3 ways in which Adoption impacts Estate Planning

adoption impacts estate planning

Every year, National Adoption Month is observed in November. For this year’s National Adoption Month, we discuss 3 ways in which Adoption Impacts Estate Planning. 

Before we jump to the topic under discussion, let us first learn what a ‘blended’ family means.

A Blended Family or a Step Family or a Complex Family is one where one or both parents have children from a previous relationship, but have now combined to form a new family.

Whether a family is blended or not can impact how families must structure their Estate Plans to achieve their goals.

An Adopted Child is treated identically to how biological children of the adopting parent are. However, there are some unique issues to consider while having an adopted child and planning for your Estate.

1. Establishing a Trust for your Adopted Child

A Trust is a powerful Estate Planning tool. Holding assets in a Trust for a child can make sure the child’s future is protected and the assets that are to be passed to the child will be used for the child’s benefit.

Holding assets in a trust can ensure they remain protected until the child is of age (18 or above) or mature enough to realize its importance and utilize it for their benefit.

If an adopted child has special needs, one can establish a Special Needs Trust. A Special Needs trust allows one to keep money aside for the child without jeopardizing the child’s right to receive government benefits.

2. Appoint a Guardian for your adopted child

If your adopted child is below eighteen, it is important to appoint a guardian who understands the family situation. This also means the guardian knows about the adoption and is willing to maintain the lifestyle that was created for the adopted child.

You should also make sure the guardian you appoint for your adopted child knows the terms of the adoption and understands the sensitivities in regards to the child’s family structure. Also, if the child’s biological parents are present, the guardian must be able to maintain a relationship with them if possible.

3. Recognize the difference between Foster Children and Adopted Children

Foster children are different from Adopted children. Foster Children are those who are not legally adopted and hence, do not have the right to share your Estate. Having said that, if you want to include your Foster children in your list of beneficiaries, you must state your intent to do so clearly in your Estate Planning document.


One important point to remember when it comes to including your adopted child in your Estate Planning: The inheritance laws vary from State to State so it is imperative that you understand which laws are applicable to your situation before proceeding.


Understanding the difference between guardianship and adoption

A guardianship merely establishes a legal relationship between a child and an adult who is not the child’s biological parent.  A Guardianship does not extinguish the birth parent’s right to child support, visitation, custody or right to inheritance. However, it allows the guardian to legally take care of the child’s welfare such as picking up the child after school and so on.

In the case of an adoption, the child’s biological parent’s rights and obligations are extinguished and replaced by that of an adopting parent. The adoptive parent is not just a guardian but an actual parent in the eyes of the law. This means not just full responsibility for the child’s welfare but also providing the child financial support and their right to inheritance.

You might also be interested in reading:

4 Important facts about Adoption and Estate Planning