Who Inherits Under Your Will And Trusts?

Simple Definition of Descendant

Here is a simple definition of “descendant” from a trust document: “References in this Trust Agreement to a person’s “children,” “grandchildren,” and other “descendants” shall refer respectively to that person’s children, grandchildren, and descendants, whenever born, as determined according to applicable governing law, except to the extent modified herein.” [Sample clause courtesy of Interactive Legal]. This clause and definition are pretty simple, and the reality is that many people don’t want to get into the nuances of what modern families might comprise, or how modern medical technology can affect who might (or might not be a descendant). So, many wills and trusts don’t get much deeper than the above definition (if that much). But as families and medicine continue to evolve the complications, and unfortunately, the litigation, the can ensue from determining who is a “descendant” under a particular will or trust, has grown.

Who is Your “Descendant”?

In the simplest of terms, a descendant is a person who is related to you and who lives after you, such as or child, grandchild, great-grandchild, etc.

Modern medicine has developed assisted reproductive technologies (“ART”), such as the utilization of in vitro fertilization technology, to help couples who cannot otherwise have children. But ART raises many issues as to how “descendant” should be defined. And that is only today’s technology. What will the future hold? What new issues will have to be addressed to define descendants as new technologies unfold?

Another factor that complicates the determination of who a descendant might be has been the evolution of the American family. The American family for a long period of time was typified by a male husband, a female wife, involved in the first and only marriage with children naturally born to the couple. But over time the composition of the family unit has evolved to the point that in today’s environment there is no dominant form of family unit. The proportion of blended families has grown significantly. Fewer couples are getting married. Estimates are that 40% of children are born to women outside of marriage, i.e., either single or cohabiting with an unmarried partner. Same-sex marriage has been legalized and has become more common. Each of these changes has had a profound impact on determining who are “children” and “descendants,” and how those terms may need to be defined so that your estate plan reflects your wishes.

So, the importance of defining “descendants” to many estate plans has grown more complex and important and will likely become even more complex and important in the future.

Why “Descendants” Are So Important to your Estate Plan

While it may be obvious why the determination of who is a descendant is so critical to your estate plan, it is important to address this fundamental point. Many wills and trusts, instead of designating a specific person to inherit, name instead a class of people such as your “children,” “issue,” or your “descendants.” So, how the term used is defined will determine who might inherit from your estate or a trust you create.

A typical clause for distribution of assets from a trust provides that distributions be made to your descendants, so who would qualify as a descendant is key. “The Grantor directs the Trustee to set aside and divide the Grantor’s Residuary Trust Fund into per stirpital shares for the Grantor’s descendants who survive the Grantor, each such share so set aside for a descendant to be distributed to the Trustee of a Descendant’s Separate Trust to be held as a separate trust...” [Sample clause courtesy of Interactive Legal].

Considerations of How “Descendant” is Defined

Who should be considered to be your child? It would seem agreeable that if you were the birth mother, your genetic child should be considered your child. But should it matter if your embryo was fertilized by donor sperm and then implanted? In that case would the baby be considered the child of your spouse if it were not his sperm that fertilized your embryo? What if you used a donor egg but your husband’s sperm? Is your carrying the embryo to term in the context of marriage even though you did not contribute genetic material to the baby sufficient?

If you donated sperm to fertilize an egg of a person to whom you were not married, is that baby your child? What if you donated sperm to fertilize an egg of a person to whom you were married but you divorced before the baby was born? What if you donated sperm and that sperm was frozen. Your widow, after you died, used that frozen sperm to fertilize her egg after your death? Is that baby your child? Might it matter how long after your death the fertilization occurred? Some trust documents or state law may provide that the baby may have to be in gestation on your death, others might provide a specified time period following your death during which the baby would be considered yours.

What if you donated the egg or sperm to a third party who used your genetic material, and either their genetic material or that of another donor, to have a baby? Is that your child?

Regardless of whether you contributed genetic material to the child, if you treated the child openly as your child, should that affect the legal status of that person as being your child? What if you provided the trustee of a trust you created with an affidavit stating that that person should be treated for all purposes as your child? Would that change the result? Wouldn’t that depend on what the legal document provides and what applicable state law says?

If you adopted a child prior to that child’s attaining age 18 would that person, then be treated as your child? That may depend on the terms of the trust or other governing legal document and applicable state law.

Read Related Also: 3 Ways Advisors Can Better Approach Client Estate Planning

What if a court terminates a person’s rights as the parent of a child? If that legal relationship parent/child legal relationship is terminated while the parent is alive, e.g., for child neglect, that child will not be treated as a child of that parent.

Given the myriad of complications and nuances of all of this, perhaps trusts and other legal documents might consider holding the fiduciary, e.g., a trustee, harmless for any good faith determination of who is, or is not, a descendant.

Example: Consider all of the above, for example, in the context of a simple and realistic example. Your grandfather created a trust that benefits you and your descendants. Whether or not that person is considered your child could have profound implications on their financial well-being especially if the trust involved were quite large. It also may be that depending on the facts involved, there might be steps you can take to support or even assure that the child involved is in fact to be treated as your child or descendant under that trust.

Detailed Definition of Descendant

Here is a more detailed definition of descendant from a trust document [courtesy of Interactive Legal] might read as that provided below. This definition is much more detailed than the simple definition that at the beginning of this article. The discussions above, and in particular the many questions raised, suggest that a more detailed definition might be useful. But those questions, and the many others that modern medicine and the evolving concept of what a “family” might be, are not all answered by even the expanded definition below. And as the family continues to evolve, and medical technology moves forward, questions and uncertainties will no doubt arise beyond those addressed in this longer definition. After presenting the definition, questions will be raised [in brackets and non-italicized text] to illustrate some of the limitations.

“References in this Trust Agreement to a person’s “children,” “grandchildren,” and other “descendants” shall refer respectively to that person’s children, grandchildren, and descendants, whenever born, as determined according to applicable governing law, except to the extent modified herein.

[Note that as with so many definitions in estate planning documents what local law provides will be critical. State laws differ on many points and those differences will continue as the many states’ courts grapple with new medical concepts and evolving social norms. Also, consider that it is not merely state statutes but court cases interpreting those statutes that will be relevant. That will make for a complex analysis in many cases].

A biological child shall not be treated as a child or descendant of any biological parent of the child or as a descendant of the ancestors of such biological parent if the child has been surrendered for adoption with the consent of such biological parent and the child’s adoptive parent substitutes for the consenting parent under applicable state law.

[If the biological parent gives the child up for adoption, that child will lose his or her rights as an heir under the biological parent’s will, but again note that state law will have an impact].

A biological child born out of wedlock shall not be treated as a child of his or her biological parent who is a descendant of the Grantor, or as a descendant of such parent’s ancestors unless and until the child’s biological parents marry one another before the child attains eighteen (18) years of age.

[Out of wedlock children is a common occurrence and one affecting by strong emotional feelings. This provision included in this sample form language may be the opposite of what you feel you would wish to have happened. This points out the important point that these types of provisions are vital to read in any document. You should never assume that a will or trust document provided to you by an attorney, or obtained online is “standard” or somehow automatically “correct.” That may be far from the case. Also, consider the statistics. According to one source 40% of births in the U.S. are to unmarried women. That is a tremendous percentage. This decision about how to treat a child out of wedlock is not an issue to be ignored. But the reality is that many people creating wills and trusts will be uncomfortable even considering this possibility for their family. Might the approach provided in this sample provision disinherit your daughter’s child because her boyfriend won’t marry her? Is that fair to the child who had no say in the matter? Regardless of “fairness” is that the result you would want?].

options and marriages that are recognized under this Trust Agreement shall not affect prior distributions or other interests that have previously vested in possession, but they shall enable a person to receive distributions from or remainder or other interests in a trust still in existence. The descendants of a person who is treated as a child or descendant under this Article shall also be treated as descendants of such person’s ancestors. The descendants of a person who is treated as not being a child or descendant under this Article shall also be treated as not being descendants of such person’s ancestors.

The term “child” or “descendant” (and any plural form thereof) in this Trust Agreement shall include any biological child or descendant of the Grantor (who has not been adopted by a person who is not a descendant of the Grantor unless the adoptive parent is married to a descendant of the Grantor or unless the adoptive parent was married to a descendant of the Grantor who died prior to the adoption) whose conception has resulted from the use of a frozen gamete of a deceased descendant of the Grantor and gamete of the Grantor’s deceased descendant’s surviving spouse and that posthumously conceived descendant has been born or is in utero by the time of the determination of the descendants who would take property outright or for whom it would be placed into separate trusts for descendants of the Grantor under this Trust Agreement; provided, however that proof that such posthumously conceived person is the biological child or descendant of the Grantor shall be established by DNA or equally reliable testing.”

[Again, adoption of a person who would otherwise be a “descendant” may cut off that person’s rights under your estate. So, if for example your daughter had a child that child would inherit. What if that child was born to your daughter out of wedlock? That child might not inherit unless your daughter and the biological father married before the child reached age 18. If your daughter were married but her husband was sterile and sperm from a donor was used, that child would inherit. But if the sperm donor/biological father of the child who is unmarried to your daughter adopted the child, that child would no longer inherit. The term “gametes” would mean ova or egg cells in the case of a female, and sperm in the case of a male. If a descendant of yours froze his or her sperm or eggs and a child was conceived using that genetic material and genetic material of their surviving spouse and the child was born before a determination was made as to who a descendant was under your will or trust, that child would inherit. But if, for example, your daughter’s egg was fertilized after her death by donor sperm, i.e., from someone not married to her, then the resulting child would not inherit].

Conclusion

As the above sample clause and comments illustrate, the interplay of modern medicine and determining who will be considered a descendant to inherit under your will or trusts is incredibly complex and there is a myriad of uncertainties. Further, those complexities and uncertainties will only grow as medical science advances. In how much detail will you be comfortable addressing these considerations? What might the forms a lawyer or online service you are using for your will or trusts provide? What costs will having these complex discussions with an attorney add to your estate plan? What might be done with existing trusts that have not addressed the circumstances that might arise?