Estate planning is challenging because planners are asked to anticipate issues that may or may not present themselves for decades to come. The “adult adoptee” issue is a perfect example of the type of low-probability scenario that can come back to bite a family if not appropriately anticipated.
The New York Times reported on a high profile trust case involving an adult adoptee in Partner Adopted by an Heiress Stakes Her Claim. The following are excerpts from the linked-to piece:
In 1991, Ms. Watson, then 43, adopted Ms. Spado, then 44, under a Maine law that allows one adult to adopt another. The reason, Ms. Spado has contended in court documents, was to allow Ms. Spado to qualify as an heir to Ms. Watson’s estate.
But less than a year after the adoption, Ms. Watson and Ms. Spado broke up. Then in 2004, Ms. Watson’s mother died, leaving multimillion-dollar trusts established by her husband to be divided among their 18 grandchildren.
Re-enter Ms. Spado with a claim: Because she was adopted by Olive F. Watson, she said, she is technically Thomas J. Watson Jr.’s 19th grandchild and is therefore eligible for a share of the trusts.
* * * * *
Many states allow adult adoption, but the laws were primarily intended for situations like a stepparent adopting a stepchild later in life, said D. Marianne Blair, an adoption expert at the University of Tulsa College of Law.
However, some same-sex couples began using the adoption process to establish financial security or inheritance for their partners, said Arthur S. Leonard, a professor at New York Law School.
“Before we had domestic partnership ordinances, before same-sex marriage or civil unions, back then there wasn’t much you could do,” Professor Leonard said.
In Florida, adults can be adopted, and for the purpose of intestate succession by or from an adopted person, the adopted person is considered a lineal descendant of the adopting parent and is one of the natural kindred of all members of the adopting parent’s family. 63.042, 732.108.
The adult-adoptee issue can be addressed with fairly simple boilerplate language inserted into the client’s will or trust. The following is an example:
Effect of Adoption. A legally adopted child (and any descendants of that child) will be regarded as a descendant of the adopting parent only if the petition for adoption was filed with the court before the child’s thirteenth birthday. If the legal relationship between a parent and child is terminated by a court while the parent is alive, that child and that child’s descendants will not be regarded as descendants of that parent. If a parent dies and the legal relationship with that deceased parent’s child had not been terminated before that parent’s death, the deceased parent’s child and that child’s descendants will continue to be regarded as descendants of the deceased parent even if the child is later adopted by another person.
Special thanks to Miami commercial litigator Javier A. Reyes of Boies, Chiller & Flexner LLP for bringing the New York Times article to my attention.