Defining “Children” For Estate Planning Purposes Is More Complicated Than You Might Think

By Jeffrey Levine, Director of Retirement Education
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“I leave the remainder of my assets to my children.”

Of all the provisions that may be found within your will or trust, this would seem to be one of the more straightforward of such items… right? Well, you might think so, but that’s not always the case.

Defining “children,” for instance, is not always as simple as it would appear at first glance.  When you say “my child,” many people will instinctually think of that as a biological child conceived with a person of the opposite sex. That, however, is far, from the only definition of child, especially in today’s society.

Some alternate definitions of “child” have longstanding acceptance in today’s society. Adopted children, for example, are treated equally with biological children in most jurisdictions. As such, saying “my children” in a will or trust would generally include both biological children as well as adopted children. Typically, this follows a parent’s intent, but there are some occasional unforeseen consequences. For example, prior to several landmark U.S. Supreme Court decisions that gave same-sex couples marriage equality under federal law, some same-sex couples opted for more creative planning techniques to try and secure benefits for one another. At times, these creative techniques included one partner adopting the other. Thus, a biological child of the adopting partner and the adopted partner would both be treated equally as “children” of the adopting partner.

That’s hardly the only problematic area when it comes to “children” though. With divorce and remarriage occurring more often than ever before, so-called blended families – think “The Brady Bunch” – have become increasingly popular. Thus, it’s now more common than ever for people to have step-children included in their planning. But what status do step-children have under the law? Well, while the exact status can vary from jurisdiction to jurisdiction – and can sometimes even be set by contract, such an IRA agreement – for the most part, step-children are not considered to be children under the law. Therefore, if there is a desire to treat such children equally in your estate plan, you must generally avoid using terms like “children,” which could unintentionally disinherit such persons.

Technology has also created some unique problems when it comes to defining children. Consider, for instance, a traditional couple that is considering having a second child. They already have one child together, conceived naturally, but perhaps with their already busy work-life balance, they just aren’t sure if a second child is in the mix. That said, they don’t want to rule it out either, but the wife’s proverbial biological clock is ticking. As such, concerned about increased risk of birth defects that can be associated with pregnancies at a later age, let’s imagine the couple decides to freeze the wife’s eggs. If five years later the couple decides to use the frozen eggs and has a child with the help of in vitro fertilization, it would seem pretty clear that such a child would be a “child” of the wife’s for estate planning purposes.

But suppose, however, that on the way home from the egg harvesting procedure, the wife is killed in a car accident. Her estate planning documents leave everything in trust for her husband, and then upon his death, the remainder to her children. If five years later, the husband decides to use the wife’s eggs to have a child with the help of a surrogate, should that child be considered a child of the wife and benefit equally under the trust after the husband’s passing? You could argue that it’s the wife’s biological child conceived with her husband, in which case your answer would likely be yes. However, on the other hand, you might look at the situation as more analogous to that of an egg donor, especially since the wife had no say in whether the child would be brought into this world, in which case you’d probably argue no. In truth, there is no good answer.

This is but a limited view at some of the complications that can arise in an estate plan merely by choosing to use the word “children.” If even this, seemingly innocuous term can create such complication, just think about what type of chaos can result with the rest of those complicated provisions in your documents if each and every word is not crafted with great precision. Needless to say, you need to be careful in your selection an estate planning professional.

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