In 1941, Anna Child Bird (Anna
1. Background.
The provisions of the ACB trust pertinent to this case concern Anna’s three grandsons and their issue. Under those provisions, while Charles III, David, and Christopher were all living, Charles III was to receive one-half of the balance
On November 19, 1942, Anna died, and the ACB trust became irrevocable. At the time of her death, there were no adopted children in any generation of the Bird family. Marten was bom in 1965, and Matthew in 1970; the record does not indicate when they were adopted by David. The plaintiff was bom in 1967. David died on October 28, 2007, and at the time of his death, Charles III was still living. Accordingly, under the terms of the ACB tmst, David’s issue then assumed his one-quarter interest in the trust income at his death, and the plaintiff, as David’s only biological child, began to receive a distribution of twenty-five per cent of the tmst income quarterly. Marten and Matthew did not receive any income distribution because the ACB tmst, having been created before 1958, was interpreted in accordance with the presumptive rule of construction in § 8 prior to the 1958 amendment, and as adopted children of a grandson who was not the testator, Marten and Matthew were not considered to come within the definition of “child” or its equivalent, “issue.” Charles III died on April 20, 2010, and we infer that he was the last of Anna’s grandsons to die. After his death, under the terms of the ACB tmst, the tmst income was distributed to the issue of Charles Jr. by right of representation. The plaintiff began receiving a distribution of fifty per cent of the tmst income, while Marten and Matthew continued to receive nothing.
b. Julia Bird trust. Julia, the grandmother of the plaintiff, Marten, and Matthew, established a charitable lead trust (JB trust) on April 9, 1981. The JB trust terminated in February, 2008, twenty-five years after Julia’s death in 1983, and the trust principal was paid as follows: one eighth each to Marten and Matthew, and the remainder in equal shares to Julia’s then-living great-grandchildren, specifically including the children of Marten and Matthew. The plaintiff was not a beneficiary of the JB trust. Julia did not explain in the trust instrument why she chose this distribution scheme, nor does an explanation appear anywhere in the record.
c. Procedural history. On September 30, 2010, the plaintiff filed a complaint in the Probate and Family Court, seeking a judgment declaring that the 2009 amendment is unconstitutional, at least as applied to the ACB trust; the complaint names the trustee, Marten, and Matthew as defendants, and the four biological daughters of Christopher as “interested parties.” On the plaintiff’s motion, two guardians ad litem were appointed, one to represent the interests of Anna’s unborn and unascertained
2. Discussion. We first explore the history of the amendments to § 8 in greater detail. We next address the question whether § 8 is merely an evidentiary rule and therefore raises no constitutional concerns when applied retroactively. Because we conclude that constitutional questions are implicated, we then turn to an analysis whether the 2009 amendment may be applied retroactively in this case.
a. History of amendments to G. L. c. 210, § 8. As mentioned, the 1958 amendment prospectively reversed the presumption applicable at Anna’s death, such that in post-1958 testamentary instruments, the word “child,” or its equivalent, was defined to include an adopted child regardless whether adopted by the set-tlor, grantor, or testator, unless the instrument indicated otherwise. See Watson v. Baker, 444 Mass. 487, 492 (2005). Section 8 was rewritten by St. 1969, c. 27 (1969 amendment), which expanded the statute’s application to include expressly the terms “grandchild,” “issue,” “heir,” “heir-at-law,” and their equivalents. More importantly, it provided that the presumption of inclusion of adopted persons in the definition of these terms “shall be applicable to all [instruments] whether the same were executed or effective before or after the effective date of this act,” except that the presumption would not apply to any pre-1958 instrument “with respect to any interests or right therein which had vested prior to the effective date of this act.” St. 1969, c. 27, §§ 1, 2.
In a series of cases, this court interpreted the term “vested”
This was the state of the law until the passage of the 2009 amendment, which unequivocally and without exception gave full retroactive application to the 1969 definitions of the terms “child,” “grandchild,” “issue,” “heir,” and “heir-at-law.” See St. 2008, c. 524 (“[General Laws c. 210, § 8,] shall apply to all grants, trust settlements, entails, devises, or bequests executed at any time” [emphasis added]). The plaintiff argues that retroactive application of the 2009 amendment to the pre-1958 ACB trust violates art. 10 of the Massachusetts Declaration of Rights,
The Attorney General responds that applying the 2009 amendment retroactively raises no constitutional problems, arguing that the amendment is nothing more than an evidentiary rule and that the plaintiff has no vested property right in the application of an evidentiary rule. She also contends that under a line of cases that construe evidentiary rules as procedural — and therefore not changing the substantive law on which parties were entitled to base their prior conduct — there is no constitutional difficulty raised by applying the 2009 amendment to the ACB trust. See, e.g., Tobin’s Case, 424 Mass. 250, 255-256 (1997) (rebuttable presumption of noneligibility for workers’ compensation benefits for workers over age sixty-five who have not worked for at least two years and are eligible for retirement benefits is procedural and may be applied retroactively); Smith v. Freedman, 268 Mass. 38, 40-41 (1929) (rebuttable presumption that motor vehicle involved in accident was under control of person for whose conduct vehicle’s owner was responsible does not change substantive law of negligence and may be applied retroactively).
We agree with the Attorney General that the 2009 amendment provides a rule to aid in the construction of wills and trust instruments and does not vest substantive rights in anyone. See New England Merchants Nat’l Bank v. Groswold, 387 Mass, at 829. However, a determination that the plaintiff has no vested right in the operation of this statute does not end the inquiry. What the plaintiff does have is a substantial interest in the ACB trust — in part an expectation interest but in part an actual interest by her receipt of trust income beginning in 2007. This interest will be significantly harmed if the presumption contained in the 2009 amendment is applied to the trust. The ACB trust exists independently of any statute. It was created by a private person operating in the private sphere, bestowing expectations and interests on her descendants. The settled law in this Com
The 2009 amendment presumably was intended to serve the public interest of equal treatment for adopted and biological children. We have no question that this is a laudable public policy goal, one the Commonwealth generally has advanced for many years. Unlike the Attorney General, however, we think there is a constitutional question here that affects the Legislature’s right to further the goal in the manner it has chosen. The constitutional question is not whether the 2009 amendment to § 8 directly results in deprivation of the plaintiff’s property. Rather, it is whether retroactive application of the change in § 8 to irrevocable, pre-1958 testamentary instruments, affecting both what beneficiaries receive or have a substantial expectation of receiving under those instruments and the dispositional choices of testators, settlors, and grantors, is unreasonable and therefore in violation of substantive due process. This is the question to which we turn next.
b. Constitutionality of the 2009 amendment as applied. There are constitutional limitations on the Legislature’s power to enact retroactive statutes — in brief, such statutes must “meet the test of ‘reasonableness.’ ” American Mfrs. Mut. Ins. Co. v. Commis
We must apply every rational presumption in favor of the 2009 amendment’s constitutionality, and the plaintiff bears the burden of showing otherwise. See Pielech v. Massasoit Greyhound, Inc., 441 Mass. 188, 193 (2004). “Ultimately, the ‘principal inquiry — as to reasonableness — is essentially a review of whether it is equitable to apply the retroactive statute against the plaintiff[].’ ” Doe, Sex Offender Registry Bd. No. 8725 v. Sex Offender Registry Bd., 450 Mass. 780, 788 (2008) (Doe), quoting American Mfrs., supra at 191. We consider three factors in assessing reasonableness: the nature of the public interest motivating the 2009 amendment’s enactment, the nature of the rights affected retroactively, and the extent of the 2009 amendment’s impact on those rights. American Mfrs., supra.
i. Nature of public interest. The 2009 amendment does not contain a preamble or other statement explaining what motivated the Legislature to enact it. However, as we have indicated, and as the parties agree, the Legislature most likely was attempting to equalize the inheritance rights of adopted and biological descendants. Although equal treatment of persons is certainly an important public interest, “the inquiry is not only whether the Legislature’s stated public interest is important, but also whether that interest is reasonably served by the statute.” Doe, 450 Mass, at 790 n.16. The answer to that inquiry in this case is not so clear.
Approximately fifty-two years separate the passage of the prospective-only 1958 amendment to § 8 from the effective date of the retroactive 2009 amendment in 2010. Accordingly, families had over one-half century to make compensatory estate plans in order to correct any inequalities that arose from the presumption of exclusion of adopted descendants under pre-1958 instruments. The opportunity for compensatory planning created by this time gap is illustrated by this case: in 1981, Julia executed the JB trust, which named Marten and Matthew as beneficiaries but not the plaintiff. Application of the 2009 amendment retroactively has the potential to upset the planning of
ii. Nature of rights affected. The key to this case is understanding the nature of the rights that retroactive application of the 2009 amendment affects. In the Billings line of cases previously discussed, this court explicitly declined to adopt the technical property law concepts of vested and contingent interests as the measure of when an inheritance right is “vested.” Billings, 361 Mass, at 240.
Under these principles, the plaintiff has a strong case. It is clear that her interest in the ACB trust vested prior to the effective date of the 2009 amendment, because she had received income distributions from the trust since her father David’s death in 2007. See Boston Safe Deposit & Trust Co. v. Dean, 361 Mass, at 247-248. The case would have been slightly more difficult if David were still alive and she had not yet received any income distributions, but even so, under our case law, her interest in the ACB trust vested at her birth. See Billings, 361 Mass, at 241. From the moment of her birth, there was a substantial biological probability that she would survive her father and uncles and become eligible for distributions from the trust, even though her interest could have been reduced by the birth of additional biological siblings or destroyed by her death before her father. Id.
Admitting Marten and Matthew to the class of “issue” entitled to be beneficiaries of the ACB trust would cut down the plaintiff’s vested interests significantly. If there were no 2009 amendment, the plaintiff would continue to be entitled to receive fifty per cent of the income of the ACB trust, and to be eligible to
In addition to the diminution of the plaintiff’s vested interests as a beneficiary, the 2009 amendment has an impact on the rights of testatrices, settlors, and grantors like Anna and Julia, who at the time of its enactment were long deceased and unable to change their estate plans in response to its new presumption. The Attorney General argues that the Legislature has the authority to override prior evidentiary rules, and that it is reasonable to apply the new rule retroactively because it is a rational, and rebuttable, presumption of a testator’s intent. Although it may be reasonable for the Legislature to make retroactive changes to rules of evidence governing tort or worker’s compensation proceedings, such changes are far less reasonable in the area of property law, and particularly regarding the construction of wills and trusts. “There is usually little danger of defeating reasonable expectations” when new tort rules are applied
Although much of our case law on the unreasonableness of retroactive changes to property law arises in the context of judicial decisions, the concern is equally valid in the legislative context. Regardless of their source — judicial or legislative — we are hesitant to apply rules affecting property rights retroactively because it is likely that testators, settlors, and grantors consult with attorneys and consider the existing state of the law when deciding how to draft instruments conveying inheritances; as noted, supra, under established principles, testators, settlors, and grantors are entitled to rely on the state of the law at the time of execution of a trust instrument. See Watson v. Baker, 444 Mass, at 495, citing Davis v. Hannam, 369 Mass, at 32. Considering Anna’s presumptive reliance interests, along with Julia’s, in conjunction with the plaintiff’s substantial interest in the ACB trust income and principal, we conclude that the private rights affected by the 2009 amendment are significant.
iii. Extent of impact. Finally, we must consider the extent to which the 2009 amendment abrogates those significant rights.
iv. Balancing. “When considering the retroactive application of civil statutes, we balance ‘opposing considerations.’ ” Doe, 450 Mass, at 793, quoting Leibovich v. Antonellis, 410 Mass, at 577. To summarize the previous discussion, the 2009 amendment redistributes the plaintiff’s significant, vested property rights, and although the goal of ensuring equal inheritances for adopted and biological children is commendable, the effectiveness of the 2009 amendment in serving this interest is questionable because it fails to take into account the opportunity for compensatory estate planning after the enactment of the 1958
We recognize that other States have decided this issue differently. See, e.g., Purifoy v. Mercantile-Safe Deposit & Trust Co, 398 F. Supp. 1082, 1084-1085 (D. Md. 1975), aff’d, 567 F.2d 268 (4th Cir. 1977) (no due process violation because presumption of inclusion of adopted children is rule of evidence and evidentiary rules are procedural and may be applied retroactively); First Nat’l Bank v. King, 165 Ill. 2d 533, 542-543 (1995) (same); Peele v. Finch, 284 N.C. 375, 382 (1973) (no due process violation because biological beneficiaries held contingent, rather than vested, interests); Prince v. Nugent, 93 R.I. 149, 164-165 (1961) (no constitutional violation because biological beneficiary’s rights were not vested and presumption is evidentiary rule with prospective application at time instrument is construed). But see McClain v. Taylor, 904 P.2d 1316, 1319 (Colo. 1995) (holding that “wills should be construed by the law as it existed when the testator died, thereby excluding adopted children as beneficiaries unless the will indicates an intent to include adopted children”); Thomas v. Trust Co. Bank, 247 Ga. 693, 693 (1981) (“In order to effectuate the testator’s intent... the adoption laws in effect at the date of the testator’s death will determine the class of beneficiaries entitled to take under a testamentary trust in the absence of an express contrary intent”). Considered in light of our own common law and approach to retroactivity of statutes, we believe that the cases upholding retroactive application give insufficient weight to the substantiality of the interests enjoyed by the plaintiff and other biological beneficiaries and the bedrock principle that a testator is entitled to rely on the state of law at the time of execution of a testamentary instrument. Accordingly, we reach a different result.
Although our discussion has focused on the factual situation before us, what we have said presumably applies to others who, like the plaintiff, have significant interests in pre-1958 trusts or
3. Conclusion. The case is remanded to the Probate and Family Court for further proceedings consistent with this opinion.
So ordered.
We use first names because multiple family members have the same surname.
The amendment, which first appeared in St. 2008, c. 524, § 2, was approved by the Legislature on January 15, 2009, and by St. 2009, c. 27, §§ 102, 160, was made effective July 1, 2010. Although the 2009 amendment applies
Rachel A. Bird Anderson (plaintiff), Marten F. Bird (Marten), and Matthew G. Bird (Matthew) all were born long after the death of Anna Child Bird (Anna).
We acknowledge the amicus briefs of Douglas D. Lee; the Attorney General; Boston Bar Association; New England Legal Foundation; and Joseph Lee, IV, Kathleen Lee Deminico, Jonathan K. Lee, Deborah S. Lee, and Carolyn G. Lee.
The facts are taken from the parties’ statement of agreed facts, as well as exhibits A through E to the plaintiff’s complaint for declaratory judgment. The parties have agreed that the exhibits are true, accurate, and complete.
Anna’s testamentary trust (ACB trust) expressly excluded her granddaughter (the daughter of Charles Sumner Bird, Jr. [Charles Jr.]), and her issue.
“Balance” refers to the provision of the ACB trust authorizing income distributions to Anna’s son, Charles Jr., and her daughter-in-law, Julia Bird (Julia). Both have been deceased for many years.
It appears that because Christopher Bird (Christopher) also was deceased by the time of the death of Charles Sumner Bird, IH (Charles HI), the remaining fifty per cent of the ACB trust income has been divided equally among Christopher’s four biological daughters.
Although the notice did not address what would happen once the ACB trust terminates, if the 2009 amendment were to apply, then at termination the trust principal would be divided in the same proportions, with the plaintiff, Marten, and Matthew each receiving a sixteen and two-thirds per cent interest. It appears from the information in the parties’ statement of agreed facts that Anna had no great-grandchildren at the time of her death in 1942. Accordingly, because both David Bird (David) and Christopher predeceased Charles EH, the termination date for the trust is measured from Charles Hi’s death in 2010, meaning that the ACB trust will terminate in 2031.
In relevant part, St. 1969, c. 27 (1969 amendment), provides as follows:
“Section 1. The words ‘child,’ ‘grandchild,’ ‘issue,’ ‘heir,’ or ‘heir-at-law,’ or their respective equivalents, in a grant, trust settlement, entail, devise or bequest, shall include one who is adopted to the same extent as if bom to the adopting parent or parents in lawful wedlock . . . unless the contrary plainly appears by the terms of the instrument.
“Section 2. The provisions of [G. L. c. 210, § 8], as amended by [§ 1] of this act, shall be applicable to all grants, trust settlements,*305 entails, devises or bequests whether the same were executed or effective before or after the effective date of this act provided that said provisions shall not apply to any such grant, trust settlement, entail, devise or bequest which was executed or effective prior to August [26, 1958,] with respect to any interests or right therein which had vested prior to the effective date of this act.”
Article 10 of the Massachusetts Declaration of Rights provides, in pertinent part: “Each individual of the society has a right to be protected by it in the enjoyment of his life, liberty and property, according to standing laws. . . . [N]o part of the property of any individual can, with justice, be taken from him, or applied to public uses, without his own consent, or that of the representative body of the people.”
BNY Mellon, N.A., the trustee of the ACB trust, has declined to take a position on the constitutionality of the 2009 amendment. Neither Marten nor Matthew has filed an appearance or a brief in this case, nor have Christopher’s biological daughters done so.
See also Watson v. Baker, 444 Mass. 487, 495 (2005), quoting Davis v. Hannam, 369 Mass. 26, 32 (1975) (in 1936, testatrix “executed her will ‘with assistance of counsel, and it would not be unreasonable to assume that the testat[rix] was familiar with the law governing adopted issue, which had been in effect since 1876, and that if [the testatrix] had wished to include adopted issue [she] would have done so in accordance with the law’ ”); Powers v. Wilkinson, 399 Mass. 650, 654 (1987) (“This rule of construction was operative at the time the trust in question was executed, and it concludes the question of the donor’s intent. Because nothing indicates an intent by the donor to include nonmarital issue, precedent requires us to presume that the donor intended, in accordance with the law extant at the time the instrument was executed, to exclude nonmarital descendants from the class denoted by her use of the word ‘issue’ ”).
See State St. Bank & Trust Co. v. D’Amario, 368 Mass. 542, 549-550 (1975) (“Whether a given ‘interest’ or ‘right’ is to be called ‘vested’ as against the adopted child turns on the substantiality of the chances that the person concerned would in fact enjoy the interest or right, apart from any claim by the adopted child, and the substantiality of the threat to that enjoyment that would be created by admitting the adopted child as a taker on the same footing as a biological child”). See also Boston Safe Deposit & Trust Co. v. Dean, 361 Mass. 244, 247-248 (1972).
The Attorney General argues that the line of cases following Billings v. Fowler, 361 Mass. 230 (1972), did not address whether the rights at issue were vested sufficiently so as to implicate constitutional concerns, but only whether the rights were vested within the meaning of § 2 of the 1969 amendment, the provision that protected “vested” rights from retroactive application of the statutory presumption. However, given this court’s definition of a vested right under the savings provision as one that is “sufficiently established to constitute an interest or right which had accrued to its holder,” id. at 240, the analysis under § 2 of the 1969 amendment is no different from the analysis used to determine when a right has vested such that retroactive legislation affecting that right may violate substantive due process. If a right has accrued to its holder, then it is necessarily a right that has also vested in the holder. See Black’s Law Dictionary 1564 (6th ed. 1990) (defining “[v]ested rights”: “In constitutional law, rights which have so completely and definitely accrued to or settled in a person that they are not subject to be defeated or canceled by the act of any other private person, and which it is right and equitable that the government should recognize and protect, as being lawful in themselves, and settled according to the then current rules of law, and of which the individual could not be deprived arbitrarily without injustice”).
We recognize that, on the surface, application of the pre-1958 presumption seems unfair to the plaintiff’s adopted brothers. However, the history of the prospective-only 1958 amendment and the Billings line of cases both clearly excluded adopted issue from taking under the ACB trust, before the 2009 amendment. Marten and Matthew did not have the same character of interest in the ACB trust as the plaintiff. That is, their interest, if any, was not vested; it was, at best, a hope, not a settled expectation. Cf. New England Merchants Nat’l Bank v. Groswold, 387 Mass. 822, 828 (1983) (adopted beneficiary granted no rights under 1969 amendment because biological beneficiary’s rights had already vested, precluding application of 1969 amendment).
The rule against perpetuities “places a limit on how long certain types of trusts may continue.” Hochberg v. Proctor, 441 Mass. 403, 414 (2004). It is “classically defined as the rule that ‘[n]o interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.’ ” Id. at 406 n.8, quoting J.C. Gray, Rule Against Perpetuities § 201 (4th ed. 1942).
We are aware of at least one other trust in a similar situation, because the family members involved have submitted amicus briefs in support of both sides of this case.
Even if Julia had not engaged in compensatory estate planning, we would still find the law unreasonable, because of the potential for such planning over the fifty-two year period between the effective dates of the 1958 and 2009 amendments.