The Doctrine of Probable Intent

On February 9, 2012, the trial Court decided In the Matter of the Markowitz Insurance Trust, Docket No. 12-00220, wherein the Court examined the Doctrine of Probable Intent.

Here, the decedent’s created a Trust in 1993 which was funded with a Life Insurance policy on the lives of both decedents.  The Trust was set to terminate on January 1, 2005 if both parents had died by that date; however, the Trust document was not clear as to what would happen if one or both of the parents were alive as of that date.

Plaintiffs seek a judgment immediately terminating the David Markowitz and Rosalie Markowitz Insurance Trust.  As Defendant Trustee contends, a literal construction of the language of the Trust Instrument suggests that the Trust will not terminate until both Plaintiffs have died and any descendants of the Plaintiffs entitled to a distribution have reached the age of 35 years.  As Plaintiffs point out, a literal application of the language would lead to the result that had both Grantors died on December 31, 2004, the Trust Property would have been distributed outright to Plaintiffs, but if either Grantor survived for one additional day, the Trust Property would have been held in further trust throughout Plaintiffs’ lifetimes.

Plaintiffs ask the Court to apply the doctrine of probable intent, which was first set forth in Fidelity Union Trust Co. v. Robert, 36 N.J. 561 (1962), codified in N.J.S.A. 3B:3-33.1 and more recently discussed in In re Estate of Payne, 186 N.J. 324, 335 (2006).  The doctrine provides that in determining a testator’s subjective intent, courts should focus on the dominant plan as expressed in the entire document and considered in the context of relevant circumstances.  Thus, extrinsic evidence of the testator’s circumstances may be admitted to aid the court in ascertaining probable intent.  This extrinsic evidence can include a testator’s own expressions of his or her intent. Such evidence is admissible to show whether an ambiguity exists and, if so, to resolve it.  The decision notes that a Court’s function is to ascertain the intent by a preponderance of the evidence and, once it is made manifest, to carry out the intent even though imperfectly expressed in the document.  In such a case, any language contrary to that intent will thus give way to that intent.

In the end, the Court is satisfied that the Grantors, more probably than not, did not intend that the Trust continue for the entire lives of their children.  From the language of the Trust Instrument and the extrinsic evidence, the court discerns no rational basis for the Grantors to have wanted Plaintiffs to receive distribution of the trust assets outright if the Grantors died before January 1, 2005, but not if they died after that date.  The Court entered judgment immediately terminating the Trust and directing Defendant to distribute the balance to Plaintiffs.