Estate Planning for the Adoptive Family

Posted with Permission By Cheryl N. Smith, Esq
Cheryl N. Smith is an estate planning attorney at the law firm of Bass, Doherty and Finks, P.C. www.bassdoherty.com She is also mom to her beautiful daughter adopted at birth through domestic, open adoption. She can be reached via email at csmith@bassdoherty.com or via telephone at (617)787-8948.

My husband and I recently adopted a baby girl through domestic agency adoption. She is just the love of our lives and we have thoroughly enjoyed every minute of learning how to be her parents.

In addition to being a new adoptive mother, I am also an estate planning attorney, so after our daughter was born, I sat down to rewrite our Wills. I realized that the fact that we have an adopted child raised a whole host of questions which, even after nine years of practice, took on a whole new meaning to me. The more I thought about it, the more I realized that there are several issues and decisions that parents in adoptive families must be educated about that do not exist in families with only biological children.

Estate Planning in General

Every parent that has a minor child needs to have an estate plan in order to ensure that child is protected and cared for, both personally and financially. An estate plan typically consists of a set of documents that set forth your wishes with respect to your person (i.e., health care decisions), your estate (i.e., financial decisions) and your children (i.e., guardianship decisions).

The documents include a Will, a Trust, a Health Care Proxy, a Durable Power of Attorney, and a Parental Appointment of Guardian for Minors. While a good estate planning attorney can walk you through what each of these documents does, there are additional issues specific to adoption that an adoptive parent must consider when establishing an estate plan. Some of these issues are discussed below.

Choice of Guardian

Choosing a guardian to care for your children in the event you become incapacitated or die is never an easy decision for any parent. But when you are an adoptive parent, it is even more complicated. The person you select to fill this role must be sensitive to the unique circumstances of your family, and it may require some extra thought and direction on your part to make sure your wishes are carried out.

Things to consider include making sure your chosen guardian has all the facts about your child’s adoption so that as appropriate, they can share this information with your child. Also, if you are in an open adoption, will the person you chose as guardian follow through with helping to maintain that open relationship? In my own Will, I specifically state that if a nominated guardian is unwilling or unable to maintain a relationship with our daughter’s birth parents, that they respectfully decline to serve as guardian, in which case the nominated alternates will step in.

I often recommend that adoptive parents prepare a letter, to be kept with their estate planning documents, spelling out the circumstances surrounding their child’s adoption and giving directions regarding continued contact with the birth family and anything else they feel is important about their child’s adoption.

Inheritance Rights

Before your adoption is finalized, your child has no legal rights to your estate. Depending on from where your child is adopted and the type of adoption you have, it can take anywhere from 6 months to a matter of years to finalize an adoption.

As soon as your child is placed with you, assuming it is intended to be a permanent placement, you should consider signing new Wills to include that child. Your will can include language that treats a child placed for adoption the same as a biological child or a child whose adoption has been finalized.

Trusts

I always recommend that parents of young children leave their assets to a trust for the benefit of their child. It is never advisable to leave assets to a minor, first and foremost because legally they cannot take control of an inheritance, but also because leaving assets to a minor means continued court involvement and oversight until your child reaches the age of majority.

With adoption, and particularly open adoption, the need for a trust is magnified as there may be people other than your immediate family that have a direct interest in your child’s life and well being. Keeping assets held for your child in a Trust under the control of a Trustee that you have chosen (rather than being subject to judicial process) is the best way to protect your child’s interests and preserve your assets for their benefit.

Because a Trust is usually not a public document (as opposed to a Will which gets filed with the Probate Court), it also serves as a mechanism to privately set forth special financial considerations for your child, as further discussed below.

Special Financial Considerations

There may be costs associated with raising an adopted child that go beyond making sure they are clothed, sheltered, fed and educated. If your plan for your child includes annual visits with the birth family, or a trip to the country from where they were adopted, this is something you should spell out. If they were adopted internationally, and you want them to have exposure to the culture of their homeland, you should incorporate provisions in your Trust specifically directing your Trustee to pay for travel, cultural programs, or anything else that might be related.

Supplemental Needs Trusts

If your child has any disabilities or special needs, it will be even more important that you provide for him or her after you are gone. You should consider establishing a supplemental needs trust for your child to ensure that your child meet the financial eligibility rules for private or government assistance programs while preserving the assets you leave to him or her for needs not met by such programs.

Continued Planning

Finally, you should periodically review your estate plan with an experienced estate planning attorney. Changes in the law, your family structure or financial situation are all events that warrant a revisit of your plan as they can have a dramatic impact on your estate plan.

Copyright (c) 2009 Cheryl N. Smith

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