When leaving a gift to a child in a will, people often want the gift to pass to the child’s children should the child die before the grantor. In fact, New Hampshire has a statute stating that if a child is not mentioned in a will, and the child is not expressly excluded from the will, then that child receives whatever gift he or she would have received had the decedent died without a will. The statute is commonly known as the “pretermitted heir” statute, and is found at RSA 551:10.
But what happens if a child is not mentioned in a trust? The New Hampshire Trust Code, RSA 564-B, is silent on that issue, but RSA 564-B:1-112 does state that “rules of construction” applicable to the disposition of property by will shall apply to trusts as well. Does this mean if a child is not named in a trust, RSA 551:10 should apply, thus giving the grandchild what the child would have received had the deceased died intestate?
In Re: The Teresa E. Craig Living Trust
The New Hampshire Supreme Court answered that question in the case of In Re: The Teresa E. Craig Living Trust, decided September 7, 2018. The Court concluded RSA 551:10 does not apply to trusts; therefore, if a pretermitted child is not mentioned in the trust, the child receives no gift. Put another way, unless a child is specifically mentioned in the trust, the child receives no gift.
The Court drew a distinction between rules of construction and rules of law. It determined RSA 551:10 was a rule of law. As a rule of law, the Court had little discretion but to apply the statute literally. RSA 551:10 expressly uses the terms “will” and “testator,” both of which do not apply to trusts. A “testator” makes a will; therefore, the statute only applies to wills. (The terms “settlor” and “trust” would be analogous to “testator” and “will” in wills.)
Had the Court concluded RSA 551:10 was a rule of construction, it may have had more latitude in deciding whether to apply it to trusts.