In re Dumaine
| Decision Date | 31 July 2001 |
| Docket Number | No. 2000-270.,2000-270. |
| Citation | 146 N.H. 679,781 A.2d 999 |
| Parties | In re Declaration of TRUST Made BY Frederic C. DUMAINE & another. |
| Court | New Hampshire Supreme Court |
Ransmeier & Spellman, P.C., of Concord (John C. Ransmeier on the brief and orally), for the petitioners.
McLane, Graf, Raulerson & Middleton, P.A., of Portsmouth (Charles A. DeGrandpre and Sarah B. Knowlton on the brief), for the respondents.
Nicholas R. Aeschliman, of Portsmouth, special guardian ad litem, joined in the petitioners' brief.
Orr & Reno, P.A., of Concord (Mary Susan Leahy and Gayle M. Braley on the brief), as guardian ad litem to certain known and unknown potential beneficiaries.
This is an interlocutory transfer without ruling from the Hillsborough County Probate Court (Cloutier, J.). See Sup.Ct. R. 9. The petitioners, the trustees of a declaration of trust made by Frederic C. Dumaine and others, ask the court to determine whether the word "children" in the net income provision of the trust should be interpreted to include descendents of Dumaine who are neither his children nor grandchildren. The respondents, two of Dumaine's grandchildren, join in the petitioners' request. We hold that the settlor of the trust intended the word "children" to be interpreted literally.
The following facts were presented by the trustees and found by the probate court. The trust was created in 1920. The trust income is distributed during the life of the trust according to the net income provision set forth in article II, paragraph 3 of the trust instrument. Pursuant to this provision, the trustees must determine the net income of the trust annually and distribute one-half of it to the principal. The provision permits the trustees to distribute the other half "to the legitimate children of Frederic C. Dumaine or to their legitimate surviving children."
The trustees have sole discretion to determine who will receive income and in what amounts. The trustees are permitted to "omit all or any[one]" from the class of those to whom income is distributed. Despite this broad grant of authority, the trustees historically have distributed net income on a per stirpes basis, dividing it into equal shares with one share for each living child and one for each of the deceased children with living issue. They have paid one share to each of Dumaine's living children and one share on a representational basis to the legitimate living children of each deceased child. Since the death of the last survivor of Dumaine's seven children, the trustees have distributed one-half of the net income on a per stirpes basis to Dumaine's twelve grandchildren. The twelve grandchildren now range in age from fifty-six to seventy-four, and thus it is likely that one or more of them will die before the trust terminates (at least twenty-one years from now).
In June 1999, the trustees petitioned the probate court to interpret the word "children" in the net income provision to refer not only to Dumaine's children and grandchildren, but also to later generations, thus permitting the trustees to distribute income to the children of deceased grandchildren. This interlocutory transfer followed. The parties appearing before us all advocate the construction advocated by the trustees.
Whether the word "children" should be interpreted liberally or literally depends upon the intention of the settlor of the trust. See Bartlett v. Dumaine, 128 N.H. 497, 505, 523 A.2d 1 (1986). When interpreting an inter vivos trust evidenced by a written instrument, "the terms of the trust are determined by the provisions of the instrument as interpreted in the light of all the circumstances and ... other competent evidence of the intention of the settlor with respect to the trust." Id. (quotation and brackets omitted). The "determination of the ultimate fact of the intent of the [settlor] rests with [this] court." Sylvester v. Newhall, 97 N.H. 267, 272, 85 A.2d 378 (1952) ; see also In re Trust u/w/o Smith, 131 N.H. 396, 397, 553 A.2d 323 (1988).
To determine the settlor's intent, we first look to the language of the trust. "In searching for the proper interpretation of words used in a written instrument, we require that the words and phrases be given their common meaning." In re Dumaine, 135 N.H. 103, 107, 600 A.2d 127 (1991) (quotation omitted). "The nature and extent of the interest given to trust beneficiaries is to be determined from the whole instrument and not from an isolated phrase." Indian Head Nat. Bank v. Rawls, 105 N.H. 142, 145, 194 A.2d 767 (1963). We examine extrinsic evidence of the settlor's intent only if the language used in the trust instrument is ambiguous. See Bartlett, 128 N.H. at 505, 523 A.2d 1.
The relevant portions of the net income provision are as follows:
At the end of each calendar year the Trustees shall determine the net income of the trust; ... [one-half] thereof the Trustees may in their sole discretion pay ... to the legitimate children of Frederic C. Dumaine or to their legitimate surviving children. The Trustees shall have full discretion to decide to which of said children of Frederic C. Dumaine, or their said surviving children, payments shall be made, and the amount thereof including the right to omit all or any....
"The word ‘child’ ordinarily means a son or a daughter; a descendent in the first degree." Sylvester, 97 N.H. at 271, 85 A.2d 378; see also In re Merrill Estate, 106 N.H. 99, 102, 205 A.2d 851 (1964) (). Relying principally upon Edgerly v. Barker, 66 N.H. 434, 31 A. 900 (1891), the parties argue that the word "children" may include later generations. We hold that in the context of this trust, the word refers to first generation descendents only.
The cases cited by the parties are distinguishable. For instance, the provision in Edgerly, unlike the net income provision, referred to the testator's grandchildren and their heirs. Id. at 449, 31 A. 900. In that context, we held that it was permissible for the children of deceased grandchildren to take from the will. See id. at 447-51, 31 A. 900.
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...circumstances and other competent evidence of the intention of the settlor with respect to the trust.” In re Declaration of Trust by Dumaine, 146 N.H. 679, 681, 781 A.2d 999 (2001) (quotation and ellipsis omitted). The “determination of the ultimate fact of the intent of the settlor rests w......
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