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?
The New Hampshire Supreme Court answered that question in the case of In Re 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, and 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, as 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.
Paul J. Alfano, Esq. Paul can be reached at paul@alfanolawoffice.com or (603) 226-1188.