Accounting for Stepchildren and Adopted Children in An Estate Plan

Hook Law Center (formerly Oast & Hook)

Hook Law Center (formerly Oast & Hook)

Virginia Beach, VA (Law Firm Newswire) September 19, 2016 – In families with adopted children or stepchildren who have not been formally adopted, there can be some estate planning challenges.

More attention must be given to estate planning involving a family that consists of an unmarried couple in which one member has children, either biological or adopted, who are not also the children of the other member of the couple. In such a scenario, the couple should have a thorough understanding of their estate planning options.

In most cases, adopted children are treated in the same manner as biological children with respect to estate planning. Therefore, they are treated equally according to a state’s intestate succession laws, which have authority over who inherits property when there is no will. Additionally, adopted children are usually treated the same as biological children regarding wills or trusts that bequeath gifts or distributions to a class of individuals, including “children” even in cases where the child was adopted following the execution of the will or trust.

Andrew H. Hook, a prominent Virginia estate planning attorney with Hook Law Center with offices in Virginia Beach and northern Suffolk, states, “Individuals who have adopted children or stepchildren whom they have not legally adopted, should state their intent to bequeath property to them in their estate plan.”
Stepchildren usually do not have any inheritance rights regarding their parent’s new spouse unless the spouse adopts them legally. Thus, if a spouse has stepchildren, and wishes them to benefit from the estate, the spouse should initiate adoption proceedings or modify the estate plan to leave a bequest for them.

Prior to adopting stepchildren, both spouses should think about the possible impact on the capacity of the children to inherit from the relatives of their other biological parent. In the majority of states, after a stepparent adopts a child, the adoption decree causes a separation between the child and the family of his or her other biological parent. As a result, the child is unable to inherit by way of intestate succession from the family of that biological parent, and vice versa.

An increasing number of states currently allow second-parent adoptions, in which an unmarried individual adopts the biological or adopted children of a partner without ending the parental rights of the partner. But even in states that acknowledge second-parent adoption, intestate succession laws may not allow a child to inherit from the second parent.

Estate planning is particularly important for unmarried couples who cannot, or decide not to, secure a second-parent adoption if they wish the “non-parent” to gain custody of the child in the event the “parent” dies or loses capacity and if the non-parent wishes the child to benefit from the estate.

The “parent” is advised to consider the use of a power of attorney to grant authority to the “parent,” and to designate the “non-parent” as a guardian to make certain that the “non-parent” can make decisions on behalf of the child. A power of attorney is also needed to ensure that the “non-parent” has precedence over the blood relatives of the “parent” if the “parent” dies or loses capacity. In addition, it is recommended that both partners change their wills. The “parent’s” will should designate the partner as guardian for the child, and the “non-parent’s” will should stipulate any property to be left to the child.

Learn more at http://www.hooklawcenter.com/

Hook Law Center
295 Bendix Road, Suite 170
Virginia Beach, Virginia 23452-1294
Phone: 757-399-7506
Fax: 757-397-1267

SUFFOLK
5806 Harbour View Blvd.
Suite 203
Suffolk VA 23435
Phone: 757-399-7506
Fax: 757-397-1267
http://www.hooklawcenter.com/

  • New Changes Coming for Family-Owned Businesses
    The IRS has published proposed regulations concerning the valuation of family-owned businesses for estate and gift tax purposes that are potentially game changing. The sweep of these regulations is broad and encompasses both active family businesses and passive, investment-driven family enterprises that have primarily been created for wealth transfer planning purposes. Anyone with an interest […]
  • How to transfer property to a living trust
    A living trust is a legal entity that is used to hold title to your assets while you are alive. Upon your death, the assets are then transferred to the beneficiaries named in the trust. You can transfer such assets as bank accounts, stocks, bonds and certificates to the trust. You may also wish to […]
  • Protect Yourself from Identity Theft & Credit Card Fraud
    With identity theft and credit card fraud becoming a growing problem, there are things that each of us can do to minimize the risk. Shred sensitive documents: Regularly shred outdated bank statements, credit card applications, bills, tax returns, and anything with your personal information before tossing it into the trash or recycling. Join us at […]
  • Home Upgrades to Help Aging in Place
    Many individuals want to stay in their home through old age. Frequently, our clients are concerned that their home is a poor place to age in place because it is two-story, split-level, or simply old. Also, many are unwilling to move to a new home in order to accommodate decreased mobility due to their connection […]
  • Address these essential elements of retirement planning
    During your retirement years, you may expect to receive Social Security payments. A few people may also receive payments from public or private pension plans. However, it is best not to rely on such sources to provide a sufficient amount of income to ensure that you retire comfortably. Although you may receive income from both […]