Estate of Woodworth - 18 Cal. App. 4th 936, 22 Cal. Rptr. 2d 676 (1993)

Rule:

When a gift has been made to the "heirs" or "next of kin" of a named individual, the donor has said in effect that he wants the property distributed as the law would distribute it if the named person died intestate. Accordingly, the normal time for applying the statute of descent or distribution is at the death of the named individual. This is, however, merely a rule of construction, and if the testator or grantor manifests an intention that the statute be applied either at an earlier or a later time, such intention will be given effect.

Facts:

Under a testamentary trust, the decedent's wife was made the life tenant. The trust was to terminate upon the wife's death, and the remainder of the trust estate was to be paid to the decedent's sister, "if she then survives, and if not then to her heirs at law." The sister died prior to the wife, and as of the date of the sister's death, her heirs at law included her husband, a niece, and a nephew. As of the date of the wife's death over 11 years later, the sister's heirs at law included only the niece and nephew. Residual beneficiaries of the will of the sister's husband asserted a claim to the remainder of the testamentary trust. Relying on the language of the decree of distribution, the probate court concluded that the identity of the heirs entitled to the trust assets had to be determined as of the date of death of the life tenant (the wife), rather than the date of death of the sister. The probate court therefore ordered the trustee to deliver the remaining trust assets in equal shares to the niece and nephew. 

Issue:

Did the probate court err in concluding that the identity of the sister's heirs entitled to testamentary trust assets was determined on the date of death of the decedent's wife, rather than on the date of death of the sister?

Answer:

Yes.

Conclusion:

The Court of Appeal reversed the probate court's ruling that the claimants (the residual beneficiaries of the will of the sister's husband) had no claim to the assets of the testamentary trust. Since the trial court did not consider the extrinsic evidence presented by the parties, the Court of Appeal took no position with respect to it or its effect. The court held that the probate court erred in concluding that the identity of the sister's heirs entitled to testamentary trust assets was determined on the date of death of the decedent's wife, rather than on the date of death of the sister. The court held that the will created a contingent remainder in the sister, with a substitutional gift to her heirs at law. However, the contingent, substitutional gift exception to the common law preference for early vesting did not apply to grants of remainder interests such as in the present case. Moreover, the court held that there were no other applicable exceptions to the preference for early vesting.