Ehrenclou v. MacDonald

12 Cal. Rptr. 3d 411, 117 Cal. App. 4th 364, 2004 Cal. Daily Op. Serv. 2769, 2004 Daily Journal DAR 3945, 2004 Cal. App. LEXIS 422
CourtCalifornia Court of Appeal
DecidedMarch 30, 2004
DocketG032020
StatusPublished
Cited by9 cases

This text of 12 Cal. Rptr. 3d 411 (Ehrenclou v. MacDonald) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ehrenclou v. MacDonald, 12 Cal. Rptr. 3d 411, 117 Cal. App. 4th 364, 2004 Cal. Daily Op. Serv. 2769, 2004 Daily Journal DAR 3945, 2004 Cal. App. LEXIS 422 (Cal. Ct. App. 2004).

Opinions

[367]*367Opinion

IKOLA, J.

On a petition for instructions regarding the proper distribution of the remaining assets held in a trust, the court ruled that adults adopted under Colorado’s adult adoption statute did not qualify as “issue” of the person adopting them. The adopted adults, joined by a group of intervening charities, appeal. We affirm the judgment.

FACTS AND PROCEDURAL BACKGROUND

In late 1954, Jacob Paley (Jacob) created a trust (the 1954 trust), which, upon his death, would provide for his adopted daughter Jacqueline Paley Wolber (Jacqueline) and Jacob’s grandchildren.1 Now, some 50 years later, we are called upon to decide how the remaining assets of that trust are to be distributed.

Jacob died in 1960. Under the terms of the 1954 trust, upon Jacob’s death the assets were divided between Jacqueline and “each of her children then living.” The shares of Jacqueline’s “children then living” were placed in separate trusts, allowing discretionary pay-outs for support, maintenance, comfort and education, and requiring one-third of the principal to be distributed to the children at ages 30, 35, and 40. Jacqueline’s share was also retained in trust from which she received the net income for life. Upon Jacqueline’s death, her trust was to be terminated, and the assets “distributed by the trustees to her then living lawful issue per stirpes.”

Jacqueline’s “children then living” upon Jacob’s death were Martine Ehrenclou (Martine) and Konrad M. Bors (Konrad). But in 1992, thirty-two years after Jacob’s death, Jacqueline, then residing in Colorado, adopted Steven MacDonald (Steven) and Cynthia Hutt (Cynthia) as adults under the provisions of section 14-1-101 of the Colorado Revised Statutes.

Jacqueline died in 2001. Upon her death, Martine and Konrad petitioned the court for instructions pursuant to section 17200 of the Probate Code,2 requesting the court (1) to declare they were the only “living lawful issue” of Jacqueline, thereby excluding Jacqueline’s adult adoptees, Steven and Cynthia, from taking a share of the remaining assets of the 1954 trust, and (2) instructing the trustee to distribute the remaining assets of the 1954 trust to Martine and Konrad equally. Thus, the court was asked to determine whether Steven and Cynthia qualify as Jacqueline’s “living lawful issue” under the terms of Jacob’s 1954 trust.

[368]*368The Animal Legal Defense Fund (ALDF) intervened in the dispute on behalf of itself and as a representative of a class of 12 charities. The charities are interested in the outcome of this dispute because in addition to the 1954 trust, Jacob had created another trust for Jacqueline’s benefit in 1937 (the 1937 trust). The 1937 trust gave Jacqueline a testamentary power of appointment, which allowed her to dispose of its assets as part of her own estate. Jacqueline exercised her power of appointment by providing in her will that one-half of the residue of her estate, including the assets of the 1937 trust, would pass to Steven and Cynthia, but only if they were not permitted to take under the 1954 trust. The remainder of the residue would pass to some 12 charities, including the ALDF. Thus, if Steven and Cynthia take under the 1954 trust, the distribution to the charities, including ALDF, is doubled. For this reason, the ALDF, on behalf of itself and 11 other charities, joined with Steven and Cynthia in opposing Martine’s and Konrad’s petition for instructions.

On cross-motions for summary judgment, the court excluded Steven and Cynthia from the class of “living lawful issue.” The court based its ruling on its conclusion that under the law of the State of Colorado “adult adoption . . . createfs] in the adoptee only the status as heir at law to the person adopting, and such adoptee does not, by virtue of the adoption, become a ‘child’ or ‘issue’ of the person so adopting, and inheritance flows only through intestate succession of the adopting person and not as ‘issue’ of such persons.” The court further concluded that it was required to determine the status of Steven and Cynthia under Colorado law by reason of the “Full Faith and Credit Provisions of both State and Federal Law.” Accordingly, the court granted Martine’s and Konrad’s summary judgment motion, denied Steven’s and Cynthia’s summary judgment motion, and granted the petition for instructions as requested by Martine and Konrad.

DISCUSSION

Appellants (Steven, Cynthia, ALDF, and the other charities) contend the court erred by applying Colorado law to determine whether Steven and Cynthia qualified as members of the class of Jacqueline’s “living lawful issue.” Appellants argue California law must be applied, as directed by Jacob’s language in his 1954 trust, to “determine what incidents to accord to Steven and Cynthia’s adoption decrees.” Since Jacob expressed no contrary intent, they argue, “the Court must assume that he intended his Trust to ‘fit it and be compatible with the law and public policy’ in effect at the time he executed the Trust document.” According to appellants, the public policy of California requires courts “to treat adopted adults the same as natural children,” the “Full Faith and Credit Clause does not require adherence to Colorado law,” and is thus “completely irrelevant.”

[369]*369We agree with appellants that California law must be applied “with no exceptions.” But we also conclude the application of California law requires us to determine the legal relationship between Jacqueline and her two adult adoptees, Steven and Cynthia, under Colorado law.

The 1954 Trust is Presumed to Include Within the Class of “Living Lawful Issue” Adopted Persons Having a Parent-Child Relationship With the Adopting Person

Appellants argue, and we agree, Jacob plainly stated his choice of law: “This instrument and all matters pertaining to the administration, execution and performance of this trust shall be governed and determined in all respects by and in accordance with the laws of the State of California.” Subject to exceptions not here applicable, California law requires us to honor Jacob’s choice. “The meaning and legal effect of a disposition in an instrument is determined by the local law of a particular state selected by the transferor in the instrument. . . .” (§ 21103.)

Appellants also argue, and we agree, “the cases emphasize that among the circumstances to be considered [when interpreting the language of an instrument] are relevant statutes, case law and public policy in effect at the time of the execution of the document which, in the absence of a contrary intent, are deemed to become a part of the testamentary scheme.” (Wells Fargo Bank v. Huse (1976) 57 Cal.App.3d 927, 933 [129 Cal.Rptr. 522].) Normally, of course, “the courts may [also] consider and examine the circumstances surrounding the execution of the document in order to ascertain what the parties meant by the words used.” (Id. at pp. 932-933.) But here, the bare language of the trust instrument, including the date it was executed, is the only evidence presented to the court concerning the circumstances surrounding its execution. Or, if we stretch the reach of “surrounding circumstances” to a date 17 years earlier, the evidence established that Jacob also created a 1937 trust which gave Jacqueline a testamentary power of appointment over its assets. The 1954 trust, however, did not give Jacqueline a power of appointment.

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Ehrenclou v. MacDonald
12 Cal. Rptr. 3d 411 (California Court of Appeal, 2004)

Cite This Page — Counsel Stack

Bluebook (online)
12 Cal. Rptr. 3d 411, 117 Cal. App. 4th 364, 2004 Cal. Daily Op. Serv. 2769, 2004 Daily Journal DAR 3945, 2004 Cal. App. LEXIS 422, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ehrenclou-v-macdonald-calctapp-2004.