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“Descendants” Includes Children of Living Beneficiary

The Dallas Court of Appeals recently held in a trust construction / interpretation case that the term “descendants” as used in a trust document included not only a trust beneficiary but also the children of the trust beneficiary prior to the beneficiaries’ death.

The issue was whether “descendants” was to be used (1) in its strict legal sense of children of a deceased person or (2) in its popular sense as including the children of a living person.  The court held that “descendants” included the children of the living beneficiary of the trust, thereby enlarging the pool of beneficiaries receiving funds from the trust.

In the case in question, the trust had various provisions in different portions of the trust document that defined “descendants” to include children of living beneficiaries, and other portions of the trust document that did not.  One of the trust beneficiaries (a grandchild of the settlor maker of the trust), was still living and had two children (great grandchildren of the maker of the trust) living as well. The trustee (Bank of America) paid benefits to both the maker’s grandchild as well as to the maker’s two grandchildren, and the court approved this.

In order to avoid problems such as these, drafters of wills and trusts need to be clear regarding whether the maker of the will or trust intends to include children of a living beneficiary in the distribution.

Cowles & Thompson