Trust documents can use the term “spouse” to identify a class of beneficiaries or actors who are related to another class of beneficiaries—usually the grantor’s descendants. If one of the grantor’s descendants has a same-sex partner, is that partner entitled to be treated as a spouse under the grantor’s trust? The answer depends on how the trust defines the term “spouse,” the facts surrounding how and where the descendant and the same-sex partner chose to recognize their relationship, the trust’s governing law provision and the location of the lawsuit. Depending on the particular facts, the answer to who qualifies as a spouse may be straightforward, involve choice-of-law issues or require interpretation of a latent ambiguity. 

 

Relationship Recognition 

To determine if a same-sex partner is a beneficiary as a spouse, it’s important to understand the different types of recognition available to same-sex partners and the jurisdictional issues raised, because not every jurisdiction offers every type of recognition. Importantly, the Defense of Marriage Act prohibits federal recognition of same-sex relationships. Federal recognition of different-sex marriages means that a spouse in a different-sex marriage is treated as married for income tax purposes, can transfer unlimited assets to the other spouse tax-free during life and at death and can receive certain federal benefits after the other spouse’s death. The fact that the federal government can’t recognize same-sex relationships means that, even in jurisdictions that permit same-sex marriage, different-sex and same-sex spouses receive different legal treatment. 

Same-sex marriages are also inherently different from different-sex marriages because intrastate recognition of marriages is governed by comity (rather than full faith and credit), which doesn’t require a jurisdiction to recognize a marriage that it finds against its public policy.1 Many jurisdictions claim a public policy that opposes recognition of same-sex marriages, but no jurisdiction bans recognition of  different-sex marriages performed in other jurisdictions.

Connecticut, the District of Columbia, Iowa, Massachusetts, New Hampshire, New York and Vermont permit same-sex civil marriages. (Maryland and Washington have passed pro-same-sex marriage legislation subject to referenda this year.) In addition, California (if married before Nov. 5, 2008), Maryland and New Mexico recognize out-of-state same-sex marriages. In these jurisdictions, same-sex parties to a marriage should receive identical rights as different-sex parties. 

California, Delaware, the District of Columbia, Hawaii, Illinois, Nevada, New Jersey, Oregon, Rhode Island and Washington offer same-sex couples civil union or comprehensive domestic partnership licenses. (In this article, civil unions include comprehensive domestic partnerships.) In each jurisdiction that offers civil unions, same-sex parties to a civil union should receive identical state rights as different-sex parties to a marriage.

There are several other ways same-sex couples may be able to recognize relationships, including domestic partnership registries, religious marriage and through estate-planning documents. These types of relationship recognition offer far fewer rights than marriage or civil union.

Because different jurisdictions have varying laws recognizing same-sex relationships, jurisdictional issues are part of the trust construction mix. If one jurisdiction recognized a couple’s relationship, a second jurisdiction recognized their residence, a third jurisdiction controlled the governing law and a fourth jurisdiction was the location of the lawsuit, the laws of all four jurisdictions could affect whether the term “spouse” applies to the relationship.

 

Three Definitions 

The way that a trust document defines “spouse” affects whether a same-sex partner can qualify as a beneficiary. We’ll focus on three possible definitions of “spouse.” 

 

1. Based on the laws of the jurisdiction where the couple married. The trust can say that the laws of the jurisdiction where the couple married will define a “spouse.” Here’s an example: 

The “spouse” of a person is the individual to whom such person is married and from whom such person is not legally separated on the date in question under the law of the jurisdiction where they married.  

How this definition applies to same-sex marriages performed in states that recognize those marriages is unambiguous:

 

An ambiguity in a donative document is an uncertainty in meaning that is revealed by the text or by extrinsic evidence other than direct evidence of intention contradicting the plain meaning of the text.2 

 

If a same-sex couple married in Iowa, there’s no question that the couple was legally married “under the law of the jurisdiction where they married,” and there would be no ambiguity that they would qualify as spouses under this definition. Likewise, a couple who married in Canada, or another foreign country that allows same-sex marriage, would qualify as spouses, because foreign jurisdictions are treated like domestic jurisdictions for purposes of marriage recognition.3 Finally, there’s no choice-of-law issue, because the definition is clear that the “law of the jurisdiction where [the couple] married” determines the validity of the marriage.

The fact that the jurisdiction providing the governing law of the trust or the jurisdiction where the suit was filed may have a public policy prohibiting recognition of same-sex relationships doesn’t affect the analysis. A trust is a private relationship and jurisdictions’ laws and public policy prohibiting same-sex relationship recognition apply only to the public sphere.4 Similarly, evidence that the grantor of the trust didn’t recognize same-sex marriage, or was even opposed to same-sex marriage, doesn’t affect the analysis. The grantor chose to define “spouse” based on a moving target—jurisdictions’ marriage laws that can change over time. Thus, the grantor’s intent was to define “spouse” based on laws as they exist at the time of a marriage, not to define the term based on who the grantor thought should be a spouse.

How to deal with dissolution of a same-sex marriage is a more complex question. The definition expresses the grantor’s intent to disqualify an ex-spouse as a beneficiary. But, if a same-sex couple legally married in one jurisdiction, then moved to a new jurisdiction that doesn’t recognize their marriage, they may not be able to divorce.5 This would raise a latent ambiguity: The terms of the trust show the grantor’s intent that once a marriage ends, the ex-spouse shouldn’t be a beneficiary, but the couple can’t be “legally separated.”6 In this case, the grantor’s intent should be honored, and if one of the spouses in the same-sex marriage says that the relationship is over, the two individuals shouldn’t be considered spouses under this definition.7 

Finally, relationships recognized with a domestic partnership, a religious marriage or through estate-planning documents aren’t legal marriages and won’t satisfy this definition of “spouse.” A relationship recognized by a civil union, however, creates a latent ambiguity, because a civil union doesn’t use the term “marriage,” but all civil union statutes give a party to a civil union the identical rights (under the jurisdiction’s law) as a spouse in a marriage.8 

When a latent ambiguity is present, the first step in interpreting it is to see if the grantor’s intent can be determined from the four corners of the document.9 

Courts may also resort to rules of construction, or judicial presumptions, to determine the meaning of an instrument’s terms, but only when the testator’s intent can’t be ascertained from the language of the instrument.10

It seems unlikely that the four corners of most trust documents—particularly those drafted before civil union laws were enacted—will allow a court to divine the grantor’s intent about civil union partners. So, it will likely be necessary to resort to the rules of construction. The key rule of construction in this case is that “[t]echnical words must be taken in their technical sense, in the absence of explanation on the face of the will.”11 A party to a civil union is a type of status a jurisdiction gives to an individual. And, in every jurisdiction that offers the status of a party to a civil union, the technical meaning given to the term by statute is a status that’s identical to the spouse’s status.12 Thus, the technical meaning of spouse includes parties to a civil union.

 

2. A legal marriage. The next sample definition of the word “spouse” defines it as a legal marriage, but doesn’t specify the location:

The “spouse” of any person, other than me, means the individual legally married to, and not legally separated from, that person on the date of the distribution then in question or on the date of the prior death of that person.

This definition again precludes domestic partners, spouses in religious marriages and partners identified in estate-planning documents from qualifying as spouses, because these relationships aren’t legal marriages for the reasons already discussed. It’s less clear whether same-sex parties to a legally performed marriage or civil union qualify as spouses. For example, if a same-sex couple is married in Iowa, which recognizes the relationship, and the spouse is potentially a beneficiary of a trust governed by the law of Arkansas, which doesn’t recognize the marriage, would the spouse be a beneficiary?

To determine if there’s an ambiguity about whether this couple is legally married for purposes of this trust, we need to understand the term’s plain meaning.13 The Merriam-Webster dictionary defines “legal” as: 

 

a: deriving authority from or founded on law:
de jure

b: having a formal status derived from law often
without a basis in actual fact: titular 

c: established by law; especially: statutory.14

 

Under this definition, whether a marriage is legal depends on whether it was “derived from” or “established by” law. So, if the marriage was legally recognized in the jurisdiction where it took place at the time it was performed, then the marriage was “established by” law, the couple is “legally married” and they qualify as spouses.

However, if a court were to find the plain meaning of this definition of “spouse” ambiguous when applied to the fact pattern described above, then it would have to construe the term and determine whether it includes spouses in a same-sex marriage. If the trust must be construed, then the trust’s governing law controls the construction.15 In any jurisdiction: 

 

[t]he validity of marriage will be determined by the local law of the state which, with respect to the particular issue, has the most significant relationship to the spouses and the marriage…16 

 

Thus, the issue of whether two people in a same-sex marriage are legally married and should be considered spouses is determined by the law of the jurisdiction with the most significant relationship to this issue.

Several factors must be considered to determine the state with the most significant relationship: 

 

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied.17

 

In our example of the same-sex couple married in Iowa, with the trust governed by Arkansas law, the process of determining the beneficiaries of a private trust doesn’t affect the needs of the interstate and international systems. The policies of the forum jurisdiction where the lawsuit was brought aren’t relevant because the trust states that it’s governed by Arkansas law. The policies of other interested states cut both ways. Arkansas, the state providing the controlling law, has a public policy against recognizing the same-sex marriage. On the other hand, the interests of the jurisdiction where the couple married go in favor of recognizing the marriage. Likewise, the protection of justified expectations goes in favor of recognizing the same-sex marriage. Because there’s a basic policy of trust construction that disfavors constructions that lead to invidious exclusions of beneficiaries,18 the fifth factor goes in favor of recognizing the same-sex marriage. The final two factors, the predictability of the result and the ease in the determination and application of the law, both go in favor of recognizing the same-sex marriage, because a rule that simply looks at whether the marriage was valid in the forum where it was performed is more predictable and easier to apply. On balance, these factors lean toward recognizing the same-sex marriage and qualifying the couple as spouses, even when the governing law of the trust is provided by a state that doesn’t recognize the relationship.

 

3. When the trust doesn’t define “spouse.” Many trust documents that use the term “spouse” don’t define it. Because there’s no definition in the document, to understand whether a party to a same-sex relationship could qualify as a spouse, we need first to consider the plain meaning of the word. The Merriam-Webster dictionary defines “spouse” as “married person: husband, wife.”19 Similarly, Black’s Law Dictionary, 9th Edition, defines “spouse” as “[o]ne’s husband or wife by lawful marriage; a married person.” So, the plain language of the term spouse shows that it means a “legal marriage,” and the analysis from the previous section applies.

 

Fairness

It’s tempting to view the issue of including same-sex partners as trust beneficiaries through a fairness or civil rights lens. Other classes of potential beneficiaries, like adopted or illegitimate children, have seen the laws surrounding interpretation of ambiguous trust terms evolve to become fairer and include them as beneficiaries under an increasingly broad set of fact patterns.20 Like adopted and illegitimate children, society has historically applied different rules to same-sex couples, but trends are now to treat them in the same way as different-sex couples. 

While we believe it’s important that same-sex partners are treated more fairly under trust documents, this problem is being solved without expanding the definition of a “spouse.” As already discussed, if a couple is in a legal marriage or civil union, they should qualify as “spouses” under any trust that doesn’t specifically exclude them. This conclusion rests on the plain meaning of the word “spouse” and is supported by long-standing conflict-of-law rules. Given the rapid expansion of the availability of same-sex marriage, there’s simply no need for trust law to evolve to achieve greater parity between same-sex and different-sex couples. Consequently, courts
deciding these issues are unlikely to stick their necks out and redefine “spouse” when the litigants could simply travel to a state like Iowa and get married.

 

Moving Forward

Given the numerous and changing types of relationship recognition available to same-sex partners, as well as the associated jurisdictional issues, whether a same-sex
partner should be considered a “spouse” for trust administration purposes can be a complex issue. But, the issue is simplified when one considers the plain meaning of the word “spouse” and the long-standing conflict-of-laws principles we’ve discussed.

A lawyer advising a couple trying to qualify a same-sex partner as a beneficiary should suggest they take a trip to Iowa, Canada or another jurisdiction that grants same-sex marriage licenses without a residency requirement, and tie the knot. While this puts a somewhat greater burden on same-sex couples than different-sex couples who can just marry in their home jurisdiction, it’s a burden that will eventually become a thing of the past as same-sex marriage becomes available in more jurisdictions.

 

—The authors would like to thank Christine Albright, a partner at Holland & Knight in Chicago, for suggesting the idea for this article. 

 

Endnotes

1. See, e.g., Gaines v. Poindexter, 155 F. Supp. 638, 642 (W.D. La. 1957), quoting Succession of Gabisso, 119 La. 704 (1907) (“It is a well established rule of conflict of laws that the spirit of comity between states does not require a state to recognize a marriage which is contrary to its own public policy.”)

2. Restatement (Third) of Property (Wills and Other Donative Transfers)
Section 11.1 (2003).

3. Restatement (Second) of Conflict of Laws Section 284 (1971).

4. See, e.g., Fla. Stat. Ann. Section 741.212(3) (“For purposes of interpreting any state statute or rule, the term ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the term ‘spouse’ applies only to a member of such a union.”) (emphasis added).

5. See, e.g., Chambers v. Ormiston, 935 A.2d 956 (R.I. 2007).

6. See In re Rice’s Estate, 406 So.2d 469, 476 (Fla. Dist. Ct. App. 1981) (latent ambiguity is one which arises in applying the words of a will to the subject matter or object of a devise or to the devisee).

7. See In re Estate of Beaver, 206 N.W.2d 692 (Iowa 1973) (giving effect to testator’s intent in spite of impossibility of literal compliance with will provisions).

8. See, e.g., 750 ILCS 75/5, Illinois Religious Freedom Protection and Civil Union Act (“This Act shall be liberally construed [to] . . . provide persons entering into a civil union with the obligations, responsibilities, protections, and benefits afforded or recognized by the law of Illinois to spouses.”)

9. Harris Trust & Sav. Bank v. MacLean, 186 Ill.App.3d 882, 886 (1st Dist. 1989).

10. Ibid.

11. Mason v. Baily, 6 Del. Ch. 129 (1888).

12. See, e.g., 750 ILCS 75/5.

13. See George G. Bogert, The Law Of Trusts And Trustees, Section 182 (“intent is first sought by careful examination of the trust clause in question, giving the words in that clause their ordinary meanings”).

14. www.merriam-webster.com/dictionary/legal.

15. See Uniform Trust Code Section 107.

16. Restatement (Second) of Conflict of Laws Section 283 (1971). 

17. Ibid, Section 6. 

18. Restatement (Third) of Property (Wills and Other Donative Transfers) Section 11.3(m) (2003).

19. Supra note 14.

20. See, e.g., Brown v. Trust Co. of Georgia, 196 S.E.2d 872 (Ga. 1973) (holding that law at time of distribution, not at time trust was executed, controlled whether adopted child was a beneficiary); Sola v. Clostermann, 679 P.2d 317, 320 (Or. Ct. App. 1984) (finding illegitimate child a trust beneficiary); see also Ebitz v. Pioneer National Bank, 361 N.E.2d 255 (Mass. 1977) (holding that trust term “young men” should include “young women,” because reading the trust as a whole showed a testamentary scheme to benefit all law students).