November is National Adoption Month, a month in which we focus on adoption, adoption issues, and the children within the adoption system who need permanent, loving homes. Thousands of children are adopted each year, bringing joy and love to their new families. If you’re part of one of these families, now is a great time to update your estate plan to ensure that your new family member is protected and provided for.

All Children Are Usually Treated the Same

Generally, adoptive parents and grandparents treat both adopted and biological children the same way in estate planning documents.  If you do not have an estate plan in place, here are some factors to consider when a new child comes into your life. Even if you already have an estate plan, it is important to review it to ensure that your wishes for your new child are addressed and updated.

• Appoint a guardian. Most adoptions involve minor children. To ensure that your new child will be cared for if something happens to you, appoint a guardian, i.e., a caregiver, in your estate plan. Because this person will act as your child’s parent if you become disabled or die, it is important to choose someone who will love the child and will take care of them in a way that aligns with your wishes. It is also wise to name an alternative guardian in case the first person becomes unable to care for your child at some point. You’ll need to obtain consent for both roles. If you fail to designate a guardian, the care of your children will be left in the hands of an individual appointed by a court, and the person may not be someone you would have chosen. In addition to a permanent guardian, you may also want to name a temporary guardian, especially if you travel a lot. A temporary guardianship will allow the chosen individual to make decisions for your child on a short-term basis if you are not able to.

• Consider a trust. If you are adopting a minor child, you may not want your child to receive their entire inheritance at 18 years old, should you die before that point. By creating a trust, you can choose a trustee to watch over and use the inheritance for your child’s needs according to your stated wishes. If your adopted child has any special needs, a special needs trust can be established to provide funds for the child’s care without making the child ineligible for government benefits.

• Make sure they distribute the property and money as intended. If you are adopting as an older parent and you already have children, carefully consider what you would like each child to receive and make any necessary adjustments to your estate plan. For example, if you have established an irrevocable trust, your trust could be difficult or impossible to modify. If that trust names your older children as beneficiaries, you may want to make other arrangements to provide equivalent benefits for your adopted child. If your older children are already financially secure, but your new child will depend on you for many years and may need funds to pay for college, you can adjust your will or trust to provide for your younger child. Also, a grandchild who is adopted by a grandparent legally becomes the child of the grandparent, but the grandparent may want to continue to treat the child as a grandchild rather than a child for estate planning purposes.

Warning: If you do not include your adopted child in your will or trust—either by naming the child specifically or by making provisions using a class gift (e.g., by giving an equal share to “all my children”), state law will determine how much the child will inherit, which may not reflect your wishes.

Sometimes Additional Factors Need to Be Considered

Although an adopted child is typically treated the same as a biological child in an estate plan, under certain circumstances, you’ll want to keep these considerations in mind.

• Address your estate plan before the adoption is finalized. If your adoption is not yet final, but you love the child you intend to adopt and want to provide for him or her, you need to specifically name the child in your estate planning documents. If you do not, the child may not receive your assets if you pass away before the adoption is final.

• Think about the effects of a stepparent adoption on your planning. Stepparents who help raise a spouse’s child, but do not adopt the child, do not have legal ties to the child that entitle the child to inherit from them. If the stepparent’s will or trust merely provides that “all the children” will receive an equal share, the stepchild will not receive anything. However, if you adopt your stepchild, the law will treat the child the same as your biological children for inheritance purposes. The effects of a stepparent adoption on the stepchild’s right to inherit from the non-custodial birth parent vary by state. In most states, when a stepparent adopts a spouse’s child, the child’s legal ties to the non-custodial birth parent are cut, and the child will no longer be able to inherit from that birth parent unless the child is expressly included in his or her estate plan. In some states, however, adoption by a stepparent will not end the child’s legal right to inherit from the birth parent or birth relatives. Talk to an attorney and check the laws in your state.

• Second parent adoption. Stepparent adoption is available in all 50 states to married couples, and in states that recognize a civil union or registered domestic partners. In some states, individuals who are part of a couple but not in a legally recognized relationship such as a marriage or civil union, including those in same-sex relationships, can adopt a child who is the biological or adopted child of their partner without terminating the parental rights of the “first” parent by using a second parent adoption under that state’s law. As is the case with stepparent adoptions, a child adopted through a second-parent adoption will be treated the same as a biological child in your estate planning.

• Biological family. Members of the child’s biological family should understand the legal effects of the adoption so that they can make provisions for the child in their estate plan if they want the child to inherit from them.

• Make sure an international adoption is legally recognized. When you adopt a child from another country, ensure that the adoption is recognized not only by your state but by other states as well. Not all foreign adoptions are finalized in the child’s country of origin, so it is important to finalize those adoptions in the United States. Even if an adoption is finalized in another country, not all states recognize those adoptions. A readoption, which is a review of the international adoption by a state court, will ensure that the adoption is not vulnerable to a challenge in a U.S. court if you move to a state that does not recognize foreign adoptions. This step will also ensure your adopted child is legally entitled to inherit from you. Specifically include the child in your will or trust to ensure that the child receives the economic benefits and protections you desire, not just those specified by state law.

• Be aware of special rules for adult adoptions. Sometimes, people decide to adopt an adult to formalize a special relationship or to care for someone who is disabled. It can also be used to establish inheritance rights, for example, in a situation in which a childless person’s share of the property in a trust created by his or her parents will go to a sibling or the sibling’s children if that person passes away without a child. The childless person could adopt a close friend so that his or her portion of the trust property will go to the friend instead of following the default path set out in the trust. State law varies regarding adult adoptions: Some states only require the voluntary consent of the adult person who is being adopted, but others have more restrictive requirements.

Celebrate Your New Arrival by Planning for the Future

Sharing your life with a child is a wonderful thing! Whether you have just adopted a child or adopted years ago, ensure that your estate planning documents clarify the inheritance you would like your child to receive, when they should receive it, and who you want to act as a caregiver for your child if something should happen to you. Please contact us to set up an appointment so we can help you create an estate plan that addresses your growing family’s needs.

You can schedule a call with us or reach us directly at 855.528.9637 to learn more about how best to plan today to protect those most important to you.