In Construing Wills and Trusts, “Plain Meaning” of Language Gives Way to “Testator’s Probable Intent”

In re Trust of Violet Nelson, 454 N.J. Super. 151 (App. Div. 2018).  As Judge Ostrer stated in his opinion in this case today, the issue was “whether a trial court may look beyond the apparently plain language of a trust that benefitted the settlor’s ‘grandchildren’ to determine whether the settlor intended to benefit only some of her grandchildren.”  The answer, the panel stated, was “yes,” with the result that a contrary partial summary judgment entered by the Chancery Division was reversed.

Violet Nelson’s trust said that the principal and income of the trust “shall be distributed in equal shares per capita and not per stirpes to Settlor’s grandchildren who survive Settlor.”  There were six grandchildren, who were offspring of Violet’s children, Jack, Robert, and Jacoba.

Jack sought a declaratory judgment that Jacoba’s two sons should not be beneficiaries of the trust.  Jack contended that because Jacoba married outside of the family’s Orthodox Jewish faith, Violet considered Jacoba dead, cut off contact with her, and did not consider Jacoba’s sons to be Violet’s grandchildren.  Jack offered other evidence that was extrinsic to the trust in support of his position as well.  One of Jacoba’s sons, Jared Lina, opposed Jack’s position.

On cross-motions for summary judgment, the Chancery Division ruled in favor of Jared (and his brother, a non-participant in the case).  That court “relied solely on the plain meaning of ‘grandchildren'” and, citing In re Estate of Gabrellian, 372 N.J. Super. 432 (App. Div. 2004), concluded that extrinsic evidence could not be considered.  Jack appealed and the Appellate Division reversed, applying de novo review.

Quoting Fidelity Union Trust Co. v. Robert, 36 N.J. 561 (1962), Judge Ostrer emphasized that “the goal always is the ascertainment of the testator’s intent and it is not to be thwarted by unduly stressing the literal meaning of his words.  The court may even read a trust or will contrary to its primary signification if necessary to prevent the intention of the testator from being defeated by a mistaken use of language.”

By “intent,” Judge Ostrer said, the Supreme Court meant “probable intent, since it is impossible to divine a testator’s “subjective intent.”  And, as Fidelity went on to say, a court “may, on the basis of the entire will, competent extrinsic evidence and common human impulses strive reasonably to ascertain and carry out what the testator probably intended.”

Judge Ostrer observed that in cases involving “interpretation” (as opposed to “reformation”), courts have long rejected a “plain meaning” rule that bars extrinsic evidence of surrounding circumstances, citing cases involving interpretation of contracts.  If anything, he said, that policy is even stronger in the context of wills and trusts, where (unlike in contract cases) there is only one party whose true intent is relevant, and there are fewer problems of reliance.

Thus, the panel disapproved of language in Gabrellian (which was “unnecessary to its holding”)that “the doctrine of probable intent is not applicable where the documents are clear on their face and there is no failure of any bequest or provision.”  Instead, Judge Ostrer reiterated, “a court may resort to extrinsic evidence to unveil ambiguity that does not appear on the document’s face.”

Under those principles, it was easy for the panel to reverse and remand.  According Jack all favorable inferences, as required on summary judgment, “extrinsic evidence demonstrated that ‘grandchildren,’ as the term was used in this trust, was ambiguous.  While ‘grandchildren’ generally means ‘the children of children,’ Jack presented evidence that Violet used the term in a different sense, personal to her.”  On remand, Jack may use that extrinsic evidence in support of his interpretation of the trust, and his burden of proof on that issue will be by a preponderance of the evidence.  Alternatively, Judge Ostrer noted, Jack may try to demonstrate a scrivener’s error in using the word “grandchildren,” but such a “reformation” claim requires proof by the higher standard of clear and convincing evidence.

The idea that plain language is overcome in the wills and trusts contexts by extrinsic evidence of subjective intent seems somewhat counterintuitive to the more common idea from the law of contracts that plain language is often conclusive of (mutual) intent.  But for over 50 years, the Supreme Court has said what it has said, and today’s decision follows from Fidelity and subsequent cases that Judge Ostrer cited.