Wheeling Dollar Sav. & Trust Co. v. Hanes

• Decision Date: 28 June 1977
• Docket Number: No. 13732,13732
• Citation: 160 W.Va. 711,237 S.E.2d 499
• Court: West Virginia Supreme Court
• Parties: WHEELING DOLLAR SAVINGS & TRUST CO., Trustee, etc. v. Karen Stifel HANES and Donna Stifel Stengel.

Page 499

237 S.E.2d 499

160 W.Va. 711

WHEELING DOLLAR SAVINGS & TRUST CO., Trustee, etc. v. Karen Stifel HANES and Donna Stifel Stengel.

No. 13732.

Supreme Court of Appeals of West Virginia.

June 28, 1977.

Rehearing Denied Oct. 10, 1977.

Syllabus by the Court

1. Syllabus point 2 of Security National Bank & Trust Co. v. Willim, 151 W.Va. 429, 153 S.E.2d 114 (1967) and syllabus point 1 of Wheeling Dollar Savings & Trust Co. v. Stewart, 128 W.Va. 703, 37 S.E.2d 563 (1946) are overruled.

2. Any testamentary or inter vivos trust governed by the laws of the State of West Virginia, regardless of the date of its execution, including by way of example and not by way of limitation, all trusts executed before 1959, shall be construed under the provisions of W.Va.Code, 48-4-5 (1969) and adopted children shall take under any provision which uses the words "child" or "children," or any general words which are loosely, if not technically, synonymous with the words "child" or "children," including again by way of example and not by way of limitation, such words as "natural children," "descendants," "heirs," "issue," or any other similar language.

3. In order for an adopted child to be excluded from the benefits of a testamentary or inter vivos trust which would have been accorded to him had he been a natural child of his adoptive parents, such testamentary or inter vivos trust must specifically exclude adopted children by explicit language.

Bachmann, Hess, Bachmann & Garden, Gilbert S. Bachmann, Wheeling, for Karen Stifel Hanes and Donna Stifel Stengel.

Galbraith, Seibert & Kasserman, James E. Seibert, Wheeling, for Arthur C. Stifel, III.

NEELY, Justice:

The Court granted this appeal for the purpose of reviewing the law annunciated in syllabus point 2 of Security National Bank & Trust Co. v. Willim, 151 W.Va. 429, 153 S.E.2d 114 (1967) concerning the treatment of adopted children under testamentary and inter vivos trusts executed before 1959 when the Legislature enacted W.Va.Code, 48-4-5 (1959). ¹ Syllabus point 2 of the Willim case says:

In a case involving the construction of a will made in 1900 by a testatrix who died in 1908, and particularly involving construction of language by which certain property was devised in trust for the benefit of a granddaughter of the testatrix for life and, upon her death, if she should leave a child or children surviving her, to such child or children, and the further provision that if the granddaughter should die without issue surviving her, the property should pass to other specified persons, a child adopted by the granddaughter, the life tenant, after the death of the testatrix cannot take such property under the will as a child or as issue of the granddaughter, the life tenant.

In light of the dramatic changes which have been made in the organization of society in the last 20 years and the pervasive tendency of modern adults to adopt minor children who then become both emotionally and financially indistinguishable from their own children, today we overrule syllabus point 2 of Security National Bank & Trust Co. v. Willim, supra, as well as syllabus point 1 of Wheeling Dollar Savings & Trust Co. v. Stewart, 128 W.Va. 703, 37 S.E.2d 563 (1946). ² We hold today that any testamentary or inter vivos trust governed by the laws of the State of West Virginia, regardless of the date of its execution, including by way of example and not by way of limitation, all trusts executed before 1959, shall be construed under the provisions of W.Va.Code, 48-4-5 (1969) and adopted children shall take under any provision which uses the words "child" or "children" or any general words which are loosely, if not technically, synonymous with the words "child" or "children," including again by way of example and not by way of limitation, such words as "natural children," "descendants," "heirs," "issue," or any other similar words. Further, we hold that adopted children under the provisions of such inter vivos or testamentary trusts may only be excluded from the operation of such trusts if the trustor or testator has specifically excluded them by unambiguous explicit language.

I

In the case before us Karen Stifel Hanes and Donna Stifel Stengel appeal a judgment of the Circuit Court of Ohio County entered on the pleadings in a declaratory judgment action brought by the Wheeling Dollar Savings & Trust Company for aid in construing an inter vivos trust agreement under which Wheeling Dollar is trustee. The question below was whether adopted children are "children" within the meaning of the trust instrument and entitled to share in the distribution of the trust estate upon the death of their adoptive father, the trust's life beneficiary. The circuit court excluded the adopted children from sharing in the distribution of the trust estate.

On March 31, 1938, Arthur C. Stifel executed an irrevocable inter vivos trust agreement designating his son, Arthur C. Stifel, Jr., as income beneficiary for life. The trust instrument provided for distributions of income, and ultimately principal, to designated beneficiaries upon the death of Arthur C. Stifel, Jr. Persons entitled to such trust distributions included the life beneficiary's surviving "widow who was living with him at the time of his death" and the life beneficiary's "children and/or descendants of the deceased child or children."

Arthur C. Stifel, Jr. died November 29, 1974, survived by his second wife, Niki C. Stifel, a son by a former marriage, Arthur C. Stifel, III, and by two adopted daughters, Karen Stifel Hanes and Donna Stifel Stengel. ³ There is some question concerning whether Niki C. Stifel was living with Arthur C. Stifel, Jr. at the time of his death, so as to qualify for a share of the trust distribution. That question was not resolved below and is not before us now. We are concerned solely with the rights of the adopted daughters who were excluded from the trust distribution as the result of the circuit court's granting the motion of appellee, Arthur C. Stifel, III, for judgment on the pleadings. As matters stood below at the time of this appeal, Arthur C. Stifel, III was the only child entitled to a trust distribution.

The provisions of the trust relevant to our consideration of this matter are as follows:

SECOND: The net income of the Trust shall be paid not less frequently than quarter-annually in as nearly equal instalments (sic) as practicable to Arthur C. Stifel, Jr., a son of the Trustor, during his lifetime, and thereafter:

(1) If said Arthur C. Stifel, Jr. should leave surviving him a widow who was living with him as his wife at his death, and a child or children and/or descendants of a deceased child or children, then one-half (1/2) of said net income shall be paid to such widow and the other half thereof, or, if he should leave no such widow, the whole thereof, shall be paid to such child or distributed among such children and/or descendants of children, in equal shares per stirpes.

(2) If said Arthur C. Stifel, Jr. should leave surviving him such a widow but no child nor descendant of any child, then the entire net income shall be paid to such widow.

(3) If said Arthur C. Stifel, Jr. should die leaving no widow nor issue of any degree, or upon the death of any such widow and such children and descendants of children prior to the termination of this Trust, then such income shall be paid to or distributed among William Flaccus Stifel, a son of the Trustor, and/or Joan A. Stifel, a daughter of the Trustor, and/or their children and descendants of children in equal shares per stirpes.

(4) During any period in which there is no person within any of the foregoing classes entitled to receive the income, it shall be accumulated.

THIRD: Upon the termination of any estate hereunder, accrued income shall belong to the next estate.

II

There is extensive conflicting authority throughout the United States on the issue now before us. Our own reading of the cases, however, indicates that the clear direction of the law is in favor of parity for adopted children in all matters, including the right to take under family trusts executed long before adoption became a pervasive phenomenon. ⁴ Although the West Virginia Legislature was silent with regard to this problem when it enacted W.Va.Code, 48-4-5 (1969), it is the clear policy of the Legislature of this State that adopted children shall be on a par with natural children. W.Va.Code, 48-4-5 (1969) is as follows:

Upon the entry of such order of adoption, the natural parent or parents, any parent or parents by any previous legal adoption, and the lineal or collateral kindred of any such parent or parents, except any such parent who is the husband or wife of the petitioner for adoption, shall be divested of all legal rights, including the right of inheritance from or through the adopted child under the statutes of descent and distribution of this State, and shall be divested of all obligations in respect to the said adopted child, and the said adopted child shall be free from all legal obligations, including obedience and maintenance, in respect to any such parent or parents. From and after the entry of such order of adoption, the adopted child shall be, to all intents and for all purposes, the legitimate issue of the person or persons so adopting him or her and shall be entitled to all the rights and privileges and subject to all the obligations of a natural child of such adopting parent or parents.

For the purpose of descent and distribution, from and after the entry of such order of adoption, a legally adopted child shall inherit from and through the parent or parents of such child by adoption and from or through the lineal or collateral kindred of such adopting parent or parents in the same manner and to the same extent as though said adopted child were a natural child of such adopting parent or parents, but such child shall not inherit from his or her natural parent or parents nor...