Sec. 7. (a) As used in this section, "descendant" includes the following:
(1) A child adopted before the child is twenty-one (21) years of age by:
(A) the settlor; or
(B) the settlor's descendants.
(2) A descendant of a child adopted as set forth in subdivision (1).
(3) A child who is born of the mother out of wedlock in either of the following circumstances:
(A) The mother is a descendant of the settlor.
(B) The mother is the settlor.
(4) If the right of a child born out of wedlock to inherit from the father is or has been established in the manner provided under IC 29-1-2-7, the child, in either of the following circumstances:
(A) The father is a descendant of the settlor.
(B) The father is the settlor.
(5) A descendant of a child born out of wedlock as set forth in subdivisions (3) and (4).
(b) If:
(1) an estate, real or personal, is devised to a descendant of the settlor; and
(2) the beneficiary:
(A) dies during the lifetime of the settlor before or after the execution of the trust; and
(B) leaves a descendant who survives the settlor;
the devise does not lapse, but the property devised vests in the surviving descendant of the beneficiary as if the beneficiary had survived the settlor and died intestate.