Inheritance and Estate Planning Advice for Inheritors in Non-Traditional Families
Inheritance and Estate Planning Advice for Inheritors in Non-Traditional Families
Read transcript highlights or listen to the full episode to learn from Tabitha Koh, Managing Partner at Bouneff, Chally, and Koh:
Legal issues parents who had children via IVF, surrogacy, or adoption need to watch.
When second parent adoption is necessary for LGBTQ+ families.
The legal process for parents and families who adopt, or use a surrogate or gestational carrier.
What inheritors who were born into non-traditional families need to ask about their parent’s estate plan.
Posted on February 26, 2024 by Katherine Fox.
Inheritance and Estate Planning Advice for Inheritors in Non-Traditional Families
What legal issues do parents of children born via IVF, surrogacy, or adoption need to be aware of?
Katherine (01:45)
At Sunnybranch my work with clients tends to focus on the other side of the spectrum. So not so much the planning, but what happens after someone dies, when all of that planning gets put into practice or where the rubber meets the road. But I have a real personal interest in this. My two children were both created with the help of an egg donor.
And so I understand what it looks like when, you know, from one small piece of what the non-traditional family building experience looks like, I know what our experience was and some of the stressors and the questions that come along with that. So I'm really excited to have this conversation and share some information, maybe with people who meet it or maybe with some people who are just curious and want to look more. Maybe they have a friend or a family member who's going through this and want to be able to lend support.
My first broad question for you is for those of us who built our family in non-traditional ways, whether it was through IVF, surrogacy, adoption, what are the major legal issues that we need to be aware of?
Tabitha (03:05)
So the overarching issue that everyone should be tracking is to have legal clarity in the relationships between the family members.
So in an ordinary conception, a married straight couple has a baby in the traditional way, there's no need for them to look further to be sure that the legal parent-child relationship is established between both parents and the child, and that the legal relationship is established between the couple.
That happens through marriage and through conception and birth. When you have used alternate means to create your family, it's worth taking the extra time to confirm that you have legal clarity as to the relationships among the family members.
When is second parent adoption necessary for LGBTQ+ families?
Tabitha (04:22)
Absolutely. So we use the term second parent adoption to mean the situation where you're using the legal adoption process, not to sort of create a brand new family where there's not already an emotional relationship, but rather to give the legal security of a parent-child relationship for both parents in a non-traditional or same-sex relationship.
So the way that we usually approach that is the couple comes in as a, as a co-petitioners, they're both working together.
Often I'm contacted by people early in their pregnancy once they are confident that the baby's gonna stick and they wanna really know that from as soon as possible after the moment of birth, both of those parents are legal parents.
Most often this arises in the case of a lesbian couple or a couple that identifies as female, both of them, and who likely have married or have a domestic partnership, which gives them some security under state law that the non-birthing parent will still be a legal parent of the child.
But it is still strongly recommended by practitioners in this area of the law that a court judgment or order, depending on your state, is obtained that makes a clear legal parent-child relationship between the non-birthing parent and the baby.
Inheritance and Estate Planning Advice for Inheritors in Non-Traditional Families
How does state law affect the presumption of parentage?
Tabitha (06:20)
So portability is actually one of the main reasons to do an adoption. We are really confident that an adoption in one state that is properly obtained is going to be recognized in other states or even other countries, frankly. The concern is that the presumption of legal parenthood that you get in a pro-family state like Oregon would not necessarily be recognized or adequately protected in other states.
That's not the way it should be. I regret that that's the way it is. But when it comes to legal clarity and protection for children and parents and same-sex families, the adoption is really the way to confirm that you've done all you can to get that legal security.
How does the legal adoption process look different between surrogacy and adoption?
Tabitha (10:21)
So it looks quite different when it comes to a surrogacy conception. So when I'm talking about surrogacy, generally I mean gestational surrogacy. That is the case where the woman who's giving birth, who is carrying the baby for the intended parent family is not genetically related to the baby.
If it's a scenario of traditional surrogacy, that is a woman is carrying the baby for a family, intending that they will be the parents, but her egg was used, so she conceived typically just through artificial insemination with the father's sperm.
In that scenario, it's strongly recommended that you treat it as an adoption. So that woman would be relinquishing parental rights after the baby was born. And even though there was lots of understanding and confidence in the intended plan, the court is going to need to be involved in terminating her parental rights.
So that's the current law in the state of Oregon. And anybody who's contemplating a traditional surrogacy really needs good legal advice before they get too far into it to be sure that that's safe. For gestational surrogacy, where an egg and sperm from either outside donors or the intended parents are combined to create an embryo, and the embryo is transferred into the uterus of the gestational surrogate.
In that scenario, we have a different process we're able to use in Oregon, a parentage judgment.
It basically involves all of the involved adults, so the surrogate and her husband or partner, she has one, and both intended parents, or only one if it's a single parent, going to the court with their respective lawyers and asking for an order that declares that the intended parents are the exclusive legal parents and that the gestational surrogate is not a legal parent without parental rights or parental responsibilities.
So in that type of family building structure, the court piece is essential because otherwise the birth certificate will list the surrogate as the mother and that will be the documents the family has.
Katherine (12:38)
Is there a time frame where you need to get that done? I imagine you don't want to leave it until the day before she's about to give birth.
Tabitha (12:47)
You're right. Now, in the case of a surrogacy, a gestational surrogacy birth or expected birth, typically the legal documents are put into place between about 20 weeks and 30 weeks of gestation. So basically once you're confident in the pregnancy, but before you get to that third trimester and the possibility of early delivery. And the process is really well established here in Oregon.
And as long as you're working with an attorney that has experience in the area, I would expect it to go smoothly and without issues.
“In my own family, I was able to be adopted by my stepmom who had been in my life since I was nine years old...But my stepmom and I had no legal relationship with each other. And this actually becomes an issue when you think about the end of life concerns and the right to visit somebody in a hospital, the right to be involved in their medical decision making, where having that legal parent-child relationship makes a world of difference. ”
What is the legal process for adoptive parents?
Tabitha (13:34)
Yeah, so if we're talking about an adoption that is really creating a new family, so a child is coming into your home, not a child that one or the other of the parents has birthed or conceived with surrogacy.
That type of adoption requires a straightforward adoption petition process working through the court in the county where you reside to present the court with the relinquishment of consent documents that have been signed by the birthing parents, who's the legal mother and the legal father, if there is one, and asking the court to approve the home study that you've had completed and create this new family unit.
So that adoption process, really I think of it as the combining of elements from two families. So a child has been born to one family or will be born to one family. Another family has been selected by the birthing parents for adoption. And the adoption process is sort of settling the legal matters with regard to who is the legal parent of the baby.
How do you legally protect children in an inter-family adoption?
Tabitha (15:29)
To a lot of families who are undergoing or going through a traditional adoption process, they can't imagine the legal part not happening right away, because they are looking for security that the birth parents won't be able to revoke their consents and that the child sort of is legally and firmly a part of their family.
Obviously the emotional relationships are complicated and ongoing. And that's actually something to note when we are completing an adoption between two families. The relationships, the emotional sense of family and the desire to be involved in the child's life does not necessarily end. And we have a long history in Oregon of open adoptions where a birth family continues to be able to communicate and have contact with the child in the adoptive family.
But legally, and this is part of my job, my mission as an attorney is to give legal clarity to the family and that is who are the parents and who are not the parents and who has that ultimate authority in the eyes of the law. Okay, so there are lots of adoptions that happen in a much more organic and less sort of, less, emotionally fraught way.
Those are inter-family adoptions. In some communities that we have here in Oregon, you might have a child that is being raised by an aunt and uncle and knows them as their parents. No consents have been signed, no paperwork has been filed.
It's just been a matter of course that that's how the family has resolved raising of this child. We see the same thing as you suggested in second parent adoptions where people get home from the hospital, they're with a newborn, they just don't even think about these other pieces of the process. And there's not a time limit on when that can be completed. I see in some cases, the issue comes up when the child is 15 and a half and wants to get a driver's permit. And they realize that, oh, mom and dad aren't actually the people that are on the birth certificate and they come in to get that adoption completed.
What are adult adoptions and why are they important for inheritors?
Tabitha (17:53)
That's a case where really my role is to give the legal structure on top of a family relationship that is already very well established and long term.
I actually, can I add a word about adult adoptions? Because it's not something most people think of, but it's also very close to my heart. Okay, so there's no rule in Oregon that you can't adopt somebody after they're an adult. And at the time that someone's 18, they can choose to be adopted as long as the petitioner, the adopting parent and the person being adopted both agree.
They don't need to even inform or involve their other legal parents. They're an adult and they're able to make that decision. So there are some situations where a young person has been effectively parented by somebody who has no legal relationship to them. And for complex reasons, often relating to birth family drama, they don't choose to do any legal process while the person is a minor, but they can still have the satisfaction of having that legal kinship created with their parent after they're 18.
In my own family, I was able to be adopted by my stepmom who had been in my life since I was nine years old, but my dad died when I was in my early twenties. And my stepmom continued as an important parental figure to me, along with my bio mom who is still very much a parent.
But my stepmom and I had no legal relationship with each other. And this actually becomes an issue when you think about the end of life concerns and the right to visit somebody in a hospital, the right to be involved in their medical decision making, where having that legal parent-child relationship makes a world of difference.
So I was able to be adopted two summers ago along with my older sister, by Linda, my stepmom. So now I have two living parents again.
Katherine (20:08)
It's such a special story. Thank you for sharing it and something that I hadn't even considered, but I think that could be really important for the people that I work with. So if you have a person in your life who you would consider to be a parent figure, if they don't have a legal relationship to you, even if they don't have a legal relationship to you,
Even if you're okay with that, you've resolved it in your own mind. It may be something that you want to consider from an end-of-life planning perspective.
Tabitha (20:46)
That's right. And that's sort of from the perspective of as this elder person is aging, do they have those protections in place? Do they have a legal next of kin that's close to you? You don't want to be in a situation where hospital staff asks you to leave because you're not legal relation, legal kin, right?
Katherine (21:11)
Well, thank you for sharing that and congratulations on your second official mom.
Tabitha (21:14)
Thank you, yeah. Exactly, it was lovely.
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What do inheritors who were born into non-traditional families need to ask their parents about their estate plan?
Katherine (29:34.277)
So, Tabitha, my last question, and we've talked about this a little bit when we talked about adult adoption, but for any listeners who themselves are a result of non-traditional family building, you know, who are in maybe their 20s, 30s, and 40s, obviously this is all what you're saying is very established now.
But for some listeners, I imagine when their parents were having them making their own families, it wasn't so exactly clear what you needed to do from a legal perspective. And obviously, you know, for same sex couples, legally things looked very different. So if you yourself are the product of a non-traditional family building journey, what do you need to talk to your parents about as you are starting conversations with your family about their end of life and their estate planning?
What kind of questions do you need to be asking to make sure that nothing goes wrong? Like you said, is showing up at the hospital and being told that you have to leave because you're not a legal kin to your mom or your dad or whoever.
Tabitha (30:45.63)
Yeah, so I'm going to tackle this question in sort of two parts. The first is for those adult children of non-traditional family building, but also children, perhaps of traditional families who are having children in a non-traditional manner. So there are a lot of assumptions built into our estate planning laws and inheritance laws.
And one of those is that the child born to a marriage is the child of both parents, that the people who are adopted, children who are adopted are under state law, legally, fully the children of both of those parents, right? And not of their birth parent.
Tabitha (31:34.19)
But there is sometimes, as you say, some uncertainty around if those legal processes were completed properly. So if you have a situation where the dad that you always thought was your dad actually is not your biological dad, you would normally, and didn't adopt you, you would normally be able to discover that by looking at your birth certificate.
So that's something that sometimes kids aren't aware of, but most adults are aware of that because they're reading their birth certificate and they can see who's listed on there or not. And who's listed on the birth certificate is really good evidence of who is a legal parent. It's not conclusive. It doesn't establish legal parental rights, but it is what most of the world takes as sufficient evidence of who are your legal parents.
So double checking that if you believe there was an adoption, that it actually did occur. If there is some family lore around who was your biological parent or not, that you actually get that information and confirm that the people you think are your parents are your legal parents. Once you've done that, you're going to have the advantage of the benefits of the assumptions that are in place for children, for legal kin.
However, there are sometimes areas of the law where a descendant is defined in a specific way. So you might have parents that live in Florida, and I don't know Florida law, so it's a random example. And they have a trust that establishes that at their death, things are given to their grandchildren in equal shares. Their assets are distributed in equal shares to my grandchildren.
And there could be a provision that defines grandchildren as children who are born to a descendant of the grandparents. So usually the language would say born to or adopted by, and that's pretty good. But that could leave out children who are established by other provisions of state law to be the legal child or the legal descendant of that grandparent.
So if you have a parent-child relationship that has been established through a parentage judgment in a surrogacy, through a presumption of parentage in a same-sex relationship where you don't do an adoption, then you should really confirm that your parents' estate planning documents aren't inadvertently leaving out your child because you didn't establish it in one of the narrowly described methods, right?
So that's one.
The second part is that oftentimes people fall into an assumption that they have a parent-child relationship. This is something that I've seen happen in several cases with a stepparent who basically raised a child, identifies the child as theirs. The whole family has no sort of even really awareness of the fact that actually they don't have a legal relationship.
And if I'm sitting down with an estate planning client and he says, well, I have three kids, I want it to go equally. And then you dig down a little, it turns out that well, actually one of those kids is a stepdaughter, but he thinks of her as his child. That's great, but that might not be enough to provide that inherited security when we're using a general term. So the best thing that grandparents or parents can do is to identify by name the people who they consider to be their children and grandchildren.
And then there's no uncertainty as to whether a category that is narrowly described actually does include that emotional kinship.
Let’s take the next step together
Understanding everything inheritors need to know about taxes is not easy. Beneficiaries can encounter a wide variety of different situations requiring knowledge and finesse to manage. If you need more help, you can download The 20 Inheritance Terms you Need to Know, or reach out to Katherine Fox, CFP® and CAP®, a financial planner for inheritors to learn how Sunnybranch can help you build a plan to manage taxes during the estate settlement process.
