## Facts

- In 1944, Charles Breyman created an inter vivos trust providing that, after specified deaths, the corpus would be distributed to his “living grandchildren and to the living children of each deceased grandchild.”
- Breyman died in 1945; his daughter, Marie Breyman Mills, survived him.
- Marie later exercised a power under the trust to postpone distribution until after the death of her son, Breyman’s grandson, Robert E. Mills.
- Robert E. Mills married Esther in 1957 and, in 1962, adopted Esther’s two children from prior marriages, Roxanne Pugh and Judith Muth.
- After Esther’s death, Robert remarried and had a natural child, Robert David Mills.
- Ohio enacted R.C. 3107.15 effective January 1, 1977, providing that an adopted person is generally treated as a natural child of the adopting parent for purposes of laws and instruments unless expressly excluded.
- Robert E. Mills died in 1985; the trustee sought construction of the trust to determine whether the class term “children of each deceased grandchild” included the adoptees (Pugh and Muth) or only the natural child (Robert David).

## Issues

1. Whether R.C. 3107.15 may be applied to construe class-gift language in a trust created before the statute’s effective date.
2. Whether an inter vivos trust’s class terms are governed by the law in effect when the trust was created, absent contrary intent in the instrument.
3. Under the governing law, whether adopted children of a grandchild fall within the trust’s term “children of each deceased grandchild.”

## Decision

- The Supreme Court of Ohio reversed the court of appeals and affirmed the trial court.
- R.C. 3107.15 applies prospectively only, absent a clear legislative statement to the contrary, and does not retroactively change the meaning of class terms in a trust created before January 1, 1977.
- Provisions of an inter vivos trust are governed by the law existing at the time of the trust’s creation, absent contrary intent within the instrument.
- Applying the pre-1977 “stranger-to-the-adoption” doctrine to the 1944 trust, the adopted children (Pugh and Muth) were not included within “children of each deceased grandchild.”
- The natural child, Robert David Mills, was entitled to the relevant share as the “child” of a deceased grandchild within the meaning of the trust.

## Legal Principles

- Statutes are presumed to operate prospectively unless the legislature clearly indicates retroactive application.
- R.C. 3107.15 applies prospectively from January 1, 1977, to documents, statutes, and instruments within its temporal reach and does not rewrite earlier donative instruments.
- An inter vivos trust is construed under the law in effect at the time of its creation unless the trust shows a contrary intent.
- Under Ohio’s pre-1977 stranger-to-the-adoption doctrine, absent language indicating inclusion, an adopted child is generally not treated as a member of a class (e.g., “children”) in a donative instrument executed by someone other than the adopting parent.

## Conclusion

The court held that later-enacted adoption legislation did not retroactively alter a 1944 inter vivos trust’s class-gift language; because trust interpretation was fixed by the law at creation and the instrument did not show an intent to include adoptees, the adopted children were excluded and the natural child took the share designated for “children of each deceased grandchild.”


Ohio Citizens Bank v. Mills, 45 Ohio St. 3d 153, 543 N.E.2d 1206 (Ohio 1989)