries of the Testamentary Trust.” One of Elizabeth’s children appealed.

On Appeal

As is the case when reviewing the language of all trusts, the Appeals Court sees its job as determining Ms. Payson’s intent. It finds that it need not go beyond the words of the trust itself to make that determination, and that the term “issue” should be given its common meaning at the time the will was executed in 1960. At that time, the Court says, “issue” meant the descendants who would take under an estate in the absence of a will, also called the law of intestate succession.

Because all of Elizabeth’s children survived her, and because there was no indication to the contrary, Elizabeth’s grandchildren cannot “compete” with their living parents for a share of the principal in the trust. These great grandchildren would only take in the event one of their parents was no longer living. As a result, the Appeals Court finds that the principal should be distributed equally only among Elizabeth’s four children.

Alison Blum is a third year student at the Boston College School of Law and a law clerk with Margolis & Bloom.

Topics: trusts, will, issue

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