In Andresakis v. Modisett, the trustors signed trust agreements in 1976 and 1981, and each agreement created three trusts, one for their daughter, one for their son, and a third trust for their only grandchild, Andresakis. No. 07-16-00003-CV, 2017 Tex. App. LEXIS 42 (Tex. App.—Amarillo January 4, 2017, no pet. history). The agreements provided, however, for additional separate trusts benefiting “any grandchild subsequently born to or adopted by [their children] and who survives for a period of at least six (6) months.” Under the instruments, any such additional trust for a later-born or later-adopted grandchild of the trustors was to be funded by partitioning assets from the trust estate benefitting Andresakis, such that thereafter the trust estates benefitting each of the trustors’ grandchildren would have equal value. The son married in 1998 and later adopted his wife’s two children (the Modisetts), who were both over eighteen at the time of the adoption.
Andresakis sued the Modisetts and the trustees for a judgment declaring that the Modisetts were not beneficiaries of any trust under either trust agreement. The parties filed counter motions for summary judgment, and the trial court granted the Modisetts’ motion. The Modisetts then moved for a summary judgment declaring their trust interests vested when they were adopted. The trial court disagreed and in its final judgment fixed a vesting date six months later. Both sides filed notice of appeal.
The court of appeals affirmed both findings. The court of appeals first set forth the appropriate standards for interpreting trusts:
The construction of an unambiguous trust instrument is a question of law for the trial court. A trust instrument is construed to determine the intent of the settlor from the language of the four corners of the instrument. All terms are harmonized to give proper effect to each part of the instrument. The instrument should be construed, if possible, so that effect is given to all provisions and no provisions are rendered meaningless. Provided the language of the instrument unambiguously expresses the settlor’s intent, there is no need to construe the instrument because “it speaks for itself.” An instrument is ambiguous if its meaning is uncertain or reasonably susceptible to more than one meaning.
Id. Andresakis argued that the trustors intended the class of subsequently adopted children to consist only of children adopted before attaining majority. Andresakis also argued that his interpretation is supported by the provisions of the agreements empowering the trustees to make discretionary distributions to or for a grandchild in an amount “necessary or advisable for the health, support, education and maintenance” of the grandchild, and language requiring the trustees to consider, among other things, the ability of any person who is “legally obligated to support such beneficiary,” when making distributions. The appellate court disagreed with this argument:
We cannot agree that any language of the trust agreements indicates an intention of the trustors to limit adopted grandchild beneficiaries to those adopted as minors. We agree instead with the trial court that the agreements unambiguously express the contrary intention, that individuals who become grandchildren of the trustors by adoption are beneficiaries, “whenever adopted.” That the sentence containing the phrase, “whenever adopted,” specifically addresses the adoption of step-children further affirms its application to the Modisetts’ adoption by Kenneth Cailloux.
The court also affirmed the vesting finding by the trial court. The trust document stated that the term “such grandchild” referred to an individual born to or adopted by either of the trustors’ children “and who survives for a period of at least six (6) months.” The language also instructed the trustees to “set apart” or “partition” assets to constitute the trust estate of a newly-created trust makes clear that the partition occurs only for the benefit of a grandchild who survives birth or adoption by at least six months. The court disagreed with the Modisetts’ argument that because the agreements vests the trust assets in the trustees without qualification, the Modisetts’ beneficial interest also was vested on the date of their adoption, subject to divestiture if they had not survived their adoption by six months. Rather, the court held that their interests vested six months after they were adopted.